IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER FRIDAY, THE 29TH AUGUST 2008 / 7TH BHADRA 1930 S.T.Rev.No.39 of 2004 ------------ ------------------------ ORDER DATED 7.6.2001, IN T.A.NO.161/2000 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOZHIKODE. (ASSESSMENT YEAR 1991-1992) REVISION PETITIONER/APPELLANT/REVENUE:- ------------------------------------------------------------------- DEPUTY COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ RESPONDENT/RESPONDENT/ASSESSEE:- ------------------------------------------------------------- M/S. FLORAL AROMATICS, SILK STREET, CALICUT. THIS SALES TAX REVISION HAVING COME UP FOR ORDERS ON 29/08/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.Dattu,C.J. & A.K.Basheer,J. --------------------------------------------------------------------- S.T.Rev.No.39 of 2004 & C.M.Appln.No.55 of 2004 --------------------------------------------------------------------- Dated, this the 29th day of August, 2008 ORDER H.L.Dattu,C.J. We are satisfied with the explanation offered by the petitioner for filing the revision petition belatedly. Therefore, the delay in filing the revision petition is condoned. (2) The correctness or otherwise of the orders passed by the Sales Tax Appellate Tribunal, Additional Bench, Kozhikode in T.A.No.161 of 2000 dated 7th June, 2001 is called in question by the Revenue in this revision petition. (3) The relevant assessment year is 1991-1992. (4) The Revenue has framed the following questions of law for our consideration and decision. They are as under: “(a) Is not the Tribunal in error in holding that the assessee is not liable to pay the purchase tax under section 5A of the KGST Act taking view that the red oil and the sandal wood oil are one and the same commodity? (b) Is not the Tribunal fail to apprehend the correct aspect of manufacture with reference to the factual situation in the case?” (5) In our view, the questions of law raised by the Revenue before us are no more res integra, in view of the dicta laid down by the Apex Court in the case of Punjab Aromatics v. State of Kerala [2008 (2) KLT 673 (SC)]. In the said decision, the apex Court has stated as under: “Assessee purchases 'red oil' and converts such red oil into 'sandalwood oil' by removing water content and other impurities. According to the Department, the commodity purchased (red oil) has undergone manufacture when it is heated and same is filtered by S.T.Rev.No.39 of 2004 - 2 - which impurities are removed and hence conversion of red oil into sandalwood oil attracts levy under S.5A. Reversing the decision of the Kerala High Court reported in 2007 (3) KLT SN 3 (C.No.2), Supreme Court held that the 'test of irreversibility' is an important criterion to ascertain as to when a given process amounts to manufacture and that sandalwood oil (final product) can be brought back to original state namely red oil by adding impurities and therefore process is reversible. Hence red oil is not consumed/used in the manufacture of sandalwood oil and hence S.5A(1)(a) or (b) has no application”. (6) In view of the law declared by the Apex Court, in our opinion, the questions of law framed by the Revenue requires to be answered against the Revenue and in favour of the assessee. (7) Accordingly, the revision petition is rejected. The questions of law raised by the Revenue are answered against the Revenue and in favour of the assessee. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer Judge vku/dk