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TMI Blog2012 (10) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... n tune with the policy of the Government to encourage Khadi and Village Industries, by Notification in G.O. Ms. No. 122, dated March 20, 1992, the Government of Tamil Nadu exempted sales effected by the institutions certified by Khadi and Village Industries Commission, Bombay, and its regional office at Madras, in respect of sale of all products of village industries specified in the Schedule to the Khadi and Village Industries Commission Act, 1956. 2. Based on the above notification, the respondent-assessee claimed exemption on the sale of products/which were purchased from outside the State from trader dealing in products of Khadi and Village Industries. The assessing officer originally issued a notice, taking the view that as per the Government Order, in respect of sale of all products of village industries specified in the Schedule to the Khadi and Village Industries Commission Act, 1956, effected by the institutions certified by the Khadi and Village Industries Commission, Bombay and its regional office at Madras, alone were eligible for exemption from tax. The exemption, however, would not be available to the products of other concerns, sold by individual trading dealers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from any certified village industries, but from the individual dealers in other State, who were not institutions certified by Khadi and Village Industries Commission. In the absence of any evidence placed by the assessee relating to the purchase of products purchased from such institution certified by Khadi and Village Industries Commission, the reliance placed on G.O.Ms. No. 122, dated March 20, 1992, was rejected and the assessment order was confirmed. 5. The assessee went on further appeal before the Sales Tax Appellate Tribunal, which, on perusal of the list of goods purchased by the assessee, held that the purchases were effected only from the recognized societies, who were the manufacturers of handicraft products in other States recognized by the Khadi and Village Industries Commission, Bombay, hence, the assessee was entitled to the benefit of exemption. Aggrieved by this, the Revenue is on appeal before this court. 6. The learned Government Advocate appearing for the Revenue pointed out that the assessee had admitted that the goods were purchased by him not from institution certified by the Commission, but from other dealers, therefore, the conclusion drawn by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng (including mother units) or managing any village industry. 10. The rural area is defined in Chapter-I, section 2(ff) of the Khadi and Village Industries Commission Act, 1956, as follows:- (ff) 'Rural area' means the area comprised in any village, and includes the area comprised in any town, the population of which does not exceed (twenty thousand) or such other figure as the Central Government may specify from time to time. 11. Section 15 of Chapter III of the Khadi and Village Industries Commission Act, 1956, touches on the functions of the commission on various activities enumerated thereof. Section 15(2)(d) of Chapter III states that the commission shall take steps, to promote the sale and marketing of khadi or products of village industries or handicrafts and for this purpose forge links with established marketing agencies wherever necessary and feasible . Section 15(2)(k) of Chapter III states the commission shall take steps, to ensure genuineness and to set up standards of quality and ensure that products of khadi and village industries do conform to the said standards, including issue of certificates or letters of recognition to the concerned p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the definition of village industry and rural area defined in section 2(h) and 2(ff) of Chapter-I of the Khadi and Village Industries Commission Act, 1956, it is clear that if the specified products are manufactured by industries other than village industries, the benefit of exemption would not be of any avail to an assessee, even though, they are recognised by the Khadi and Village Industries Commission. Again so long as the Institutions certified by Khadi and Village Industries Commission deal with products of Village Industries, which fit in with the description of section 2(h)(i) and (ii) of the Khadi and Village Industries Commission Act, 1956, there could be no denial of exemption from payment of tax. Thus the twin conditions as specified in the Schedule are to be complied with by the assessee before claiming any exemption under the Government Order. The mere fact that the product is one of the nature of goods manufactured by the village industries specified in the Schedule to the Khadi and Village Industries Commission Act, 1956, per se would not confer any benefit to the assessee for claiming the exemption under G.O.Ms. No. 122 dated March 20, 1992. Going by the clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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