IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 22ND MAY 2008 / 1ST JYAISHTA 1930 WP(C).No. 31477 of 2003(V) -------------------------- PETITIONER: ------------ M/S/SAROJA OIL MILLS, 2/297, PARAVATTANI, THRISSUR - 680 005M EREP. BY ITS PROPRIETRIC SMT.R.SAROJA. BY ADV. SRI.U.K.RAMAKRISHNAN (SR.) SRI.P.V.LOHITHAKSHAN SMT.P.VIJAYAMMA SMT.UMA GOPINATH SRI.V.KRISHNA MENON SRI.DEVIDAS.U.K SRI.SANDEEP.E. SMT.AMRITA JAYARAM RESPONDENTS: ------------- 1. STATE OF KERALA REP. BY THE SECRETARY TO GOVERNMENT(FINANCE & TAXES), GOVT.SECRETARIAT, TRIVANDRUM. 2. THE DISTRICT LEVEL COMMITTEE ON TAX EXEMPTION, THRISSUR REP. BY GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, THRISSUR. 3. THE STATE LEVEL COMMITTEE ON TAX EXEMPTION, TRIVANDRUM, REP. BY THE DIRECTOR OF INDUSTRIES AND COMMERCE (MEMBER SECRETARY), VIKAS BHAVAN, TRIVANDRUM. 4. THE DIRECTOR OF INDUSTRIES AND COMMERCE, THIRUVANANTHAPURAM. 5. THE ADDITIONAL SALES TAX OFFICER, IST CIRCLE, AYYANTHOLE, THRISSUR. BY GOVERNMENT PLEADER SRI.TEKCHAND THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22/05/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF APPLICATION FOR EXEMPTION DT.30.4.98 FILED BY THE PETITIONER BEFORE R2. P2: TRUE COPY OF APPLICATION DT.30.4.98 FOR SUBSIDY FILED BY PETITIONER BEFORE R2. P3: TRUE COPY OF ORDER DT.28.5.99 ISSUED BY R2 TO THE PETITIONER. P4: TRUE COPY OF SUBSIDY SANCTION LETTER DT.29.11.99 ISSUED BY R2 TO THE PETITIONER. P5: TRUE COPY OF LETTER DT.10.8.2001 ISSUED BY R2. P6: TRUE COPY OF APPEAL IN FORM NO.7 DT.17.9.2001 FILED BY PETITIONER BEFORE THE DIRECTOR OF INDUSTRIES AND COMMERCE, TRIVANDRUM. P6(A): TRUE COPY OF LETTER DT.17.9.2001 SUBMITTED BY PETITIONER BEFORE THE DIRECTOR OF INDUSTRIES AND COMMERCE, TRIVANDRUM. P7: TRUE COPY OF JUDGMENT DT.8.7.2002 IN OP NO.18641/2002. P8: TRUE COPY OF JUDGMENT DT.11.2.2003 IN W.A. NO.137/2003. P9: TRUE COPY OF GO DT.27.2.2003 ISSUED BY R1. P10: TRUE COPY OF ORDER DT.20.9.2003 ISSUED BY R4 TO THE PETITIONER. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... W.P.(C) No.31477 of 2003 .................................................................... Dated this the 22nd day of May, 2008. JUDGMENT The petitioner is in this court a second round for a direction to the respondents to grant sales tax exemption on the investment in the building. The building constructed is stated to be used as oil mill. Exemption was disallowed on the ground that the land in which building is constructed does not belong to the industry, but belongs to the proprietrix of the industry who is the petitioner herein. This court felt that industry as such cannot own any land or building, but the owner of the industry should be the owner of the land and building. When the industry is a proprietorship concern, naturally land and building should be owned by the proprietor or proprietrix. Since appeal was pending before the third respondent in the first round of litigation, this court directed disposal of the appeal. The appeal is seen disposed of vide Ext.P10 order whereunder exemption is still declined for the reason that petitioner has not shown in the balance sheet, value of the land on which building is constructed. Government Pleader relied on Ext.P9 issued by the Government pursuant to direction contained in the judgment in petitioner's own case wherein Government has stated that 2 investment in land or building in the name of the proprietrix of the industrial unit also will be eligible for exemption, if the investment in land or building is reflected in the books of accounts of the unit. Obviously it is clear from Ext.P9 that the land and building should be shown as the assets of the industry in the balance sheet. It is admitted and it is clear from Ext.P10 order that petitioner has shown the value of the building in the audited balance sheet produced before the third respondent. However, still exemption is declined for the reason that value of the land is not shown in the balance sheet. I am unable to uphold Ext.P10 order for more than one reason. In the first place, counsel for the petitioner stated that land was acquired by the petitioner in 1978, whereas industry was set up only in 1998. Since petitioner has made investment for industrial purpose only in the building, respondents cannot insist that petitioner should claim exemption for the value of the land as well. In fact, the State stands to gain on petitioner's claiming exemption on a reduced amount by excluding value of the land from eligible amount of exemption. Since title of the building is not in dispute, there is no reason why petitioner cannot be granted exemption on the investment in the building under the notification. Ext.P9 does not stand in the way of granting exemption on the investment in the building merely because land value is not capitalised in the books of 3 accounts. The W.P. is accordingly allowed directing the second respondent to grant sale tax exemption on the investment in the building, the value of which is reflected in the accounts produced by the petitioner. Ext.P10 will stand modified to the above extent. Revised order should be issued within a period of one month from the date of production of copy of this judgment by the petitioner. C.N.RAMACHANDRAN NAIR Judge pms