In Brief
KAIL Ltd., a subsidiary of Videocon International Ltd., sold home appliances under the brand name 'Sansui' in Kerala. The tax authorities treated KAIL as the brand name holder and levied tax under Section 5(2) of the Kerala General Sales Tax Act on the company's turnover, denying it second sale exemption. KAIL contended it was merely a second seller, as Videocon International held the brand. The Supreme Court held that when products are marketed under a brand name, the Assessing Authority may presume the marketer is the brand holder. Here, KAIL's unusually high resale margins and use of 'Sansui' letterheads showed the transaction was to reduce tax liability. The Court upheld the tax assessment under Section 5(2) and dismissed the appeal."
The lawyer headnote and full judgment text are available to registered users.