DEEPA PANELS Vs STATE OF KERALA
Bench: MUKUNDAKAM SHARMA,ANIL R. DAVE, , ,
Case number: C.A. No.-005348-005350 / 2011
Diary number: 7783 / 2009
Advocates: C. N. SREE KUMAR Vs
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S) 5348-5350 OF 2011 (Arising out of SLP (Civil) No(s) 16830-16832 of 2009)
DEEPA PANELS Appellant(s)
VERSUS
STATE OF KERALA Respondent(s)
O R D E R
1. Delay condoned.
2. Leave granted.
3. The appellant herein is an assessee manufacturing
chemically treated rubberwood products. The assessee filed
its annual returns claiming exemption from payment of
purchase tax. In that context, the issue that arose for
consideration is whether the assessee is entitled for
exemption from payment of purchase tax.
4. The contention of the appellant was that the appellant
is eligible for exemption from payment of tax in respect of
purchase of rubberwood from unregistered dealers. For the
assessment year 1998-99, 1996-97, the assessing authority
completed the assessments and granted exemption even from
payment of purchase tax. However, after the aforesaid
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assessment orders were passed, action was taken for re-
opening of the assessment for the aforesaid assessment years
in question and a notice to that effect was issued to the
assessee who in receipt of the aforesaid notice filed its
reply contending, interalia, that in view of the exemption
certificate granted by the General Manager, District
Industries Centre, the assessee is entitled for exemption
from payment of purchase tax. The assessing authority
considered the records including the objections taken by the
assessee and thereafter it held and passed an order of
assessment that the assessee is not entitled from exemption
of levy of purchase tax under Section 5A of the Karnataka
General Sales Tax Act [for short “KGST Act”].
5. Aggrieved by the orders of the assessment passed for
the assessment year 2001-2002 and orders of re-assessment
passed by the assessing authority for the assessment years
1998-99 and 1996-97, the assessee filed appeals before the
Kerala Sales Tax Appellate Tribunal, Addl. Bench, Palakkad.
The Tribunal by its orders dated 10.08.2004 and 06.08.2007
rejected the appeals filed by the appellant against the
order of re-assessment for the years 1996-97 and 1998-99 and
also the order of assessment for the year 2001-2002.
6. Aggrieved by the aforesaid orders passed by the
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Tribunal, revision petition was filed before the Kerala High
Court which was registered as Sales Tax Revision No. 6 of
2008. The High Court, after hearing the counsel appearing
for the parties held that the article manufactured by the
assessee is not covered by the Notification SRO No. 1729 of
1993 and, therefore, the issue that arises for consideration
according to the High Court was covered by the decision of
this Court in the case of State of Kerala Vs. Vattukalam
Chemicals Industries 2001(6) SCC 764. In that view of the
matter, it was held that the assessee was not entitled for
exemption from payment of purchase tax. The High Court
further held that the assessee at best could be entitled for
exemption only on the goods manufactured and sold and no
exemption could be granted from payment of purchase tax.
The aforesaid findings which are recorded by the High Court
are under challenge in these appeals in which we have heard
learned counsel appearing for the parties.
7. Having considered the submission of the learned counsel
appearing for the parties and also the decisions referred
to, we are of the view that the facts of the case in hand
are similar to the one which was decided by this Court in
the case of State of Kerala Vs. Vattukalam Chemicals
Industries(supra). Learned counsel appearing for the
appellant, however, relied upon two decisions of this Court
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being Pondicherry State Cooperative Consumer Federation Ltd.
Vs. Union of Pondicherry 2008(1) SCC 206 and Vadilal
Chemicals Ltd. Vs. State of A.P. and others 2005(6) SCC 292.
8. Having considered the ratio laid down by the aforesaid
decisions in the light of the Notifications relevant for the
purpose of deciding this case and referred to by the learned
counsel appearing for the parties, we are of the opinion
that the two decisions which are relied upon by the learned
counsel appearing for the appellant are distinguishable on
facts. In the aforesaid two decisions relied upon, the
exemption certificates which were issued by the District
Industries Department consisting of experts on the subject
were sought to be interpreted by the assessing authority and
thereby arriving at the conclusion for denial of the benefit
of exemption to the assessee therein.
9. This Court also noted that there is a turn around by
the State by taking two contradictory stands at two
different points of time, which according to this Court,
should not have been done, and in that view of the matter,
the aforesaid two decisions were rendered. In our
considered opinion, the ratio of the aforesaid two decisions
are distinguishable on facts but so far as the decision of
this Court in Vattukalam Chemicals Industries(supra) is
concerned, the facts are almost similar. In that Judgment,
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this Court has clearly held that the assessee therein is not
entitled for exemption from payment of purchase tax as the
article manufactured is not included in the Notification,
namely, SRO No. 499/1990. Learned counsel appearing for the
appellant, however, sought to submit that SRO No. 499/1990
which was considered in the aforesaid case i.e. Vattukalam
Chemicals Industries case(supra)was superseded by a
subsequent Notification SRO No. 1729 of 1993.
10. We have perused and considered the said Notification
very carefully but in the said Notification also, we find
that no exemption was granted to the article manufactured by
the appellant as well. The ratio of the decision in the
case of Vattukalam Chemicals Industries (supra) was laid
down in the context of the Notification SRO No. 499/1990.
There is no change in the ground situation in the subsequent
Notification also and, therefore, we see no reason as to why
the ratio of the decision in Vattukalam Chemicals Industries
(supra) would not be applicable to the facts and
circumstances of the present case.
11. We are also of the opinion that the assessee could be
said to be entitled for exemption only on goods manufactured
and sold but it cannot claim any exemption from payment of
purchase tax.
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12. Having held thus, we find no merit in these appeals
which are accordingly dismissed. No costs.
.......................J. (DR. MUKUNDAKAM SHARMA)
.......................J. (ANIL R. DAVE)
NEW DELHI JULY 12, 2011.
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