Deepa Panels Vs.
State of Kerala
O R D E R
appellant herein is an assessee manufacturing chemically treated rubber wood
products. The assessee filed its annual returns claiming exemption from payment
of purchase tax. In that context, the issue that arose for consideration is whether
the assessee is entitled for exemption from payment of purchase tax.
contention of the appellant was that the appellant is eligible for exemption
from payment of tax in respect of purchase of rubberwood from unregistered dealers.
For the assessment year 1998-99, 1996-97, the assessing authority completed the
assessments and granted exemption even from payment of purchase tax. However, after
the aforesaid assessment orders were passed, action was taken for re- opening
of the assessment for the aforesaid assessment years in question and a notice to
that effect was issued to the assessee who in receipt of the aforesaid notice filed
its reply contending, interalia, that in view of the exemption certificate granted
by the General Manager, District Industries Centre, the assessee is entitled for
exemption from payment of purchase tax. The assessing authority considered the
records including the objections taken by the assessee and thereafter it held and
passed an order of assessment that the assessee is not entitled from exemption of
levy of purchase tax under Section 5A of the Karnataka General Sales Tax Act
[for short "KGST Act"].
by the orders of the assessment passed for the assessment year 2001-2002 and orders
of re-assessment passed by the assessing authority for the assessment years 1998-99
and 1996-97, the assessee filed appeals before the Kerala Sales Tax Appellate
Tribunal, Addl. Bench, Palakkad. The Tribunal by its orders dated 10.08.2004 and
06.08.2007 rejected the appeals filed by the appellant against the order of
re-assessment for the years 1996-97 and 1998-99 and also the order of
assessment for the year 2001-2002.
by the aforesaid orders passed by the Tribunal, revision petition was filed
before the Kerala High Court which was registered as Sales Tax Revision No. 6 of
2008. The High Court, after hearing the counsel appearing for the parties held that
the article manufactured by the assessee is not covered by the Notification SRO
No. 1729 of 1993 and, therefore, the issue that arises for consideration according
to the High Court was covered by the decision of this Court in the case of State
of Kerala Vs. Vattukalam Chemicals Industries 2001(6) SCC 764. In that view of
the matter, it was held that the assessee was not entitled for exemption from payment
of purchase tax. The High Court further held that the assessee at best could be
entitled for exemption only on the goods manufactured and sold and no exemption
could be granted from payment of purchase tax. The aforesaid findings which are
recorded by the High Court are under challenge in these appeals in which we
have heard learned counsel appearing for the parties.
considered the submission of the learned counsel appearing for the parties and also
the decisions referred to, we are of the view that the facts of the case in
hand are similar to the one which was decided by this Court in the case of State
of Kerala Vs. Vattukalam Chemicals Industries (supra). Learned counsel appearing
for the appellant, however, relied upon two decisions of this Court being
Pondicherry State Cooperative Consumer Federation Ltd. Vs. Union of Pondicherry
2008(1) SCC 206 and Vadilal Chemicals Ltd. Vs. State of A.P. and others 2005(6)
considered the ratio laid down by the aforesaid decisions in the light of the
Notifications relevant for the purpose of deciding this case and referred to by
the learned counsel appearing for the parties, we are of the opinion that the
two decisions which are relied upon by the learned counsel appearing for the appellant
are distinguishable on facts. In the aforesaid two decisions relied upon, the exemption
certificates which were issued by the District Industries Department consisting
of experts on the subject were sought to be interpreted by the assessing
authority and thereby arriving at the conclusion for denial of the benefit of
exemption to the assessee therein.
Court also noted that there is a turn around by the State by taking two contradictory
stands at two different points of time, which according to this Court, should
not have been done, and in that view of the matter, the aforesaid two decisions
were rendered. In our considered opinion, the ratio of the aforesaid two decisions
are distinguishable on facts but so far as the decision of this Court in Vattukalam
Chemicals Industries(supra) is concerned, the facts are almost similar. In that
Judgment, this Court has clearly held that the assessee therein is not entitled
for exemption from payment of purchase tax as the article manufactured is not included
in the Notification, namely, SRO No. 499/1990. Learned counsel appearing for
the appellant, however, sought to submit that SRO No. 499/1990 which was
considered in the aforesaid case i.e. Vattukalam Chemicals Industries case(supra)was
superseded by a subsequent Notification SRO No. 1729 of 1993.
have perused and considered the said Notification very carefully but in the said
Notification also, we find that no exemption was granted to the article manufactured
by the appellant as well. The ratio of the decision in the case of Vattukalam Chemicals
Industries (supra) was laid down in the context of the Notification SRO No. 499/1990.
There is no change in the ground situation in the subsequent Notification also
and, therefore, we see no reason as to why the ratio of the decision in
Vattukalam Chemicals Industries (supra) would not be applicable to the facts and
circumstances of the present case.
are also of the opinion that the assessee could be said to be entitled for
exemption only on goods manufactured and sold but it cannot claim any exemption
from payment of purchase tax.
held thus, we find no merit in these appeals which are accordingly dismissed.
(DR. MUKUNDAKAM SHARMA)
(ANIL R. DAVE)