IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN THURSDAY, THE 2ND APRIL 2009 / 12TH CHAITHRA 1931 ST.Rev..No. 342 of 2007() ------------------------- TA.244/2005 of S.T.A.TRIBUNAL,ADDL.BENCH,PALAKKAD .................... REVISION PETITIONER: APPELLANT/REVENUE: -------------------------------------- STATE OF KERALA BY G.P. SRI. V.K. SHAMSUDEEN RESPONDENT(S): RESPONDENT/ASSESSEE: ----------------------------------- K.G.MOHANAN, M/S.PERFECT SMITHY INDUSTRIES, ALATHUR, ANANDAPURAM, ALATHUR, NELLAI (VIA), THRISSUR DISTRICT. BY ADV. DR. MOHAMMED KUTTY, SENIOR COUNSEL THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 02/04/2009, ALONG WITH STRV 343/07 & 1/2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & K. SURENDRA MOHAN, JJ. -------------------------------------------- S.T. Rev. No.342 & 343 OF 2007 & S.T. Rev. No. 1 OF 2008 -------------------------------------------- Dated this the 2nd day of April, 2009 JUDGMENT Ramachandran Nair,J. The question raised in the connected Revision Cases filed by the State is whether the Tribunal was justified in holding that single wheeled trolley which the respondent calls a "wheel barrow" is entitled to exemption as an agricultural implement under notification SRO 1727 of 1993 modified by SRO 1094/99. We have heard Government Pleader appearing for the petitioner and senior counsel Dr. Mohammed Kutty appearing for the respondent. 2. Government derives authority to grant exemption on agricultural implements specifically under Entry 4(ii) of the First Schedule to the KGST Act, 1973 which covers only agricultural implements. Under the above two notifications Government has notified 40 items for exemption one of which is "manure pan". The question to be considered is whether single wheeled trolley 2 manufactured and sold by the respondent is "manure pan". Government Pleader contended that the trolley manufactured and sold by the respondent, by no stretch of imagination, can be called "manure pan". On the other hand, senior counsel appearing for the respondent referred to even newspaper publications inviting tenders by Krishi Bhavan and contended that trolley manufactured and sold by the respondent under the name "wheel barrow" is used in farms for carrying and distribution of manure and for transport of crop. The photographs of the product produced in court establish beyond doubt that the item is a trolley with handles on either side and has an inflated wheel in the front and two legs behind. It is an item made fully of iron and steel and can carry quite sizable quantity of materials. Even if it is fit for use in the farm it is mostly seen used at construction sites for movement of materials. Of course it could be used for agricultural purposes by farmers who have road facility in their Farm or whose farm is level-land. We are of the view that the item is fit for use for various purposes and it can be used for agricultural purposes in farms also. However this does not entitle the item for exemption because only notified agricultural implements are entitled to exemption under 3 Entry 4(ii) of First Schedule to the Act. "Pan" is nothing but a vessel which may be made of metal, earthenware, plastic or any other material which is generally broad and shallow used for domestic purposes. "Manure Pan" mentioned in the notification therefore can be only a pan used to administer manure to plants. We are of the view that single wheeled trolley which is used for carrying sizable quantity of material is not intended as a "manure pan" by the Government while issuing the notification. The value of wheel barrow manufactured and sold by the respondent ranges from Rs. 1750 to Rs. 1850 during the relevant years, whereas the value of the items enumerated in the list of 40 items notified by the Government does exceed Rs. 100 or Rs. 150/-. A high value product of this type fit for various purposes is not intended to be covered by notification. Therefore we are of the view that the Tribunal clearly went wrong in holding that single wheeled trolley manufactured and sold by the respondent and styled as wheel barrow is an agricultural implement covered by the notification. We therefore reverse the orders of the Tribunal and that of the first appellate authority and restore the assessments. Senior counsel appearing for the respondent expressed financial 4 problems that the unit is going to face on account of this judgment. He has also referred to the clarification issued by the Commissioner which is only in 2004 clarifying that the item does not qualify for exemption. There is a bona fide dispute about exemption is clear from the favourable orders of the appellate authorities at two levels. We feel, it is a fit case for exonerating the respondent from interest burden. We therefore waive complete interest payable by the respondent under Section 23(3) or 23(3A) read with Section 23 (3B) but on condition that respondent will clear the arrears of tax within a period of three months from now. Tax Revisions are allowed as above. (C.N.RAMACHANDRAN NAIR) Judge. (K. SURENDRA MOHAN) Judge. kk 5