IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH WEDNESDAY, THE 25TH FEBRUARY 2009 / 6TH PHALGUNA 1930 WP(C).No. 1407 of 2008(P) ------------------------- PETITIONER(S): --------------- M/S.JAISHANKAR STEELS PVT. LTD. VAZHAKULAM,ALUVA, REPRESENTED BY ITS GENERAL MANAGER, SURENDRAN.K.V BY ADV. SRI.K.SRIKUMAR SRI.K.MANOJ CHANDRAN SRI.P.R.AJITHKUMAR RESPONDENT(S): --------------- 1. STATE LEVEL COMMITTEE, DEPARTMENT OF INDUSTRIES,THIRUVANANTHAPURAM REPRESENTED BY ITS DIRECTOR. 2. THE GENERAL MANAGER DISTRICT LEVEL COMMITTEE, DEPARTMENT OF INDUSTRIES,ERNAKULAM 3. THE ASSISTANT COMMISSIONER (ASSSMT)-11 DEPARTMENT OF COMMERCIAL TAXES, SPECIAL CIRCLE, MATTANCHERRY. 4. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, (APPEALS) ERNAKULAM, GOVERNMENT PLEADER MR.C.K.GOVINDAN FOR R1 TO 4 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25/02/2009, ALONG WITH WPC NO. 29404 OF 2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC.1407/08 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF CERTIFICATE OF REGISTRATION P2 COPY OF DUPLICATE CERTIFICATE. P3 COPY OF G.O. DATED 17.11.99. P4 COPY OF ORDER DT 24.11.03. P5 COPY OF APPEAL DT 9.12.03. P6 COPY OF ORDER DT 16.3.07. P7 COPY OF JUDGMENT DT 3.10.07. P8 COPY OF ORDER DT 12.11.07. P9 COPY OF ORDER DT 8.12.00. P10 COPY OF CERTIFICATE DT 1.3.06. // TRUE COPY // P.A. TO JUDGE K.M. JOSEPH, J. ```````````````````````````````````````````````````` W.P.(C) Nos. 1407 and 29404 OF 2008 ```````````````````````````````````````````````````` Dated this the 25th day of February, 2009 J U D G M E N T Petitioner is the same in both the writ petitions. In W.P.(C) No.1407/08, petitioner challenges Ext.P8. A declaration is sought that the petitioner is entitled to get tax exemption as per SRO No.1729/1993 as modified by SRO No.295/2000. Further declaration is sought that the petitioner's mill is a rolling mill which is not included in the negative list. A direction is sought not to proceed with the appeal filed by the petitioner against Ext.P6 assessment order for the year 2002-03. In W.P.(C) No.29404/08, the petitioner calls in question Ext.P7 which is an order of assessment for the year 2004-05. A direction is sought not to proceed with the appeal filed by the petitioner against Ext.P7. A declaration is also sought that the petitioner is entitled to get tax exemption as per SRO No.1729/1993 as modified by SRO No.295/2000. 2. Case of the petitioner in brief is as follows. Petitioner is a private limited company manufacturing Mild WPC.1407 & 29404/08 : 2 : Steel Rolled items. The petitioner applied for registration under the KGST Act and Ext.P1 is the application made by the petitioner. It is the case of the petitioner that there was a mistake in the application form and the petitioner applied for correction. Ext.P2 is the corrected duplicate copy. It is the further case that under SRO. No.1729/1993 as modified certain industries were exempted from payment of sales tax for 7 years from the date of starting of commercial production. Later, because of power shortage, certain power intensive industrial units based on electro chemical processors or units where total requirement exceeds 2500 KVA of contract load were put in the negative list. It is stated that vide Ext.P3, steel re-rolling mills and units manufacturing iron ingots were included in the negative list. Petitioner contends that it is neither power intensive nor a steel re-rolling mill nor a unit manufacturing iron ingots and it does not come under the negative list. Application of the petitioner for grant of exemption before the 2nd respondent was rejected by Ext.P4. In the meantime, there was certain developments resulting in the take over of the company by a new management. It is stated that the petitioner WPC.1407 & 29404/08 : 3 : preferred Ext.P5 appeal against Ext.P4. In the meantime, the petitioner came to be assessed tax for 2002-03 vide Ext.P6. Petitioner preferred an appeal before the 4th respondent. When the 3rd respondent started recovery proceedings, petitioner approached this court and Ext.P7 is the judgment passed. By Ext.P8, the 1st respondent rejected the appeal filed by the petitioner holding that the petitioner's industry is a re-rolling industry which is included in the negative list. In W.P.