IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN FRIDAY, THE 23RD DAY OF DECEMBER 2011/2ND POUSHA 1933 STRV.No. 25 of 2011 ( ) ===================== AGAINST THE ORDER OF THE KERALA AGRICULTURAL INCOME TAX AND SALES TAX APPELLATE TRIBUNAL, ADDL.BENCH, PALAKKAD DTD. 30/10/2010 IN TA.70/2010 AND ORDER DATED 5/2/2011 IN R.P.NO.3/2010. ...... REVISION PETITIONER/RESPONDENT/REVENUE: ========================================= STATE OF KERALA, REPRESENTED BY DEPUTY COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM. BY GOVERNMENT PLEADER SRI.BOBY JOHN RESPONDENT/APPELLANT/ASSESSEE: =================================== * M/S.DORCAS MARKET MAKERS (P) LIMITED., THRISSUR-680 004. * THE NAME AND ADDRESS O THE RESPONDENT IS AMENDED AS M/S. DORCAS MARKET MAKERS (PVT) LTD., SRI BHAGAVATHY TRADERS, SRI PADMAM, 4/500, P.V.SREEDHARAN ROAD, KUMBALAM, KOCHI - 682 506, AS PER ORDER DATED 17/06/2011 IN I.A.NO.1219/2011. BY ADVS. SRI.S.SANTHOSH KUMAR, SRI.S.VINODKUMAR, SMT.P.LISSY JOSE. THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 23-12-2011 ALONG WITH STRV. 29/2011 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Kss STRV.NO.25/2011 APPENDIX PETITIONER'S ANNEXURES: ANNEX.A: COPY OF THE ASSESSMENT ORDER DTD. 10/02/2010 FOR THE YEAR 2004-05. ANNEX.B: COPY OF THE COMMON ORDER OF THE FIRST APPELLATE AUTHORITY DTD. 28/06/2010. ANNEX.C: COPY OF THE ORDER OF THE STAT DTD. 30/10/2010. ANNEX.D: COPY OF THE ORDER OF THE TRIBUNAL DTD. 5/02/2011 IN R.P.NO.3/2010. ANNEX.E: COPY OF THE JUDGMENT IN WP(C) NO.33649/2009 DTD.24/11/2010. RESPONDENT'S ANNEXURES: N I L /TRUE COPY/ P.A.TO JUDGE Kss C.N.RAMACHANDRAN NAIR & K.VINOD CHANDRAN, JJ. .................................................................... S.T.Rev.Nos.25, 29, 30, 32, 33 & 43 of 2011 .................................................................... Dated this the 23rd day of December, 2011. J U D G M E N T Ramachandran Nair, J. The connected Sales Tax Revision cases are filed challenging the orders of the Tribunal remanding the cases again for the respondents to produce evidence to prove their case that the soaps made and sold are hand made. 2. We have heard learned Government Pleader for the revision petitioner and also learned counsel appearing for the respondent assessee. 3. Question raised is whether the respondent assessee is entitled to concessional rate of tax on soaps, which attract lower rate only if it is hand made. In other words, if soaps made and sold are made in factory engaging machines, then the respondent will not be entitled to concessional rate claimed by them. The volume of business is such that it gave rice to a a suspicion as to whether the soaps manufactured and sold were hand made. Therefore, even before assessment S.T.Rev.Nos.25/2011 & connected cases 2 itself, an inspection was conducted in the factory and pattern of manufacturing, equipments involved etc. were noticed. Assessments made holding that soaps are not hand made, were interfered by the Tribunal by directing one more inspection of the factory, which was also done. A second round assessment was made based on fresh inspection report of the factory and the assessment made at higher rate was sustained in the first appeal. When the matter again went to the Tribunal, the Tribunal has now chosen to remand the matter again, which is challenged by the State because the Tribunal being the final fact finding authority instead of repeatedly remanding cases should decide by themselves. We not only agree with this contention but we also do not find any need for a third inspection of the factory more so when the respondent itself maintains that the factory as of now is not the same as that existed during the relevant years. 4. In our view, if the turn over is compared with the permanent labour force, the same itself will reflect the S.T.Rev.Nos.25/2011 & connected cases 3 involvement of human agency in manufacturing. If the respondent had a massive labour force, which can be proved by furnishing details of payment of employees provident fund, payment of bonus, remittance to gratuity accounts maintained etc., the same will be indicative of the extent of manual work in soap making. The very fact that human agency is involved, does not mean that the soap manufactured by using man power is hand made soap. Distinction is essentially between hand made and machine made. The fact that machines are operated by hand also does not mean that the soap is hand made. However, as rightly pointed out by the respondent's counsel, some kind of devices and equipments are required even for making soaps by hand. These are certainly matters to be considered by the Tribunal with reference to the data gathered, availability of machines, labour force engaged and all other attending circumstances. When there are two inspection reports, we do not see for what purpose the Tribunal has remanded the matter again for obtaining further S.T.Rev.Nos.25/2011 & connected cases 4 materials. 5. So far as the demand of interest under Section 23 (3A) is concerned, the issue stands decided by the Full Bench of this Court in State of Kerala v. Western India Cosmetic And Health Products Ltd. & Ors., reported in 2010(18) KTR 414. In view of the above observations and findings, we vacate the orders of the Tribunal and remand the matter back to the Tribunal for decision afresh on merits, after hearing both sides and after considering the materials on record and any other materials which both sides are free to produce. The Tribunal is directed to pass orders within a period of three months from the date of receipt of a copy of this judgment. These S.T.Revision cases are disposed of as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (K.VINOD CHANDRAN, JUDGE) jg