2006 (8) TMI 572 - HC - VAT and Sales Tax

Summary

Issues:
- Interpretation of sales tax exemption under entry 17 and entry 24 of the Kerala General Sales Tax Act, 1963.

Analysis:
The case revolved around the question of whether the Sales Tax Appellate Tribunal correctly upheld the claim of sales tax exemption on the product "Neopeat" marketed by the respondent. The product, made of coir pith or coir fibre dust with short length fibres, was certified by the Coir Board as coir pith falling under entry 17 of the Third Schedule to the KGST Act. The petitioner argued that the product did not qualify as organic manure under entry 17 and thus was not entitled to exemption. On the other hand, the respondent contended that the product could be classified under entry 24 and should be exempt from tax.

Upon examining the relevant entries, the court referred to entry 17 which listed items like organic manure and entry 24 which included coir and coir products. The court noted that the product in question, being a by-product of coconut husk, did not fit the definition of organic manure as per entry 17. However, considering the broad language of entry 24 which provided exemption to all coir and coir products other than rubberised coir fibre foam, the court concluded that the product fell within this category. The legislative intent to grant exemption to products made from coir and coconut husk was evident, with only rubberised coir products intended for taxation. Therefore, the court upheld the Tribunal's decision, ruling in favor of the respondent and dismissing the revision case.