Sales at the hands of the brand name/trade mark holder would be treated as the first sale under KGST Act: SC [Read Judgment]

Ashok KM

24 Aug 2016 5:41 AM GMT

  • Sales at the hands of the brand name/trade mark holder would be treated as the first sale under KGST Act: SC [Read Judgment]

    The Supreme Court in ACC Ltd. vs. State of Kerala has reiterated that, sales at the hands of the brand name holder and trade mark holder would be treated as the first sale for assessing tax under Kerala General Sales Tax Act, 1963.Apex Bench comprising of Justices Dipak Misra and RF Nariman held that the law as stated in Cryptom Confectioneries Pvt. Ltd. vs. State of Kerala is a binding...

    The Supreme Court in ACC Ltd. vs. State of Kerala has reiterated that, sales at the hands of the brand name holder and trade mark holder would be treated as the first sale for assessing tax under Kerala General Sales Tax Act, 1963.

    Apex Bench comprising of Justices Dipak Misra and RF Nariman held that the law as stated in Cryptom Confectioneries Pvt. Ltd. vs. State of Kerala is a binding precedent and does not require reconsideration.

    In the instant case, ACC Ltd.had entered into an agreement with Cochin Cement Limited. On the basis of the finding that the Cochin Cement Limited had been manufacturing the cement and handing over the same to the ACC Ltd., the latter was held liable to pay tax. ACC Ltd. contended that the Cochin Cement Limited is the brand name holder and hence it is liable by virtue of Section 5(2) of the KGST Act.

    Rejecting these contentions, the Court held: “What is limpid is that Section 5(2) is an expression of the Legislative intention that the sales at the hands of the brand name holder and trade mark holder would be treated as the first sale. On a perusal of the agreement entered into between the parties, it is not remotely suggestive of the fact that Cochin Cement Limited is a brand name holder or trade mark holder. Hence, the ambitious submission of Mr. Ganesh has to melt as a glacier, and we say so. Ergo, the decision in Cryptom Confectioneries Pvt. Ltd. does not require reconsideration.”

    Read the Judgment here.

    Next Story