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2007 (12) TMI 424 - HC - VAT and Sales TaxWhether the assessing authority was justified in completing the assessments for the assessment years in question, by ignoring the orders passed by the District Level Committee, which had declared that the assessee is entitled for exemption from payment of sales tax on the sale of plywoods, both intra and inter-State sales Held that - As for the reason, that under the notification the District Level Committee is authorised to determine, whether a particular industry manufacturing a particular commodity is eligible for exemption from payment of tax under the Act or not. The negative list of industries is appended to the notification would specifically provide that certain industrial units manufacturing items such as biscuits, cement paints, packing cases, tea chests, plywood, etc., shall not be eligible for the concessions under the notification. Therefore, the District Level Committee while considering the application filed by the petitioner s industrial unit claiming exemption from payment of sales tax on the manufacture and sale of plywoods did not have jurisdiction to entertain such an application. Therefore, it can safely be said that this is a case of District Level Committee having want of jurisdiction and not one of irregular assumption of jurisdiction. Therefore, the order passed by the District Level Committee in regard to plywood is one without jurisdiction and therefore, a nullity in the eye of law and therefore, the assessing authority was justified in passing the assessment orders for the assessment years 1997-98 and 1998-99 in levying tax under the Act on the sale of plywoods both under the KGST and CST Acts. No merit in these revision petition.
Issues Involved:
1. Entitlement to exemption on the sales turnover of plywood. 2. Applicability of S.R.O. No. 403 of 1994 and the clarificatory letter dated June 8, 2002, regarding section 5A purchase turnover of softwood. 3. Legality of the interest levied. Detailed Analysis: Re. Issue No. 1: Entitlement to exemption on the sales turnover of plywood The assessee, a small-scale industrial unit, sought exemption from sales tax under the Kerala General Sales Tax Act (KGST Act) and Central Sales Tax Act (CST Act) based on Notification S.R.O. No. 1729 of 1993. This notification granted tax exemptions to industrial units, subject to conditions and restrictions. However, S.R.O. No. 404 of 1994, effective from April 1, 1994, amended the notification by adding clause (x) to the Explanation, excluding certain industries, including those manufacturing plywood, from these concessions. The District Level Committee initially granted the assessee exemption from July 5, 1995, to July 4, 2002, without considering the amendment. Upon realizing this error, the Committee amended its order on August 2, 2003, to exclude plywood from the exemption list. The assessing authority, upon completing assessments for 1997-98 and 1998-99, rejected the exemption claim for plywood sales. The court held that the District Level Committee had no jurisdiction to grant exemption for plywood sales from the outset, as plywood was included in the negative list per S.R.O. No. 404 of 1994. The court cited several precedents, emphasizing that exemptions and concessions under fiscal legislation should be strictly interpreted and that any administrative act outside jurisdiction is void in law. The court concluded that the assessing authority was justified in rejecting the exemption claim and levying tax on plywood sales. Re. Issue No. 2: Applicability of S.R.O. No. 403 of 1994 and the clarificatory letter dated June 8, 2002 The court rejected this issue, noting that it was not raised before the Tribunal and, therefore, could not be adjudicated in the revision petition. The court emphasized that its power of revision under section 41 of the Act is limited to adjudicating issues that the Tribunal failed to decide or erroneously decided. Re. Issue No. 3: Legality of the interest levied Similar to Issue No. 2, the court rejected this issue as it was not raised before the Tribunal. The court reiterated that it could only adjudicate issues that were urged and argued before the Tribunal. Conclusion: The court rejected the revision petitions, affirming the Tribunal's decision to deny the exemption on plywood sales and uphold the tax assessments. The court emphasized that the District Level Committee's initial order granting exemption was without jurisdiction and thus a nullity in law. The court also clarified that issues not raised before the Tribunal could not be adjudicated in the revision petition.
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