1992 (2) TMI 357 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of S.R.O. No. 968/80 for tax exemption eligibility of a small-scale industrial unit in a tyre retreading business.

Detailed Analysis:
1. The primary issue in this case revolves around the interpretation of S.R.O. No. 968/80 concerning the tax exemption eligibility of an assessee, who is the owner of a small-scale industry engaged in tyre retreading. The Tribunal negatived the plea of the assessee, stating that the unit is not eligible for exemption as per the Government notification. The core question is whether the Tribunal's interpretation of S.R.O. No. 968/80 is legally justified (para. 2).

2. The assessee claimed exemption on the conceded taxable turnover as per S.R.O. No. 968/80, which led to a dispute with the assessing authority. The Deputy Commissioner of Sales Tax (Appeals) held that there is a manufacturing process involved in retreading activity, making the assessee eligible for exemption. However, the State filed appeals before the Tribunal challenging this decision. The Tribunal, relying on the Supreme Court's decision, held that there is no sale of goods in the retreading business, thereby denying relief to the assessee (para. 4, 7).

3. The crux of the matter lies in determining whether there is a sale of the goods produced, specifically the retreaded tyre, by the small-scale industrial unit. Despite the potential manufacturing process involved in retreading, the Tribunal emphasized that there must be a sale of the goods produced to qualify for the exemption under S.R.O. No. 968/80. The Tribunal's decision was upheld, stating that there is no sale of the retreaded tyre, thereby dismissing the revisions (para. 8).

4. The legal analysis delves into the constitutional and statutory provisions, such as Article 366(29A)(b) of the Constitution of India, section 2(xxi) of the Kerala General Sales Tax Act, and the specific terms of S.R.O. No. 968/80. These provisions define the scope of taxable transactions and sales, guiding the assessment of the assessee's eligibility for tax exemption under the small-scale industrial unit category (para. 6).

5. Ultimately, the Court concluded that the Tribunal's decision did not warrant interference in revision. The judgment emphasized that the assessee failed to meet the fundamental requirement of demonstrating a sale of the goods produced, specifically the retreaded tyre, to qualify for the tax exemption under S.R.O. No. 968/80. As a result, the revisions were dismissed, upholding the Tribunal's ruling (para. 8).