1995 (11) TMI 111 - SC - VAT and Sales Tax

Whether the said strapping is a fabric, manufactured, either wholly or partly, from rayon? Held that - The Division Bench cited judgment in support of the view that it was not necessary to refer the respondents to the authorities under the Act. It does not appear to have appreciated that regard must be had to the facts of each case. Where sufficient evidence is placed before the writ court for an unambigous conclusion upon technical matters to be reached. Those authorities might be apposite, but we must stress that where intricate technical processes are involved, it is proper that the writ court should direct writ petitioners to agitate their grievances before statutory authorities who are more competent to assess the merits thereof. Thus the decision of the Division Bench was given upon inadequate material. Appeals are allowed. The judgment and order under appeal is set aside. The respondents shall be at liberty to adopt appropriate proceedings under the Kerala General Sales Tax Act, 1963, to claim exemption for the said strapping for the years 1970-71 and 1971-72. If the appropriate proceedings are adopted by 1-1-1996, the same shall be decided without taking the aspect of limitation into account.

Summary

Issues:
Interpretation of tax exemption under Kerala General Sales Tax Act for Caristrap Rayon Cord Stripping.

Detailed Analysis:

1. Interpretation of Tax Exemption: The respondents claimed tax exemption for Caristrap Rayon Cord Stripping under Entry 8 of Schedule III to the Kerala General Sales Tax Act, 1963. They argued that the stripping was a fabric made purely from rayon yarns and, therefore, fell under the exemption. The appellants, on the other hand, contended that the stripping was a different commercial commodity not covered by the exemption. The Single Judge initially rejected the writ petitions, finding that the requirements of the Act were not satisfied. However, the Division Bench overturned this decision, stating that all articles made from rayon would be considered rayon fabrics.

2. Technical Matters and Authority: The sales tax authorities argued that technical matters were involved in determining the nature of the stripping and that the appropriate authorities under the Act should assess such technical aspects. Both the Single Judge and the Division Bench disagreed with this contention, stating that the writ court was competent to address technical matters. The Division Bench further emphasized that in cases involving intricate technical processes, it was proper for the writ court to direct petitioners to present their case before statutory authorities better equipped to evaluate the technical aspects.

3. Insufficient Evidence and Decision: The Supreme Court found that the decision of the Division Bench was based on inadequate material. The Court concluded that the respondents should have been directed to pursue their grievances before the authorities under the Act to provide necessary evidence and determine whether the stripping qualified for the exemption under the Act. As a result, the decision of the Division Bench was set aside, and the respondents were directed to seek remedy under the Kerala General Sales Tax Act, 1963, for the years in question.

4. Final Decision: The appeals were allowed, and the judgment of the Division Bench was overturned. The respondents were given the opportunity to pursue appropriate proceedings under the Kerala General Sales Tax Act, 1963, to claim exemption for the stripping. The Court specified a deadline for initiating these proceedings and directed that they be decided without considering any limitation issues. No costs were awarded in this matter.