State
of Kerala Vs. M/S. Vattukalam Chemicals Industries [2001] Insc 410 (23 August 2001)
S.P.
Bharucha, Y.K. Sabharwal & Ashok Bhan Bharucha, J.
WITH (C.A.
No.5665/1998 & C.A. No.5676/1998)
Civil
Appeal Nos. 5418-5420 of 1997 We are called upon to interpret a notification
(499/90) issued under the provisions of the Kerala General Sales Tax Act, 1963.
The relevant portion thereof reads thus :
.. the
Government of Kerala having considered it necessary in the public interest so
to do hereby make an exemption in respect of the tax payable under the said Act
by new industrial units under the Small Scale Industries and by such of the
existing industrial units which effect diversification, expansion, modernisation
on the turnover of sale of goods manufactured and sold by such units and on the
turnover of goods taxable at the point of last purchase in the State and used
by such units in the manufacture of goods intended for sale within the State or
interstate .
The Kerala
Sales Tax Appellate Tribunal opined that the notification contemplates
exemption only on the turnover of goods taxable at the point of last purchase
in the State and used by such units in the manufacture of goods within the
State. It is an undisputed fact that the copper scrap is not goods taxable at
the point of last purchase in the State. .. What has been given exemption in
SRO 499/9 is the turnover of goods taxable at the point of last purchase in the
State. The goods taxable at the point of last purchase are specifically
enumerated in the last schedule of the Kerala General Sales Tax Act, such as
Pepper, Dry Ginger, Arecanut, Rubber, etc. The turnover under Section 5A is not
mentioned in this notification. It is a well settled law that the primary
object of a Sales Tax statute is to fetch the tax and giving exemption is only
a concession of the Government, and so, the exemption notification has to be
strictly interpreted.
The
High Court of Kerala, in the judgment and order under appeal, has taken no
notice of the words of the notification that make it applicable to the turnover
of goods taxable at the point of last purchase in the State.
The
respondent-assessee purchased copper scrap for use in the manufacture of copper
sulphate. It is an admitted position that copper scrap is not taxable at the point
of last purchase in the State. On the plain words of the notification, the
exemption given thereby is, therefore, not available to copper scrap and,
therefore, to the particular copper scrap purchased by the assessee.
The
argument of learned counsel for the assessee is that the assessee had purchased
the particular copper scrap from unregistered dealers so that, insofar as the
particular copper scrap was concerned, it became taxable at the point of last
purchase in the State and, therefore, the particular copper scrap was entitled
to the exemption given by the notification. The argument is misplaced. The
notification applies to goods of the description that are taxable at the point
of last purchase in the State under the Act. The particular copper scrap is not
goods of a description which are taxable under the Act at the point of last
purchase in the State. The particular copper scrap is, therefore, not entitled
to the benefit of the exemption under the notification. The question is not
whether the particular copper scrap which the respondent purchased became, by
reason of circumstances, taxable at the point of last purchase in the State but
whether copper scrap as a description of goods is taxable under the Act at the
point of last purchase in the State. Since it is not, the benefit of the
notification does not extend to the particular copper scrap purchased by the
respondent.
Learned
counsel for the assessee sought to rely upon the objects of the notification in
aid of the interpretation that he sought to place upon it. The language of the
notification being crystal clear, no external aid to its construction is
required.
The
appeals are allowed. The judgment and order under appeal is set aside. The
order of the Tribunal is restored. The respondent-assessee shall pay to the
appellant the costs of the appeals.
C.A.
No. 5665 of 1998 & C.A. No. 5676 of 1998 The orders of the High Court of Kerala
that are impugned in these appeals follow the judgment and order of that High
Court in the case of Vattukalam Chemical Industries, which judgment and order
we have just set aside. Accordingly, these appeals are allowed and the orders
under challenge are set aside.
..J.
(S.P. Bharucha)
..J.
(Y.K. Sabharwal)
..J.
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