IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MRS. JUSTICE M.C.HARI RANI WEDNESDAY, THE 21ST MAY 2008 / 31ST VAISAKHA 1930 ST.Rev.No. 31 of 2005 -------------------------------------- (TA.No.5/2003 OF KERALA AGRICULTURAL INCOME TAX AND SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, PALAKKAD) (ORDER DATED 17-2-2003) .................... REVISION PETITIONER/RESPONDENT/REVENUE: ---------------------------------------------------------------------- STATE OF KERALA, REPRESENTED BY THE DEPUTY COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM. BY SPECIAL GOVERNMENT PLEADER SRI.VINOD CHANDRAN. RESPONDENT/APPELLANT/ASSESSEE: ------------------------------------------------------- M/S.LAKSHMY POLYMERE, MANUFACTURERS OF PVC PIPE FITTINGS, SHORANUR-2. BY ADV. DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 21/05/2008, ALONG WITH STRV NO. 41 OF 2005 THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.DATTU, C.J. & M.C. HARI RANI, J. ------------------------------------------------------------------ S.T.Rev.Nos.31 of 2005 & 41 of 2005 ------------------------------------------------------- Dated, this the 21st day of May, 2008 O R D E R H.L.Dattu, C.J. These two revision petitions are filed against the orders passed by the Kerala Agricultural Income Tax and Sales Tax Appellate Tribunal, Palakkad in T.A.Nos. 5 and 6 of 2003 dated 17-2-2003. (2). By the impugned order, the Tribunal has allowed the assessee's appeal and has declared that the petitioner is entitled for the benefit of Section 5 (3) of the Kerala General Sales Tax Act. (“Act “ for short). (3). Aggrieved by the said order passed by the Tribunal, the Revenue is before us in these tax revision cases. The Revenue has framed the following questions of law for our consideration and decision. They are as under: i). Whether on the facts and in the circumstances of the case, the Tribunal is justified in holding that no assessment can be done as per sub-clause ii of sub section 3 of section 5 since the materials purchased have been used for the production of goods. ii). Is not the Tribunal erred in holding that the assessee/respondent has not violated any of the provisos of sub-section 3 of Section 5. iii). Whether on the facts and in the circumstances of the S.T.R.V.Nos.31 & 41/2005 -2- case, is the Tribunal justified in not holding that the assessee/respondent has violated second proviso of sub- section 3 of Section 5 and thereby assessing authority is justified in invoking sub-clause ii of sub section 3 of section 5. iv). Whether on the facts and in the circumstances of the case, the Tribunal justified in holding that there is no liability under section 17 (5A). (4). Though the matter is posted for admission, by consent of the learned counsel for the parties to the lis, the matter is taken up for final hearing. (5). The assessee is engaged in the manufacture and marketing of PVC pipes. The assessments have been completed by the assessing authority and in that had granted relief to the assessee. Thereafter revised assessment orders came to be passed for the assessment years 1996-1997 and 1997-1998. The dispute is with regard to the purchase of raw materials at concessional rates against Form 18 declaration and disposal of the finished products by way of local sales, inter- state sales and stock transfer to branches outside the State. The assessing authority had levied differential rate of tax for the finished goods which were disposed of by stock transfer to branches outside the State. (6). The assessee being aggrieved by the orders so passed by the assessing authority, had preferred first appeal before the first appellate authority. The first appellate authority has confirmed the revised S.T.R.V.Nos.31 & 41/2005 -3- orders of assessment passed by the assessing authority for the assessment years 1996-1997 and 1997-1998. (7). The assessee being aggrieved by the aforesaid order passed by the first appellate authority had carried the matter by way of second appeal before the Tribunal. The Tribunal has taken the view that since the assessee has utilized the entire raw materials purchased against Form 18 declarations for the production of finished goods, the assessee is not liable to pay differential rate of tax at 7% and therefore, the authorities were not justified in levying differential rate of tax by invoking Sec.5 (3) (ii) of the Act. The Tribunal, consequently has also set aside the order of penalty passed by the assessing authority under Section 17 (5A) of the Act. (8). The Revenue, being aggrieved by the order so passed by the Tribunal, has filed these revision petitions before us. (9). Sri.Vinod Chandran, learned Special Government Pleader appearing for the respondents would submit that, the Tribunal, without noticing the proviso appended to Section 5 (3) of the Act has allowed the assessee's appeals and thereby has set aside the orders passed by the assessing authority. In support of his contention, the learned counsel has brought to our notice the proviso appended to Section 5 (3) of the Act. (10). Dr.K.B.Muhamed Kutty, learned senior counsel appearing for the respondents sought to justify the impugned order passed by the Tribunal. (11). We have carefully perused the orders passed by the Tribunal. In the body of the order, the Tribunal has not noticed the proviso S.T.R.V.Nos.31 & 41/2005 -4- appended to Section 5 (3) of the Act. It is also not brought to our notice whether the proviso appended to Section 5 (3) of the Act was brought to the notice of the Tribunal by the representative of the Revenue when he argued the matter before the Tribunal. In our opinion, if for any reason, the Tribunal, has not noticed the proviso appended to Section 5 (3) of the Act, the same ought to have been brought to the notice of the Tribunal and the representative of the Revenue should have requested the Tribunal to answer the issue before them with reference to the proviso appended to Section 5 (3) of the Act. (12). In our opinion, this is not a fit case where the revision petitions should be entertained since we are of the opinion that the Tribunal has not either erroneously decided the question of law or failed to decide the question of law. Further, in our opinion, this is a case where the Revenue has to file appropriate review petitions before the Tribunal and bring to the notice of the Tribunal the proviso appended to Section 5 (3) of the Act. In that view of the matter, without going into other details, we dispose of these revision petitions reserving liberty to the Revenue to file appropriate review petitions before the Tribunal within a month's time from today. If the Revenue files such review petitions within the time granted by this Court, the Tribunal shall consider the same in accordance with law, without reference to the period of limitation. Dr.K.B.Muhamed Kutty, learned counsel appearing for the respondents has no objection whatsoever for directing the Tribunal to decide the review petitions that may be filed by the Revenue within the time granted by this Court. In view of the above, we pass the following: S.T.R.V.Nos.31 & 41/2005 -5- Order i). The Revision Petitions are disposed of. ii). The Revenue is permitted to file appropriate review petitions before the Tribunal within a month's time from today. iii). If the Revenue files the review petitions within the time granted by this Court, the Tribunal is requested to consider the review petitions filed, in accordance with law, without reference to the period of limitation. (13). All the contentions of both the parties are left open. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (M.C.HARI RANI) JUDGE MS