M V SAJINI Vs. STATE OF KERALA

JUDGEMENT

(1.) Chicken has been on the tax table of this court for quite some time for the main reason that the State had not been finding it easy to prepare and promote Kerala chicken. The State intends to support and promote poultry farmers in Kerala; but is unable to reach at them and that is the unfortunate story unfolded in these cases. To quote from the counter affidavit of the respondents It is respectfully submitted that from the year 1967-68 onwards the intention of the Government is to give special incentive to farmers in Kerala. Each time when notification is issued with the above intention clever dealers outside Kerala could take advantage of the notification by adopting skilful means. But the Government never intended to give any such benefit to outside Kerala people, because the clear intention ever since 1967 was to encourage poultry industry in Kerala. The last of such attempts to encourage poultry farmers in Kerala has given rise to present litigation. The impugned notification is SRO No. 7/2002 dated 4-1-2002. Ext. P4 in O.P.No 2371 of 2002.

(2.) Section 10 of the Kerala General Sales Tax Act provides for exemptions. It reads as follows:-

(3.) Arguments were mainly advanced by senior, counsel Sri. C. Natarajan for the petitioners and the Special Government pleader (Taxes) Sri. Raju Joseph. Sri. Harisankar V. Menon, who appears for the additional fourth and fifth respondents, sails along with the State. I shall deal with the challenge on the retrospective operation first. That issue is no more res integra, concluded in favour of the petitioners by two direct decisions on the point: (1) M.M.Nagalingandar v. State of Kerala, reported in 91 STC 61; and (2) Deputy Commissioner (Law) v. MRF Ltd. Reported in 109 STC 306. Both decisions are on the interpretation of Section 10(3). It is held that power is given to the Government under Section 10(1) to issue any notification granting exemption or reduction in rate either prospectively or retrospectively; whereas under sub-section (3), coming to the cancellation or variation of such notification no express power is conferred for retrospectively concealing or varying a notification already issued under Section 10(1). The learned Special Government Pleader vigorously contended that the impugned notification is not one either canceling or varying any benefit already granted; but it is only a clarification as to what exactly was intended by the Government by the earlier notification in the matter of exemption. Hence it is contended that being a clarificatory amendment, it should be deemed to have been there with effect from the date of the original order namely 1-4-2000. I am afraid the contention cannot be accepted. Only in a case where an amending Act is purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit, a clarificatory amendment can be made with retrospective effect. May be the State intended such a purpose of restricting the benefit of sales-tax exemption to those who own a farm in their own land in Kerala. But that meaning was not even implicitly conveyed in the language of the notification. The pre-amended notification only contemplated own farm in Kerala to qualify for exemption. It needs no explanation to understand that for owing a farm one need not have own land. These are two entirely different concepts. Without owning any land at all one can own and run a farm, which is an activity which only needs land and not own land. In other words owner of land where a poultry farm is conducted can be one person and another legal person is entitled and capable of owning a poultry farm in the same land. So long as a restrictive meaning for own land was not there in the pre-amended notification it cannot be said that the poultry farms in Kerala, even if they are run on leased, mortgaged or licensed land, do not qualify for exemption. In that view of the matter, the Commissioner is perfectly justified in issuing Ext.P3 clarification dated 27-9-2001 to the effect that as per the terms of the per-amended notification a poultry farm run on leased, mortgaged or licensed land within the State of Kerala is entitled for sales-tax exemption. The reference in the per-amended notification is only to the activity within the State. That the activity should be in own land is a new concept as such introduced by the amended notification. It is neither a clarification not an explanation of the earlier notification. Therefore, the impugned notification cannot have any retrospective operation at all. If it is otherwise valid.