POONAM STONE PROCESSING INDUSTRIES Vs. DEPUTY COMMISSIONER OF COMMERCIAL TAXES ADMN GULBARGA DIVISION GULBARGA

JUDGEMENT

(1.) PETITIONERS have set up a small-scale industrial unit in tiny sector for the purpose of stone polishing, high polishing and stone cutting. A provisional registration certificate was issued on September 11, 1987. S. S. I. certificate was obtained on February 18, 1988. Petitioners claim the benefit of a notification dated March 31, 1983 issued under section 8-A (1) (b) of the Karnataka Sales Tax Act, 1957 ("the Act", for short ). Under the said notification the Government exempted the tax payable under the Act on the turnover of goods manufactured in Karnataka and sold by all tiny sector industrial units for a period of 5 years from the respective date of commencement of the commercial production, subject to certain restrictions and conditions, with which we are not concerned here. However, condition (viii) states that industry should not be one specified in the appendix to the notification. Appendix does not refer to the industry of the petitioner. In the year 1985 the Deputy Commissioner of Commercial Taxes issued a clarification, obviously on the basis of a letter of the Commissioner stating that the petitioners were eligible for the exemption as per the said notification of March 31, 1983. In the appendix thirteen industries are mentioned. The said letter nowhere refers to the particular activity carried on by the petitioners. Subsequently on July 4, 1987, the Commissioner of Commercial Taxes issued a circular as follows :

(2.) IN view of the above clarification, assessment orders made were sought to be revised under section 21 (4) of the Act. Similarly the assessing authority also made an endorsement that since polished Shahabad stones are not a commercially different commodity from the unpolished one and no new commodity is obtained, polishing of the stones does not amount to manufacture. Consequently concession available to the petitioners was held as not available to the petitioners. The petitioners were asked to pay monthly tax on the turnover of such polished stones.

(3.) MR . Ramabhadran, learned counsel for the petitioners, pointed out that the industries of the petitioners were not found in the appendix and that itself indicates that the industries of the petitioners are entitled to the benefit of the notification. Any industry referred in the appendix automatically gets excluded from the purview of the beneficial treatment under the exemption notification. But that does not mean that every industry not referred in the appendix is entitled to avail of the benefit. Any industry seeking the benefit should satisfy other requirements referred in the notification. The exemption is granted in respect of the tax payable on the turnover of the goods manufactured in Karnataka, etc. If the goods are not manufactured and then sold the benefit of the notification is not available.