IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 3RD MARCH 2009 / 12TH PHALGUNA 1930 ST.Rev..No. 374 of 2008() ------------------------- TA.294/2007 of S.T.A.T.ADDL.BENCH,ERNAKULAM .................... REVISION PETITIONER/RESPONDENT/REVENUE ---------------------------------------------------------- STATE OF KERALA, REP. BY ASSISTANT COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM. BY SPL. G.P. SRI.VINOD CHANDRAN RESPONDENT(S): APPELLANT/ASSESSEE --------------------------------- SRI.T.G.CHANDRAKUMAR, TEESON RUBBERS, THRISSUR DISTRICT. ADV. SRI.D.ANIL KUMAR FOR R THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ALONG WITH STRV NO.325/2008 ON 03/03/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. .................................................................... S.T. Revn. Nos.374 & 325 of 2008 .................................................................... Dated this the 3rd day of March, 2009. ORDER Ramachandran Nair, J. Heard Special Government Pleader and counsel appearing for the respondent. Question is with regard to rate of tax on the product manufactured and sold by the respondent-assessee, which is tread rubber. The specific case of the Special Government Pleader is that respondent has produced tread rubber by using synthetic rubber only and even if natural rubber is mixed with synthetic rubber, the product falls under Entry 40. We find force in this contention because products of synthetic rubber and mixture of synthetic rubber and natural rubber fall under Entry 40. However, counsel for the respondent-assessee contended that assessee is engaged in manufacture of tread rubber without using synthetic rubber also i.e. by using natural rubber alone. Though tread rubber can be manufactured without use of synthetic rubber, synthetic rubber is also used generally because it adds durability to the product. Therefore, generally mixture of natural 2 rubber and synthetic rubber are used in the production of tread rubber. In any case if respondent has exclusive production of tread rubber with natural rubber alone, then they are entitled to be assessed under Entry 39. This matter will have to be verified with reference to purchase, stock held and utilisation in the manufacture. The Tribunal in fact directed verification of purchase register for the purpose of bifurcation of turnover. In fact, what is relevant is not purchase register alone, but manufacturing account which shows utilisation in production of every batch of the product. We allow the revisions in principle and modify the order of the Tribunal by directing the Assessing Officer to verify manufacturing account and bifurcate the turnover based on ingredients used in the production and assess the respective turnover at the applicable rate under Entries 39 and 40 of the KGST Act. C.N.RAMACHANDRAN NAIR Judge K.SURENDRA MOHAN Judge pms