IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 2ND JULY 2009 / 11TH ASHADHA 1931 WP(C).No. 36207 of 2007(I) ---------------------------------------- PETITIONER(S): ------------------------- K.P.M. AFSAL,PROPRIETOR, LEADER WOOD INDUSTRIES KUTTUR NORTH, MALAPPURAM DISTRICT. BY ADV. MR.K.T.SHYAMKUMAR MR.HARISH R. MENON RESPONDENT(S): ---------------------------- 1. STATE OF KERALA REPRESENTED BY ITS SECRETARY, INDUSTRIES DEPARTMENT GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM. 2. THE STATE LEVEL COMMITTEE FOR SALES TX EXEMPTION, REPRESENTED BY THE DIRECTOR OF INDUSTRIES AND COMMERCE, THIRUVANANTHAPURAM. 3. THE GENERAL MANAGER DISTRICT INDUSTRIES CENTRE, MALAPPURAM. 4. COMMERCIAL TAX OFFICER COMMERCIAL TAXES, TIRURANGADI, MALAPPURAM DISTRICT. GOVERNMENT PLEADER MR.K.P.PRADEEP FOR R1-4 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.36207/2007 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE EXEMPTION ORDER DT. 19.2.03 ISSUED BY THE 3RD RESPONDENT. P2:- COPY OF THE APPEAL IN FORM 7 FILED BY THE PETITIONER ON 17.3.03 BEFORE THE 2ND RESPONDENT. P3:- COPY OF THE ORDER DT. 20.12.06 ISSUED BY THE 2ND RESPONDENT. P4:- COPY OF THE G.O.(MS) NO.169/95. P5:- COPY OF THE NOTICE DT. 18.1.07 ISSUED BY THE 3RD RESPONDENT. P6:- COPY OF THE NOTICE DT. 23.6.07 ISSEUD BY THE 4TH RESPONDENT. P7:- COPY OF THE SRO 29/99 ISSUED BY THE GOVERNMENT. RESPONDENT'S EXHIBITS R3(a):- COPY OF THE SRO . R3(b):- COPY OF THE ORDER NO.SM/2089/06 DT. 25.4.07 OF 3RD RESPONDENT. TRUE COPY P.S. TO JUDGE TSS S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= W. P (C) No. 36207 of 2007 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 2nd July, 2009. J U D G M E N T The petitioner is a registered SSI unit, which started commercial production on 15-7-2001. Under S.R.O. No. 1092/1999 as amended by S.R.O. No. 295/2000, the petitioner was entitled to certain exemptions in the matter of payment of sales tax as a SSI unit. The petitioner applied for such exemption before the District level committee of the District Industries Centre and by Ext. P1 order, the General Manager of the District Industries Centre sanctioned an amount of Rs. 1,44,555/- towards sales tax exemption as against the claim of the petitioner for Rs. 2,79,341/-. The amount of Rs. 1,25,000/- claimed on the rented building was rejected as also exemption due for expenses of electrification for want of supporting details and against this denial of exemption of Rs. 1,25,000/-, the petitioner filed an appeal before the State level committee. The State level committee by Ext. P3 order, through the Director of Industries and Commerce, not only rejected the appeal but also decided to take steps to cancel the exemption of Rs. 1,44,555/- granted as per Ext. P1 order also. The petitioner is challenging Ext. P3 order seeking the following reliefs: “(i) Call for the records leading to the issuance of Ext. P5 order issued by the 2nd respondent and quash the same by issuing a writ of certiorari or any other appropriate writ, order or direction; (ii) declare that the State Level Committee for Sales Tax Exemption, the 2nd respondent herein has no authority to deny sales tax exemption already granted by the District Industries Centre to the petitioner in the absence of any appeal filed against the grant of such exemption as provided under the provisions of Ext. P4 Government Order; (iii) Issue a writ of certiorari or any other appropriate writ, order or direction quashing Ext. P5 and P6 orders issued by the 3rd and 4th respondents respectively; W.P.C. No. 36207/07. -: 2 :- (iv) Issue a writ of mandamus or any other appropriate writ, order or direction directing the 2nd respondent to grant sales tax exemption to the petitioner to the tune of Rs. 1,34,786/- being the cost of factory building and electrification charges as certified by the Chartered Accountant; (iv)(a) Declare that the amendment brought in by Ext. P7 order to SRO 1729/1993 is inconsistent with Ext. P4 Government Order to the extent it prescribes the power of the State Level Committee and quash Ext. P7 order to the said extent by issuing a writ of certiorari or any other appropriate writ, order or direction.” 2. Subsequent to Ext. P3, the General Manager initiated proceedings and by Exts.P.5 and P6, the petitioner was directed to refund the exemption of Rs,1,44,555/- availed by the petitioner. 3. The contention of the petitioner is that the procedure for grant of exemption is governed by G.O(MS) No. 169/95/ID dated 1-11- 1995, which is produced as Ext. P4. Although the same provides for an appeal against the orders of the District level committee, no suo motu powers are conferred on the State level committee to revise or cancel the orders of the District level committee. Therefore, according to the petitioner, Ext. P3 order is totally without jurisdiction. 4. The learned Government Pleader, with the support of the counter affidavit filed on behalf of respondents 2, 3 and 4, opposes the prayers of the petitioner. According to the learned Government Pleader, no prejudice is caused to the petitioner insofar as the State level committee had only remanded the matter to the District level committee with a direction to take appropriate proceedings for cancellation. According to the learned Government Pleader, it is after notice to the petitioner by the District level committee that all further orders have been passed in accordance with Ext. P3 order. He also submits that under clause 18 of Ext. P4, the State level committee can issue clarification wherever necessary regarding the scheme of the W.P.C. No. 36207/07. -: 3 :- tax exemption, which, according to the learned Government Pleader, includes the power to revise or cancel orders of the District level committee, for which no notice is prescribed. The learned Government Pleader also refers to Ext. R3(a) order, whereby SRO No. 1729/1993 has been amended, wherein the State level committee has been conferred with the power to revise the order of the District level committee. The learned Government Pleader would submit that SRO No. 1729/1993 is the parent notification for which SRO No. 1092/1999, relied upon by the petitioner for the exemption. 5. Even assuming that as contended by the learned Government Pleader the State level committee has powers to revise the orders of the District level committee, that also cannot be done without complying with the principles of natural justice. Here, against Ext. P1 order of the District level committee, the petitioner filed an appeal against that portion of the order, whereby only partial exemption was granted. In that appeal, the State level committee could not have passed Ext. P3 order without fist issuing a notice to the petitioner regarding the intention of the State level committee to revise the order of the District level committee and giving an opportunity of being heard to the petitioner on that question. The learned Government Pleader could not satisfy me that such a procedure complying with the principles of natural justice had been complied with by the State level committee before passing Ext. P3 order. If that be so, Ext. P3 order is clearly violative of the principles of natural justice. Accordingly, Ext. P3 order is quashed. Consequently, Exts.P.5 and P6 are also quashed. The learned Government Pleader prays for an opportunity to proceed afresh in accordance with law. For that, I must consider the question as to whether the State level committee has jurisdiction to do W.P.C. No. 36207/07. -: 4 :- so. In view of my above order, I am not inclined to consider that issue in this writ petition. Therefore, I do not express any opinion on the request made by the learned Government Pleader. That question is left open. The writ petition is allowed as above. Sd/- S. Siri Jagan, Judge. Tds/