IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN FRIDAY, THE 6TH MARCH 2009 / 15TH PHALGUNA 1930 ST.Rev..No. 218 of 2008() ------------------------- TA.34/2007 of S.T.A.TRIBUNAL,ADDL.BENCH,KZD. .................... REVISION PETITIONER/RESPONDENT ------------------------------ STATE OF KERALA, REP. BY JOINT COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM. BY SPL. G.P. SRI.VINOD CHANDRAN RESPONDENT(S): APPELLANT ------------------------ M/S. KANNUR SARVODAYA SANGH, THALASSERY. ADV. SRI.N.K.SANATH KUMAR THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 06/03/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. .................................................................... S.T. Rev. No.218 of 2008 .................................................................... Dated this the 6th day of March, 2009. ORDER Ramachandran Nair, J. Heard Special Government Pleader and counsel appearing for the respondent assessee. Even though three questions are raised in the revision filed by the State, there is only one issue to be decided by this court i.e. whether respondent is liable to pay tax under Section 5A on the timber purchased from unregistered dealers for use in the manufacture of furniture and other articles sold by them. Respondent being a Khadi unit was entitled to exemption on the sale of products manufactured by them. Later, the exemption was limited to 21 items covered by Notification issued with effect from 1.1.2000. The Tribunal held that respondent is entitled to exemption from payment of tax under Section 5A by virtue of Notification SRO 1090/99. However, on going through the relevant entry namely, Entry 12 of Schedule I of SRO 1090/99, we find that exemption is on purchase of goods which are taxable at the point of first purchase or last purchase in the State. 2 Timber is a commodity taxable at first sale point and therefore, exemption is not applicable. So much so, timber purchased by the respondent from unregistered dealers on which tax is not paid under Section 5(1) will attract tax under Section 5A, which is not covered by exemption under the above notification. We, therefore, allow the revision filed by the State and restore the assessment under Section 5A on the purchase turnover of timber. C.N.RAMACHANDRAN NAIR Judge K.SURENDRA MOHAN Judge pms