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TMI Blog2015 (11) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... ep, Laccadive Co- operative Marketing Federation Kozhikode or the Lakshadweep Harbour Works and registered dealers certified by the Administrator, Union Territory of Lakshadweep, the tax payable under Clause (d) of Section 6 (1), is to be at the rate of 4% (upto 01.04.2012 and 5% after 14.04.2012) subject to such conditions as may be prescribed. The conditions are prescribed in Rule 12C (1) of the KVAT Rules, 2005, which reads as under: "12C. Procedure for claiming exemption or reduction in rates of tax.- (1) Every dealer who makes any sale to the Administrator, Union Territory of Lakshadweep, Laccadive Co-operative Marketing Federation, Kozhikode or the Lakshadweep Harbour Works or any registered dealer certified by the Administrator, Union Territory of Lakshadweep under the proviso to sub-section (1) of section 6 shall obtain a declaration in Form No.42, duly signed and sealed by the buyer along with the copy of the shipping Bill, or similar document duly attested by the Port Authorities and file a copy each of the same along with the return filed under Rule 22. The originals shall be retained by the dealer and shall be provided on demand by any authority under the Act." 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m ship to Barges in the open sea during that time, is not possible. 4. The letters aforementioned, which are together marked as Ext.P4 in the writ petition, make it clear that the procurement of stores/articles by the Lakshadweep Administration is effected in the mainland and the goods that are procured are stored in Stores at Kochi and Beypore, and from the said stores they are transported to the islands over the course of one or two years by various ships/barges to the individual islands, which have indented for the items. The letters also indicate that the payment of the price for the articles purchased is made as soon as the supplier supplies the goods to the Lakshadweep Administration by delivering them to the Store Keeper in the mainland. It would appear from the aforesaid letters that, in the matter of effecting supplies to the Lakshadweep Administration, the role of the petitioner supplier ends with the supply of articles to the Store Keeper at Kochi or Beypore. From there, the transportation to the individual islands within the Lakshadweep archipelago is the responsibility of the Lakshadweep Administration and the petitioner and other similarly situated dealers do not hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention that inasmuch as the statute provides for a concessional rate of tax subject to such conditions as may be prescribed, and the prescription under Rule 12C of the KVAT Rules, is to the effect that the concessional rate of tax will be applicable only on the supplying dealer producing Form-42 declaration duly signed by the buyer, along with a copy of the shipping bill duly attested by the Port authorities, the supplier will not get the benefit of the concessional rate of tax. It is also his submission that the provision in question being one that grants a concession to an assessee, the provisions have to be strictly interpreted against the assessee and in favour of the revenue. It is his contention therefore, that inasmuch as the petitioners have not complied with the mandatory condition for obtaining the concessional rate of tax, the assessment orders, that are impugned in the writ petition cannot be found fault with and they have to be upheld. 8. On a consideration of the facts and circumstances of the case and the submissions made across the bar, I find that as rightly pointed out by the learned Government Pleader, the provisions of the Act read with Rule 112C (1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e attach a construction which effectuates the legislative intent and purpose of the statute. It is also a well settled proposition in taxation law, that exemption provisions under a taxation statute are normally construed strictly against the assessee and in favour of the revenue. The said principle however, has been interpreted in subsequent decisions, as meaning that the strict interpretation of the exemption provision is only at the stage of determining whether the assessee is entitled to the exemption. Once it is found that the assessee is entitled to exemption then the provision has to be liberally construed so as to retain the assessee within the scope of exemption. (See Commissioner of Trade Tax, UP v. Kanhai Ram Thekedar [2005 (4) SCC 472], Andra Pradesh Steel Re-Rolling Mill Ltd. v. State of Kerala [2007 (2) SCC 725] and Novopan India Ltd., Hyderabad v. Collector of Central Excise and Customs, Hyderabad [1994 Supplementary (3) SCC 606]). On applying the said principles to the facts of the instant case, I am of the view, that inasmuch as it is discernible from Ext.P4 letters that the transportation of goods to the Lakshadweep archipelago was not within the scope of the obli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners during the pendency of the writ petition and give credit to the said amounts, while computing the demand, if any, pursuant to the assessment orders to be passed afresh, as per the directions of this Court. 9. In WP(C) No.1331 of 2014, the petitioner, while impugning Ext.P7 order to the extent it denies the concessional rate of tax under the 1st proviso to Section 6(1) of the KVAT Act, has also preferred Ext.P9 rectification application before the 1st respondent assessing authority, for rectifying certain factual errors that had crept into the said order in respect of other issues that were decided against the petitioner by the said order. Ext.P9 is the rectification application preferred by the petitioner. As I have already quashed Ext.P7 order, to the extent it denies the petitioner the benefit of concessional rate of tax referred to above, while directing the 1st respondent assessing authority to redo the assessment of the petitioner under the KVAT Act, for the assessment year 2008-09, I also direct the assessing authority to consider Ext.P9 rectification application preferred by the petitioner, which is pending before him and pass a fresh order dealing with bot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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