IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 3RD NOVEMBER 2009 / 12TH KARTHIKA 1931 ST.Rev..No. 297 of 2008() ------------------------- AGAINST THE ORDER DATED 09/08/2007 IN TA.378/2005 of COMMR.KERALA AGR.IT & STAT,TVM. .................... REVISION PETITIONER/APPELLANT/ASSESSEE ---------------------------------------------------------- M/S.KOSHY'S ELECTRONICS LIMITED, MANJADI, THIRUVALLA, REPRESENTED BY ITS DIRECTOR, REBECCA THOMAS. BY ADV. DR.K.B.MUHAMED KUTTY, SENIOR ADVOCATE SRI.SATHISH NINAN SRI.K.M.FIROZ RESPONDENT(S): RESPONDENT/REVENUE --------------------------------- THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. BY G.P. SRI. MOHAMMED RAFIQ THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 03/11/2009, ALONG WITH STRV 283 OF 2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- S. T. Rev. Nos. 297 & 283 OF 2008 -------------------------------------------- Dated this the 3rd day of November, 2009 JUDGMENT Ramachandran Nair, J. Heard senior counsel Dr. Mohamedkutty appearing for the petitioner, and Government Pleader appearing for the respondent. The Tax Revision Cases arise from the orders of the Tribunal disposing of KGST and CST appeals for 2000-01. The question raised in both the appeals is whether petitioner is liable to pay tax on works contract on the value of materials transferred in the course of executing the work or whether the work is only labour work on which petitioner is not liable to pay tax. 2. At our request during hearing the product samples are produced in Court which show that the item manufactured and sold by the petitioner is a sophisticated product made in factory by coating polyster and polypropylene film with aluminium or zinc metal extract to make it metalized film. We are told that the item is raw material for making capacitors in electronic industry. According to the petitioner, 2 besides manufacture and sale of the product petitioner is doing job work for customers who supply raw materials. However, department found that raw materials supplied are polyster and polypropylene film and the other materials are supplied by the petitioner. Further the finding is that the value addition of the product when compared with profit on manufacture and sale transaction is 142.2 per cent. In other words, compared to value of the raw materials supplied by customers, namely, polyster or polypropylene film, conversion cost, which includes the cost of metals used for giving the coating is almost double. In other words, what is done is manufacture and sale of a product in the factory which is tried to be converted into job work by customers supplying one of the items of raw material on which coating is done. All the three authorities found that the customers have not supplied entire materials and in the course of manufacture and supply of final product under job work petitioner has supplied raw material. In the absence of proper accounts, 30% is reduced towards labour charges and the balance is assessed as taxable turnover. In the two rounds of appeal the lower authorities confirmed the finding. We are of the view that 3 the findings are pure findings of fact and therefore no question of law arises from the order of the Tribunal. Consequently S.T. Revisions are dismissed. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk 4