V. G. & CO Vs. STATE OF KERALA

JUDGEMENT

(1.) PETITIONERS in O.P. No. 6424 of 1991 (P.P. Sons v. State of Kerala [1992] 86 STC 563 (Ker)) are before us. They challenge the common judgment disposing of the writ petition filed by them and also the original petition filed by some others. S.R.O. No. 432 of 1991 issued by the Government under section 10 of the Kerala General Sales Tax Act, 1963 granting exemption in respect of tax payable under the Kerala General Sales Tax Act on the sale or purchase as the case may be of the goods specified in Schedule I appended to the S.R.O. and the tax payable by persons or units specified in Schedule II attached thereto with regard to their turnover on the sale or purchase as the case may be of goods mentioned against them in the said Schedule, is under challenge. The case of the appellants is that this S.R.O. is hit by the prohibition contained in article 304(a) of the Constitution of India. Dilating on this aspect the learned counsel for the appellants argued that this S.R.O. would impede the free -flow of trade/commerce guaranteed under article 301 of the Constitution of India.

(2.) SO far as item 6 in Schedule I of the S.R.O. is concerned : In view of the fact that the State has conceded that cattle feed is not manufactured by the Kerala Live Stock Development Board Ltd., it is unnecessary to go into the question as to whether the tax concession pertaining to the said transaction is liable to be declared invalid. Coming to the main question as to whether the exemption given to the milk producers co -operative societies on the sale of cattle feed, etc., is hit by the prohibition contained in article 304, it has to be remembered in this connection that it is not the case of the appellants that the general rate of tax applicable to the goods locally made and of those imported from other States is not the same, but on the other hand it is clear from the pleadings that there is no difference in the rates applicable to the goods locally made and those imported from other States. If there had been a difference in the rates of tax applicable to the locally manufactured goods and those imported from other States perhaps the argument that it is discriminatory may hold water. But the exemption admitted in respect of tax payable by an assessee can be declared valid only if it is found that the admission of the exemption is made in public interest. A reference in this connection to the following observation made by the Supreme Court in Video Electronics Pvt. Ltd. v. State of Punjab [1990] 77 STC 82 is profitable : "Where the general rate applicable to the goods locally made and on those imported from other States is the same, nothing more, normally and generally, is to be shown by the State to dispel the argument of discrimination under article 304(a), even though the resultant tax amount on imported goods may be different."