IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH MONDAY, THE 30TH JUNE 2008 / 9TH ASHADHA 1930 WP(C).No. 32062 of 2006(P) ----------------------------------------------- PETITIONER: ------------------ SREE CHAKRA INDUSTRIES, VALLIKUNNAM, KAYAMKULAM, REP. BY THE MANAGING PARTNER, K. SACHIDANANDA PRABHU. BY ADV. SRI.JOSE JOSEPH RESPONDENTS: ---------------------- 1. THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, ALAPPUZHA. 2. THE DISTRICT LEVEL COMMITTEE ON SALES TAX EXEMPTION, ALAPPUZHA, REP. BY THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, ALAPPUZHA. 3. THE STATE LEVEL COMMITTEE ON SALES TAX EXEMPTION, REP. BY THE MEMBER SECRETARY, THE DIRECTOR OF INDUSTRIES & COMMERCE, VIKAS BHAVAN, THIRUVANANTHAPURAM. 4. THE SALES TAX OFFIER, KAYAMKULAM. BY GOVERNMENT PLEADER SHRI C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K. M. JOSEPH, J. -------------------------------------- W.P.C. NO. 32062 OF 2006 -------------------------------------- Dated this the 30th June, 2008 JUDGMENT Petitioner challenges Exts.P3 and P8 and seeks a direction to respondents 1 & 2 to restore Ext.P1 exemption order and grant the additional exemption claimed as per application dated 04.08.1999 in the light of Ext.P7 order. Petitioner also seeks a direction to call for the records of Exts.P4, P5 & P6 assessment orders and quash the same and further direct the fourth respondent to re-do the assessments for the years 1998 - 1999, 1999 - 2000 & 2000 - 2001 after restoration of Ext.P1 order and issue of additional sales tax exemption certificate by respondents 1 & 2 in terms of Ext.P7 order and set off the sales tax due for these years against the eligible sales tax exemption available to the petitioner. A further direction is sought to the fourth respondent to refund the tax and interest forcibly recovered from the petitioner for the assessment years 1998 - 1999, 1999 - 2000 & 2000 - 2001. WPC. 32062/06 P 2 2. Briefly put, the case of the petitioner is as follows: Petitioner is a small scale industrial unit engaged in the manufacture of tamarind seed powder. It has been granted exemption from payment of sales tax under the KGST Act, 1963 in a sum of Rs.2,66,654/= on the sale of tamarind seed powder for the period from 30.07.1994 to 29.07.2001. Thereafter, the petitioner filed an application seeking additional exemption on the basis of additional investment in a sum of Rs.3,75,932/=. It is the case of the petitioner that no collection of tax was made in view of Ext.P1 exemption and the petitioner filed monthly returns and annual returns. While so, petitioner was issued with Ext.P2 notice for the assessment years 1998 - 1999 and 1999 - 2000 and calling upon the petitioner to pay tax, stating that no exemption existed as per the assessment records. Thereafter, Ext.P3 order was passed rejecting the application for additional exemption claimed on the basis of additional investment. Moreover, the exemption already granted under Ext.P1 came to be limited to the period from 30.07.1994 to 31.12.1996. WPC. 32062/06 P 3 Exts.P4 and P5 are the assessment orders for the years 1998 - 1999 and 1999 - 2000 by which tax came to be levied on the entire turnover returned and demanded balance tax and substantial amounts towards interest. Similarly, assessment was completed for the year 2000 - 2001 and Ext.P6 assessment order was issued for the said year. Thereafter, petitioner filed Appeal and after condoning the delay, Ext.P7 order was issued. By Ext.P7, the third respondent directed the second respondent to reconsider the claim of the petitioner and pass fresh orders. It is thereupon that Ext.P8 impugned order was passed. 3. I heard the learned counsel for the petitioner and also the learned Government Pleader. The case is taken up for final hearing by consent and the Government Pleader submits that no Counter Affidavit is necessary. 4. In Ext.P8, what is stated is that "the Judgment of the Honourable High Court is for M/s. Sreeramakrishna Feeds, Pathanamthitta and this unit is not a petitioner in the above case. Moreover, the unit is not working at present." WPC. 32062/06 P 4 5. It is pointed out by the counsel for petitioner that this is in the teeth of Ext.P7 order passed by the State Level Committee. The State Level Committee had categorically referred to the case of M/s. Sreeramakrishna Feeds and the Writ Appeal filed by it and found that on the basis of the Judgment in the Writ Appeal, as soon as the tamarind powder is produced from the seed, a new commodity known as separate and distinct commodity having its own use is formed. It is thereafter the Committee has held as follows: "The Committee after detailed discussion decided to condone the delay in filing the appeal and held that the unit is eligible to get STE for seven years from 30.7.94 to 29.7.01 in the light of the decision of the Hon'ble High Court of Kerala dated 6.8.04 in W.A. No.664/99 filed by M/s. Sree Ramakrishna Feeds deciding that conversion of Tamarind Seed Powder satisfied the definition of manufacture. The committee also resolved that the unit is eligible to get STE on the additional investment in Delivery Vehicle as per Rules. The SLC therefore authorized the DLC, Alappuzha to WPC. 32062/06 P 5 reconsider the claim of the unit and pass fresh orders. The appeal dated 17.9.04 filed by the unit is disposed of as above." 6. It is thereafter that Ext.P8 order has been passed. Both the grounds stated in Ext.P8 to reject the claim of the petitioner appear to be quite untenable. in fact, learned Government Pleader is unable to rebut the case of the petitioner that the grounds stated in Ext.P8 are unsustainable in which case, the matter requires to be reconsidered. Accordingly, on the reasoning that the reasons which have been stated in Ext.P8 for rejecting the claim are unsustainable, Ext.P8 order is quashed and there will be a direction to the second respondent to re-do the matter as directed in Ext.P7. Fresh orders in accordance with law shall be passed within a period of two months from the date of production of a copy of this Judgment. Upon the order being passed by the second respondent, the same will be produced before the fourth respondent who will take a decision on the same in the light of the order and in accordance with law. WPC. 32062/06 P 6 Exts.P4 to P6 will not stand in the way of appropriate orders being passed on the basis of the order as may be passed by the second respondent which will be produced by him before the fourth respondent. The Writ Petition is disposed of as above. Sd/= K. M. JOSEPH, JUDGE kbk. // True Copy// PS to Judge