IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 21ST JULY 2010 / 30TH ASHADHA 1932 OT.Rev.No. 27 of 2010() ----------------------- TA(VAT).260/2009 of KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM .................... REVISION PETITIONER/APPELLANT: --------------------------------------- M/S. AUGUSTINE TEXTILE COLOURS LTD., KANJIKODE, PALAKKAD, REP. BY ITS MANAGER(HR), MR.M.BALACHANDRAN. BY ADV. SRI.ANIL D. NAIR SMT.NIVEDITA A.KAMATH RESPONDENT/RESPONDENT ------------------------- STATE OF KERALA, REPRESENTED BY THE SECRETARY, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. BY G.P. SRI.MOHAMMED RAFIQ THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 21/07/2010, ALONG WITH OTRV NOS. 30, 31 & 33 OF 2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... O.T. Rev. Nos.27,30,31 & 33 of 2010 .................................................................... Dated this the 21st day of July, 2010. JUDGMENT Ramachandran Nair, J. Heard counsel appearing for the petitioner Sri.Anil D. Nair and Government Pleader Sri.Mohammed Rafiq appearing for the respondent. The question raised is whether the Tribunal was justified in declining deduction of cost of consumables in the turnover on works contract. Petitioner is engaged in job work of dyeing of yarn and fabric for various customers. Firewood is a major consumable used in the dyeing work. Since suppliers were not registered dealers, the petitioner remitted tax under Section 6(2) of the KVAT Act on the purchase turnover of firewood. The case of the petitioner is that purchase turnover of firewood under Section 6(2) being the value of consumable is liable to be deducted from the turnover on works contract. Even though we agree in principle the legal position canvassed by the petitioner, what is seen is that the entire works contract turnover is exempt from tax by virtue of Government Orders, No.MS.24/04/TD O.T.Rev. 27/2010 & conn. 2 dated 20.3.2004 and G.O.MS.127/07/TD dated 1.10.2007. The petitioner is also seen granted exemption on the entire turnover. When the whole turnover on works contract is exempt from tax, there is no scope for deduction of turnover on consumables because such deduction is applicable only in the computation of taxable turnover on works contract which in this case is not there by virtue of exemption on entire turnover. Therefore, while admitting the claim for deduction in principle as tenable, we dismiss the revision cases as the petitioner cannot have a grievance when full works contract turnover is granted exemption under the Government Notifications referred above. The tax paid under Section 6(2) on purchase turnover on firewood being a separate levy on which there is no contest, will stand sustained. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms