State of Kerala vs Sivachandradasa

T.K. Kochu Thommen , J.—The State is the revision-petitioner. It challenges the order of the Tribunal confirming the order of the Appellate Assistant Commissioner whereby he reversed the order of the Sales Tax Officer. The Sales Tax Officer held that fuses sold by the assessee in his ammunition shop fell under entry 18 of the First Schedule to the Kerala General Sales Tax Act, 1963. The entry as it stood at the relevant time read :

Both the appellate authorities, disagreeing with the Sales Tax Officer, found that fuse could not be regarded as an arm or ammunition and relied on the principle stated by this Court in Sales Tax Officer v. P.K. Navi & O.S. Chandran [1981] 47 STC 194. This Court in that decision held that, although sulphur and saltpetre were, by a notification of the Central Government, included amongst the ingredients of ammunition, those articles were not understood in common parlanceas ammunition. Sulphur and saltpetre are chemicals generally used for the manufacture of medicine; fertiliser and the like, although they are also used in the manufacture of ammunition. These articles are generally available in medical or general shops. Going by their popular meaning, this Court held that entry 18 relating to arms and ammunitions had no application to sulphur and saltpetre.

In the present case, the assessee is a dealer in arms and ammunition. He is apparently a licensee under the Arms Act, 1959. That Act has defined "ammunition" to include "fuses". The article in question is the type of fuse which is admittedly used exclusively in connection with the manufacture or use of arms and ammunition. It is used as a detonator to initiate an explosion. It is not used in any other context or for any other purpose. It is totally unlike what is generally understood as fuse sold in electrical shops. The article in question is not allowed to be sold in any shop which is not licensed under the Arms Act. The question of law must therefore be considered in the light of these facts. Whether viewed in the technical sense, as defined under the Arms Act, or in the popular sense, as understood by those dealing in the goods, or according to the dictionary meaning and on the admitted facts, the "fuse" sold by the assessee is nothing short of a component in the manufacture or use of arms and ammunition. The decision of this Court in Sales Tax Officer v. P.K. Navi & O.S. Chandran [1981] 47 STC 194 has no application to the facts of this case.

In the circumstances, the Tribunal, in our view, misunderstood the scope and language of entry 18 as well as the nature of the article in question. Accordingly we set aside the orders of the appellate authorities and restore that of the assessing authority. The tax revision cases are allowed in the above terms. No costs.