STATE OF KERALA Vs. M VELAYUDHAN

JUDGEMENT

(1.) THIS appeal is by the 1st defendant State Government against whom a decree has been made restraining it from taking any proceedings to recover the tax assessed on the plaintiff under the General Sales Tax Act, 1125 (for short, the Act) on the purchase of copra made by him from 18th November, 1952, to 31st March, 1953, the turnover in question amounting to Rs. 42,449-11-9. For the rest, the plaintiff's suit has been dismissed and the plaintiff has not chosen to appeal.

(2.) SECTION 6 of the Act runs as follows :- "6. (1) Power of Government to notify exemption and reduction of tax. - Government may, by notification in the Gazette, make an exemption, or reduction in rate, in respect of any tax payable under this Act - (i) on the sale of any specified class of goods at all points or at any specified point or points in the series of sales by successive dealers; or (ii) by any specified class of persons, in regard to the whole or any part of their turnover. (2) Any exemption from tax, or reduction in the rate of tax notified under sub-section (1) - (a) may extend to the whole of the State or to any specified area or areas therein; (b) may be subject to such restrictions and conditions as may be specified in the notification, including conditions as to licences and licence fees."

(3.) SINCE the duration of the licence has no bearing whatsoever on the duration of the exemption, the question whether the State Government could or could not cancel the licence before the expiry of its term does not arise. In fact the State Government did not cancel the licence. It was not the licence that granted the exemption, but the notification of the 15th June, 1950. The taking out of the licence was only a condition for earning the exemption, and, as I have already said more than once, the fact that the licence continued for a period beyond the withdrawal of the exemption cannot have the effect of continuing the exemption.