2002 (10) TMI 766 - HC - VAT and Sales Tax

Summary

Issues:
Claim for exemption under Notification S.R.O. No. 364/88 based on the purchase of raw materials for job-works.
Rejection of claim by assessing authority, first appellate authority, and Tribunal.
Interpretation of the Notification requirements regarding the supply of raw materials by customers.
Lack of evidence regarding the nature of work and materials used for job-works.
Applicability of a previous favorable decision by the Appellate Assistant Commissioner for a different year.

Analysis:
The judgment of the High Court of Kerala pertained to a tax revision case where the assessee, a printing press engaged in job-works, claimed exemption under Notification S.R.O. No. 364/88 for the assessment year 1991-92. The assessing authority, first appellate authority, and Tribunal rejected the claim citing lack of evidence that the raw materials purchased were used for job-works on a contract basis. The authorities emphasized the requirement that raw materials must be supplied by customers for exemption under the Notification.

Upon hearing arguments, the Court noted that the authorities had misunderstood the Notification's provisions. The Court clarified that the turnover of contract work is entitled to exemption under S.R.O. No. 364/88, regardless of whether raw materials were purchased by the assessee or supplied by customers. The crucial factor for exemption was determining whether the turnover resulted from a contract for job-works.

Although the authorities found no evidence of work orders from customers, the Court considered a favorable decision by the Appellate Assistant Commissioner for a different year. Consequently, the Court directed the assessing authority to reconsider the matter, allowing the assessee to present all relevant records demonstrating the use of purchased raw materials for job-works. The assessing authority was instructed to make a decision within three months, considering the previous favorable decision and the evidence provided by the assessee.

In conclusion, the High Court disposed of the tax revision case, granting the assessee an opportunity to prove the utilization of raw materials for job-works and emphasizing the importance of evidence regarding the contract nature of the turnover.