(C) No.29404/08, on the very same allegations, Ext.P7 assessment order is challenged. 3. I heard learned counsel for the petitioner Mr.K.Srikumar and learned Government Pleader. Learned counsel for the petitioner would contend that this is a case where the petitioner was actually running a steel rolling mill and it has only a contract demand of 500 KVA. He further contends that the Joint Director of Industries and Commerce conducted an inspection and in the inspection he has found favour with the petitioner's contention. There is also reference to the certificate of the Chartered Engineer to buttress his case that the petitioner is WPC.1407 & 29404/08 : 4 : running a rolling mill and not a re-rolling mill. No doubt, in Ext.P8, there is reference to the report of the Joint Director of Industries and Commerce and it is stated as follows. “Based on the above facts, I may report that M/s.Jaishankar Steels (Private) Ltd., Erumathala PO, Aluva, Ernakulam is engaged in rolling of different Iron & Steel Products from M.S.Ingots/Billets.” There are two findings in Ext.P8. In the first place, it is stated that in the application for registration the petitioner is shown as a steel re-rolling mill. Secondly, it is pointed out that with reference to the order dated 24.11.1998, steel re-rolling mills (all types), whether using MS scraps or MS billets or MS ingots, fall under the negative list. On this basis, claim for exemption is rejected. Learned counsel for the petitioner points out that order dated 24.11.1998 stands modified by Ext.P3 which was issued on 17.11.1999. Item 11 in the said list reads as follows. “ All types of Steel Re-rolling Mills, units manufacturing iron ingots.” Therefore, he contends that steel re-rolling mills alone are within the mischief of the negative list and not rolling mills. He WPC.1407 & 29404/08 : 5 : submits that actually even the order dated 24.11.1998 does not bear out the finding of the State Level Committee. 4. Counter affidavit is filed. Learned Government Pleader submits that the petitioner's unit is also under the mischief of the Government Order providing for a negative list. 5. In these writ petitions, I am concerned with the assessments for the years 2002-03 and 2004-05. Having perused Ext.P8 order, I would think that the matter has to be redone. There is no analysis of the effect of the report of the Joint Director. There is no reference to Ext.P3. There is no finding that steel rolling mill and steel re-rolling mill are one and the same. There is no finding that a steel rolling mill is liable to be included in the negative list. It is true that in the original certificate, it is shown as re-rolling mill. Ext.P9 certificate issued by the Deputy Chief Engineer would show that the product of the petitioner is to be included in the negative list. No doubt, learned counsel for the petitioner would point out that it is on the basis of the certificate issued in 2002. But, necessarily where the matter is redone, the question would have to be considered whether actually only steel WPC.1407 & 29404/08 : 6 : re-rolling mills are included in the negative list, whether the unit of the petitioner was a steel re-rolling mill or not. Therefore, I feel that Ext.P8 has to be quashed. Accordingly, I quash Ext.P8. The 1st respondent in W.P.(C) No.1407/2008 will consider the matter and take a decision in accordance with law within two months from the date of receipt of a copy of this judgment. It is submitted by the learned counsel for the petitioner that Ext.P7 order in W.P.(C) No.29404/08 has been carried in appeal. Recovery pursuant to the assessment orders for the years 2002-03 and 2004-05 will be kept in abeyance till a decision is taken as aforesaid. Writ petitions are disposed of as above. Sd/- (K.M.JOSEPH, JUDGE) aks