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TMI Blog2017 (6) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs. Therefore, until the impugned proceedings were issued, the department was bound by Annexure-I and it is on that basis that refunds were also allowed to the assessee. That apart, the Commissioner also has not issued any clarification that the impugned order would be retrospective as empowered under Section 94(2). While legality of the impugned order is upheld, the appellants shall not be liable to refund any amount already refunded to them on the strength of Annexure-I order dated 15.09.2007. Appeal disposed off. - Antony Dominic And Dama Seshadri Naidu, JJ. Advocates: Advs. Sri. S. Anil Kumar (Trivandrum), Sri. K.S Hariharan Nair And Sr. Government Pleader Sri. Mohammed Rafiq Antony Dominic, J.: Two assesses registered under the Kerala Value Added Tax Act, 2003, (KVAT Act, for short) have filed these appeals aggrieved by the proceedings of the Authority for clarification constituted under Section 94 of the KVAT Act whereby it was clarified thus: (a) As such, it is clarified that sale of commodities to an industrial unit situated in a Special Economic Zone located outside the State is an inter-state sale for which, the set-off and refund provisions for an inter-state sale und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 94. Secondly, it is argued that in view of the provisions contained in the Special Economic Zones Act, 2005, (SEZ Act, for short), sale to a unit within the SEZ is a deemed export which finding is already recorded in Annexure-I, entitling the appellant to the benefit of Section 13(2) or 13(3) of the KVAT Act, as the case may be. He further argued that till impugned clarification was issued by the Authority, the field was governed by Annexure-I clarification and that the appellants could not have been called upon to refund amounts already refunded to them. 4. All these contentions were contradicted by the learned Government Pleader who not only referred us to the provisions of SEZ Act, KVAT Act and the Central Sales Tax Act, 1956, (CST Act, for short), but also the relevant judgments. 5. We have considered the submissions made. 6. According to us, the first issue to be considered is whether there is any force in the contention that the sale effected to an industrial unit within the SEZ is a deemed export. This question has to be answered in the light of the provisions contained in the SEZ Act itself. Section 53 of the SEZ Act provides that the Special Economic Zone sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to grant exemptions and it provides that the State Government may for the purpose of giving effect to the provisions of the Act notify policies for developers and units and take suitable steps for enactment of any law granting exemption from the state taxes, levies and duties to the developer or entrepreneur. In other words, the aforesaid statutory provisions makes it clear that insofar as the CST Act is concerned, section 26(g) provides for exemption if the goods purchased are meant for the authorized operations by the developer or entrepreneur whereas Section-50 entitles the State Government to grant exemption from the state taxes to the developer or entrepreneur. 8. Having thus understood the relevant provisions of the SEZ Act, if we turn to the Central Sales Tax Act, it can be seen that consequential provisions have been made in Section-8(6) thereof which provides that no tax shall be payable on sales in the course of inter-state trade or commerce to a dealer in a SEZ. Section 8(6) to (8) read thus: 8(6) Notwithstanding anything contained in this section, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised operations is defined in Section 2(c) of the Act as meaning operations which may be authorised under Section 4(2) and Section 15(9) of the Act. Section 4(2) and Section 15(9) speak of such operations, which are authorised by the Central Government, and in respect of which the Developer of a unit has the authorisation of the Board of Approval. Further, an overview of the provisions of the SEZ Act indicates that it is a special law enacted with the specific object of providing an internationally competitive environment for exports and there are specific provisions therein that are tailored to provide tax exemptions and other benefits to the units situated in the SEZ's. The overriding effect given to provisions of the Act is only with a view to further the objects of the Act and cannot confer on the units in the SEZ a status other than what is contemplated for the purposes of their functioning under the Act. It is against this schematic backdrop that one has to consider whether a sale from a unit in the DTA to a unit in the SEZ can be treated as an export for all purposes, including for the purposes of the CST Act. As already noted, the words export and import have a differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if such registered dealer has been authorised to establish such unit or to develop, operate and maintain such special economic Zone by the authority specified by the Central Government in this behalf. 14. Similarly, under the KVAT Act, there is a provision that grants exemption in respect of sale of goods to units in a SEZ, under certain circumstances. Section 6(7)(b) of the KVAT Act reads as follows: 6. Levy of tax on sale or purchase of goods. (7) Notwithstanding anything contained in sub-section (1), (a) **** (b) sale of any building materials, industrial inputs, plant and machinery including components, spares, tools and consumables in relation thereto to any developer or industrial unit or establishments situated in any Special Economic Zone in the State for setting up the unit or use in the manufacture of other goods shall, subject to such conditions or restrictions, as may be prescribed, be exempted from tax. 15. The aforesaid provisions seem to suggest that the legislative intention under the SEZ Act was to treat sales to units in the SEZ as taxable sales, subject to specific exemptions that were provided for, either under the CST Act or under the respective State legislat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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