IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 6TH NOVEMBER 2009 / 15TH KARTHIKA 1931 ST.Rev..No. 97 of 2009() ------------------------ TA.117/2008 of STAT ADDL.BENCH, KOTTAYAM .................... REVISION PETITIONER/RESPONDENT ----------------------------------------------------- STATE OF KERALA, REPRESENTED BY JOINT COMMISSIONER (LAW) COMMERCIAL TAXES, ERNAKULAM. BY GOVERNMENT PLEADER SRI VINOD CHANDRAN. RESPONDENT(S): APPELLANT ------------------------ M/S. COMFOAMS LIMITED, KOTTAYAM. BY ADV. M/S..HARISANKAR V. MENON & SMT.MEERA V.MENON THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 06/11/2009, ALONG WITH STRV NO. 142 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N. RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. ---------------------------------------- STRV. No.97 & 142 OF 2009 ---------------------------------------- Dated, the 6th November, 2009 JUDGMENT Ramachandran Nair, J. Heard the Special Government Pleader appearing for the petitioner and counsel for the respondent. 2. The question is whether the Tribunal was justified in granting exemption in respect of production of centrifugal latex from field latex to the respondent/assessee during 2004-2005. Exemption was claimed based on certificate of exemption issued by the State Level Committee in appeal filed against the decision of the District Level Committee declining exemption. Special Government Pleader pointed out that exemption claimed by the respondent is on the basis that conversion of centrifugal latex from field rubber latex is a manufacturing activity leading to production of an article or thing. Under First Schedule to the KGST Act, STRV Nos.97 & 142/09 -:2:- both centrifugal latex and rubber latex are taxable at the point of last purchase in the State. Even though centrifuging was treated as manufacture, notification SRO 1729/93 was later amended by Act 38/98 expressly declaring that conversion of rubber latex to centrifugal latex is not a manufacturing process and the item produced is not a manufactured product for granting exemption under notification 1729/98. However, in spite of express bar against granting exemption, State Level Committee consisting of Director of Industries and Commissioner of Commercial Taxes etc, allowed the claim, that too, by reversing order of the District Level Committee which declined the benefit. What is evident is the indifferent manner in which the appellate authority behaved in this case. The more surprising aspect is that exemption is granted in violation of the notification by overruling the finding of the original authority, i.e., District Level Committee. We therefore feel that the Tribunal rightly held that since the certificate is not STRV Nos.97 & 142/09 -:3:- recalled, the assessee is entitled to claim exemption. We therefore uphold the order of the Tribunal and dismiss the Revision. It is for the State to consider action against the State Level Cmmittee for the loss caused to it. C.N.RAMACHANDRAN NAIR JUDGE V.K.MOHANAN, JUDGE kvm/- STRV Nos.97 & 142/09 -:4:- V.K.MOHANAN, J. O.P.No. JUDGMENT Dated:..