IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER THURSDAY, THE 25TH SEPTEMBER 2008 / 3RD ASWINA 1930 S.T.Rev..No.347 of 2006 ----------------------------------------- ORDER DATED 30.9.2002 IN T.A.NO.209 OF 1997 & ORDER DATED 22.11.2005 IN R.P.NO.9 OF 2003 IN T.A.NO.209 OF1997 OF THE KERALA SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOZHIKODE. --------- PETITIONER/REVIEW PETITIONER/APPELLANT IN T.A/ASSESSEE:- ------------------------------------------------------------------------------------------------- JACOB JOHN, S/O. E.J.JOHN, AGED 53 YEARS, C.C. ENTERPRISES, MANIAN ROAD, MAVICHERRY, PAYYANNUR, KANNUR. BY ADV. SRI.M.V.AMARESAN RESPONDENTS/RESPONDENT IN REVIEW/RESPONDENT IN T.A./REVENUE:- ---------------------------------------------------------------------------------------------------------------- 1. SALES TAX OFFICER, TALIPARAMBA, KANNUR. 2. SECRETARY TO GOVERNMENT, DEPARTMENT OF TAXES, TRIVANDRUM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 25/09/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.Dattu,C.J. & A.K.Basheer,J. -------------------------------------------- S.T.Rev.No.347 of 2006 ------------------------------------------- Dated, this the 25th day of September, 2008 ORDER H.L.Dattu,C.J. The petitioner is a firm. It is registered as a Small Scale Industrial Unit (“SSI Unit” for short). It is also a dealer, registered under the provisions of the Kerala General Sales Tax Act, 1963 (“Act” for short). (2) The assessee in this revision petition calls in question the correctness or otherwise of the orders passed by the Sales Tax Appellate Tribunal, Additional Bench, Kozhikode in T.A.No.209 of 1997 dated 30.09.2002 and the orders passed in Review Petition No.9 of 2003 dated 22.11.2005. (3) The assessee purchases coconut shells from unregistered dealers and manufactures coconut shell powder. The commercial production of the assessee's SSI Unit commenced on 1.10.1992. The assessing authority had levied purchase tax under Section 5(A) of the Act while completing the assessments for the assessment years 1992-93 and 1993-94. Aggrieved by the said assessment orders, the assessee unsuccessfully had carried the matter before the first appellate authority as well as before the Tribunal. (4) Aggrieved by the orders passed by the Tribunal in confirming the orders passed by the assessing authority for the assessment years in question, the assessee is before us in this Sales Tax Revision. S.T.Rev.347/2006 - 2 - (5) The primary contention of the assessee's learned counsel is, that, in view of the notification issued by the State Government in S.R.O. No.1017/2003, published as per G.O.(P) No.175/2003/TD dated 7.11.2003, which has been given effect to from 23.09.1991, the assessee is entitled for total exemption from payment of purchase tax under Section 5A of the Act. In support of that contention, the learned counsel has taken us through the notification issued by the State Government in S.R.O.No.1017/2003. (6) Sri.Muhammed Rafiq, learned Government Advocate, sought to justify the impugned orders. (7) The one and only question that requires to be considered and decided by us is, whether, in view of the notification issued by the State Government in S.R.O.No.1017/2003, the assessee is exigible to pay purchase tax under Section 5A of the Act ? (8) S.R.O.No.1017/2003, published as per G.O.(P) No.175/2003/TD dated 7.11.2003, reads as under: “GOVERNMENT OF KERALA Taxes (B) Department NOTIFICATION G.O.(P) No.175/2003/TD, Dated, Thiruvananthapuram,7th November 2003. S.R.O.No.1017/2003:- In exercise of powers conferred by Section 10 of the Kerala General Sales Tax Act, 1963 (15 of 1963), the Government of Kerala having considered it necessary in the S.T.Rev.347/2006 - 3 - public interest so to do hereby make an exemption in respect of the tax payable on the turnover of purchase of Coconut Shell purchased from unregistered dealers for use in the manufacture of coconut shell powder for sale by units established in the State that started commercial production on or after 23rd September, 1991 and subject to the conditions specified in sub-clause (a) of clause (1) of the Notification issued in G.O.(P) No.97/92/TD, dated 4th May 1992 and published as S.R.O.No.521/92 in the Kerala Gazette Extraordinary No.543, dated 5th May, 1992. This notification shall be deemed to have come into force on 23rd September, 1991. By order of the Governor, SAJEN PETER, Secretary to Government”. (9) The State Government has issued the aforesaid notification in exercise of its powers under Section 10 of the Act in public interest. By the said notification, it grants exemption in respect of the tax payable on the turnover of purchase of coconut shells, purchased from unregistered dealers for use in the manufacture of coconut shell powder for sale by units established in the State that has commenced commercial production on or after 23.09.1991, subject to the conditions specified in sub-clause (a) of clause (1) of the notification, SRO No.521/92 dated 5th May, 1992. (10) The notification is given retrospective effect from S.T.Rev.347/2006 - 4 - 23.09.1991. (11) The undisputed facts are - the assessee is a SSI Unit. It purchases coconut shells from unregistered dealers and manufactures coconut shell powder. It has started its commercial production on 1.10.1992, i.e. on or after 23.09.1991. When the Tribunal passed the impugned orders, it did not have the advantage of the notification issued by the State Government, since it was issued only on 7.11.2003. In fact, after the disposal of the appeal, the assessee had filed a Review Petition before the Tribunal by bringing to their notice the notification issued by the State Government in S.R.O.No.1017/2003, published on 7.11.2003. For the reasons best known to them, the Tribunal has rejected the Review Petition. (12) We have carefully seen the orders passed by the Tribunal and also the notification issued by the State Government in S.R.O.No.1017/2003. It appears to us, the notification issued by the State Government may apply to the petitioner's SSI Unit. In that view of the matter, the impugned order passed by the Appellate Tribunal requires to be set aside and the matter requires to be remanded to the assessing authority to pass fresh assessment order for the assessment year in question in the light of the notification issued by the State Government. (13) Accordingly, we pass the following: S.T.Rev.347/2006 - 5 - Order (i) The revision petition is disposed of. (ii) The orders passed by the Tribunal in T.A.No.209 of 1997 dated 30.09.2002 and the orders passed in Review Petition No.9 of 2003 dated 22.11.2005 are set aside. (iii) The assessing authority is, now, directed to re-quantify the purchase tax liability of the petitioner, for the assessment years 1992-93 and 1993-94, in the light of S.R.O.No.1017, published as per G.O.(P) No.175/2003/TD dated 7.11.2003. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer Judge vku/DK.