IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 21ST NOVEMBER 2008 / 30TH KARTHIKA 1930 WP(C).No. 25623 of 2005(A) -------------------------- PETITIONER(S): --------------- M/S. SUPER PACKAGING INDUSTRIES, RAVIPURAM, ERNAKULAM, REPRESENTED BY ITS MANAGING PARTNER, N.X. GEORGE. BY ADV. SRI.V.P.SUKUMAR SRI.JAIRAM.V.MENON RESPONDENT(S): --------------- 1. THE SALES TAX OFFICER, II CIRCLE, ERNAKULAM. 2. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT TAXES DEPARTMENT, SECRETARIATE,THIRUVANANTHAPURAM. BY G.P. SRI.TEKCHAND THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF THE NOTICE DT.10.2.2005 ISSUED TO PETITIOENR BY R1. P2: TRUE COPY OF REPLY DT.17.3.2005 FILED BY PETITIONER BEFORE R1. P3(a): TRUE COPY OF FORM H DECLARATION NO.03 L 080926 PRODUCED BY PETITIONER BEFORE R1. P3(b): .DO. NO.079334 .DO. P3(c): .DO. NO.L1 259971 .DO. P3(d): .DO. NO.03L 079436 .DO. P3(e): .DO. NO.03L 068762 .DO. P3(f): .DO. NO.L1 265802 .DO. P3(g): .DO. NO.03L 080886 .DO. P4: TRUE COPY OF ASSESSMENT ORDER DT.22.3.2005 PASSED BY R1 UNDER THE CST ACT. P5: TRUE COPY OF NOTIFICATION NO.SRO 958/02 ISSUED BY R2 U/S.8(5) OF THE CST ACT. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... W.P.(C) No.25623 of 2005 .................................................................... Dated this the 21st day of November, 2008. JUDGMENT The W.P. is filed challenging the demand of tax at the rate of 1% on sales turnover of packing material sold by the petitioner to exporters covered by valid Forms. The petitioner's case is that petitioner produced Form H obtained from exporters and based on the same petitioner is entitled to full exemption on sales turnover of packing materials. However, Government Pleader submitted that Form H covers only goods covered by export orders and not packing materials purchased by the exporter for packing of goods for export. He also brought to the notice of this court that concessional rate is granted for sale of packing materials to exporters under Notification No.958/2002 under which eligible benefit is granted to the petitioner for the turnover covered by such Forms. 2. The petitioner's claim for exemption based on Form H produced from exporters was rightly rejected because Section 5(3) provides for exemption of sale to exporters only for the purchase made by the exporter against advance exports orders for export of goods. The petitioner has no case that the goods purchased by the exporter from the petitioner were 2 goods which are exported as such. In other words, export orders produced by the petitioner from the buyers were for export of other goods by the exporter and the items sold by the petitioner was used for packing of such goods. Section 5(3) provides for exemption only on sale to exporter of goods which are exported by the exporter against prior orders for export. In other words, raw materials, packing materials etc. purchased by the exporter are not separately covered by Section 5(3) of the Act which provides for exemption only for the goods exported. In fact, it is only because of the non-availability of exemption for sale of packing material to exporters under Section 5(3) of the Act, the Government granted an incentive by way of reduction in rate of tax to suppliers of packing materials to exporters for packing goods for export. Since the Notification requires production of prescribed Forms for availing concessional rate, petitioner was rightly declined exemption of turnover not covered by such forms. The W.P. is therefore devoid of any merit and is dismissed. C.N.RAMACHANDRAN NAIR Judge pms