9911796707
TMI Blog2008 (6) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 10 of the Kerala General Sales Tax Act, 1963 ("the KGST Act", for short), in supersession of its earlier notification, S.R.O. No. 262/ 96. By the said notification, exemption is granted in respect of tax payable under section 5 of the Act to an industrial unit, manufacturing cement using fly ash generated in the State as raw material. The exemption that can be granted under the aforesaid notification shall not exceed 500 per cent of the fixed capital investments of the unit. The notification itself says, that, the exemption notification is subject to all the other conditions and restrictions imposed under the Notification S.R.O. No.1729/93. Pursuant to the aforesaid notification issued by the State Government, the assessee had approached the Director of Industries and Commerce by filing an application for grant of eligibility certificate so as to facilitate the industrial unit to approach Secretary, Board of Revenue (Taxes), Thiruvananthapuram to grant exemption from payment of sales tax for the products manufactured by it as envisaged in the notification. The Director of Industries and Commerce, after considering the application filed by the petitioner, has issued el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the exemption certificate that was issued by the Director of Industries and Commerce and the order passed by the Secretary, Board of Revenue (Taxes), the assessing authority had completed the assessment proceedings and in that had granted total exemption from payment of tax under section 5 of the Act. Since these two orders of assessment have been found to be irregular, illegal and prejudicial to the interests of the Revenue, the Deputy Commissioner of Commercial Taxes, in exercise of his powers under section 35 of the Act, had issued notice to the petitioner asking it to show cause, why the orders of assessment passed by the assessing authority for the aforesaid assessment years should not be cancelled and be remitted back to the assessing authority for a fresh disposal. For the disposal of these revision petitions, it is necessary to extract the notice issued by the revising authority. The same is as under: "Please take notice that your KGST assessment for the years 19992000 and 2000-01 were completed on February 20, 2003 and April 16, 2003, respectively. As per order No. C4-28282/96/TX dated July 6, 1996 exemption for 7 years was granted for the manufacture and sale of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act for a period of 10 years and therefore, the revising authority could not have issued any notice to revise the orders passed by the assessing authority. After receipt of the reply so filed, the revising authority has proceeded to confirm the proposal made by him in the show-cause notice dated February 6, 2007. Aggrieved by the orders passed by the revising authority, the assessee had carried the matter by way of appeals before the Sales Tax Appellate Tribunal, Additional Bench, Kottayam in T.A. Nos. 43 and 44 of 2007. The Tribunal by its order dated May 29, 2007 has rejected the appeals. The reasoning and the conclusions reached by the Tribunal are as under: "(a) The Tribunal found that the decision of the honourable Supreme Court in Hira Cement's case [2006] 145 STC 264 was applicable to the facts of the case and therefore, the Deputy Commissioner was justified in following the said decision in cancelling annexures V and VI orders (para 14 of the Tribunal order) (b) Regarding the contention of the petitioner that an order of exemption passed by the Secretary, Board of Revenue (Taxes), cannot be nullified by the assessing authority, the Tribunal found that the Deput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Notification S.R.O. No. 388/96, read with S.R.O. No. 1729/93, the revising authority could not have initiated suo motu revisional proceedings to revise the order passed by the assessing authority for the two assessment years, viz., 1999-2000 and 2000-01, on the ground that those orders are prejudicial to the interest of the Revenue. Secondly, the learned counsel would submit, that, without cancelling the eligibility certificate issued by the Director of Industries and Commerce and the orders passed by the Secretary, Board of Revenue (Taxes) granting exemption from payment of tax under section 5 of the Act, the revising authority could not have initiated any proceedings much less revisional proceedings to revise the orders passed by the assessing authority granting exemption to the assessee solely based on those two orders. Therefore it is stated that the orders passed by the revising authority is illegal, irregular, arbitrary and bad in law. The learned counsel would further submit that the Tribunal, without clearly appreciating the stand of the assessee, has rejected the assessee's appeal. Therefore the said order also requires interference by this court. The learned se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all the other conditions and restrictions imposed in S.R.O. No. 1729/ 93, other than that relating to the quantum of exemption shall be applicable to S.R.O. No. 388/96. The notification issued by the State Government is as under: "Kerala General Sales Tax Notifications Sl. No. 526: Amendment of S.R.O. No. 262/96 S.R.O. No. 388/96.-In exercise of the powers conferred by section 10 of the Kerala General Sales Tax Act, 1963 (15 of 1963) and in supersession of the notification issued in S.R.O. No. 262/96 dated March 11, 1996, the Government of Kerala, having considered it necessary in the public interest so to do, hereby make an exemption in respect of the tax payable under section 5 of the Kerala General Sales Tax Act by industrial units manufacturing cement using fly ash generated in the State as a raw material, subject to the condition that the total quantum of exemption shall not exceed 500 per cent of the fixed capital investment of the unit. The exemption shall be subject to all conditions and restrictions imposed by Notification S.R.O. 1729/93 [G.O. (P) No. 155/93/TD dated November 3, 1993] other than that relating to the quantum of exemption. This notification shall be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the outset we would state that the dictum laid down by the apex court in Hira Cement's case [2006] 145 STC 264 will not apply to the facts and circumstances of the present case. That was a case where Hira Cements claimed exemption from payment of excise duty in terms of Notification No. 1/93-CE dated February 28, 1993. Paragraph 4 of the notification specifically stated, that, the exemption contained in the notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under the said notification. The Department held that the assessee was not entitled to exemption, since the assessee was using the brand name of HI Ltd., which demonstrated financial relationship between them. The apex court while remanding the matter for fresh adjudication to the Appellate Tribunal, has observed that, even the use of a part of a brand name or trade name, so long as it indicated a connection in the course of trade, would be sufficient to disentitle the person from getting the exemption. The notification issued by the State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y because petitioner's industrial unit uses the brand name of another person, it does not mean that the petitioner's industrial unit is not manufacturing cement using fly ash and effecting sale of such cement both within the State as well as outside the State. Since the industrial unit fulfils all the conditions that are stated in S.R.O. Nos. 388/96 and 1729/93, the revisional authority/Deputy Commissioner of Commercial Taxes, merely relying upon a decision which has no bearing whatsoever on the facts and circumstances of this case, could not have initiated any proceedings for revising an order of assessment passed by the assessing authority for the two assessment years in question. Since we are granting relief to the petitioner on the first issue itself, we need not have to consider the other issues canvassed by the learned senior counsel, Sri Joseph Vellappally. In that view of the matter, the revision petitions requires to be allowed and the questions of law framed by the assessee require to be answered in favour of the assessee and against the Revenue. Accordingly the revision petitions are allowed and the orders passed by the revisional authority and the Tribunal are ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
