JOJO FROZEN FOODS LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) A question of interpretation of S. R. O. No. 1728 of 1993 as amended by S. R. O. No. 429 of 1995 and S. R. O. No. 585 of 1996 arises in this case. The year in question is the assessment year 1995-96. The assessee is a small-scale industrial unit. According to the assessee, as per S. R. O. No. 429 of 1995, small-scale industrial unit whose turnover does not exceed Rs. 50,00,000 were entitled to deduction of tax. Subsequently, by S. R. O. No. 585 of 1996, an explanation was added wherein it is stated that where the turnover of the unit exceeds the limit of Rs. 50,00,000 during the first year in which the turnover crosses the limit higher rate will be applied only on the turnover above Rs. 50,00,000. This explanation shall be deemed to have come into force with effect from April 1, 1995. The assessee contended that for the year 1995-96, the assessee is entitled to the benefit of the explanation. But this was rejected by the authorities. Hence, this revision.

(2.) S. R. O. No. 1728 of 1993 was issued by the Government on November 4, 1993. By this notification, deduction in tax was allowed for certain goods. Schedule IV of the above S. R. O. deals with certain items. Item 8 is as follows : "small-scale industrial units whose total turnover does not exceed Rs. 50 lakhs is entitled to deduction on the sale of goods manufactured by them within the State and the rate of tax is 4 per cent". Even though S. R. O. No. 1728 of 1993 came into force on November 4, 1993, item No. 8 was introduced only by S. R. O. No. 429 of 1995 with effect from April 1, 1995. The small-scale industrial units whose total turnover does not exceed Rs. 50 lakhs, the rate of tax for the goods manufactured by them within the State was reduced to 4 per cent. An explanation was added to this S. R. O. The explanation states that where turnover exceeds the limit of Rs. 50 lakhs during the first year in which the turnover crosses the limit, higher rate will be applied only on the turnover above Rs. 50 lakhs. This explanation shall be deemed to be come into force with effect from April 1, 1995. The argument of the learned counsel for the assessee is that increase in crossing of Rs. 50 lakhs is to be taken into account with regard to the assessment year which comes after the explanation was added, i. e. , after April 1, 1995. On the other hand, learned counsel for the Revenue contended that as a matter of fact, the turnover of the assessee exceeded Rs. 50 lakhs during the previous year 1994-95 and hence, it is not entitled to the benefit of the explanation.