M R F LIMITED Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) WHAT is familiarly styled as an appeal pending original petition which might have as well ended up with a direction to dispose of the appeal, pending before the appellate authority and further retraining the recovery proceedings in the meantime, on condition of the petitioner making payment of the amount directed to be paid, subjected to a detailed argument presumably because of the stake involved in the case.

(2.) THE main prayer in the original petition is for a direction to dispose of exhibit P7 series of appeals filed against exhibit P6 series of provisional assessments for the months of April, 1990 to December, 1990 and also exhibit P8 series of stay petitions for stay of recovery of the amount covered by exhibit P6 series of provisional assessments which was demanded by exhibit P9 notice. THE second prayer in the original petition is to restrain the respondents from taking recovery proceedings pursuant to exhibit P9 notice till final disposal of the appeal. THE third and fourth prayers in the original petition are to restrain the first respondent, viz. , Assistant Commissioner (Assessment)-I, Special Circle, Kottayam, from imposing tax on the purchase turnover of rubber in excess of 3 per cent for the years 1986-87 to 1989-90 till final decision is rendered on the appeals and other proceedings against exhibit P6 series of assessment and to restrain the first respondent from taking any further proceedings to reopen or reassess the purchase turnover of rubber used by the petitioner for the manufacture of compound rubber during the years 1982-83, 1983-84, 1984-85 and 1985-86 at more than 3 per cent.

(3.) THEREFORE, subsequent assessments were completed on that basis for the years 1982-83, 1983-84, 1984-85 and 1985-86. Those assessments have become final, for the department has not taken up the matter further in revision. While so, an explanation to exhibit P1 notification was issued by another notification dated November 2, 1990, explaining the finished rubber products for the purpose of notification to mean any goods manufactured, utilising rubber in any form as one of the raw materials and to include tread rubber but to exclude any form of rubber taxable at the point at last purchase in the State or which are subjected to processing by mixing with chemicals, gas, fumigation or any other similar process to make any compound rubber. The said notification, produced by the petitioner as exhibit P5, was deemed to have come into force on April 1, 1989, subject to the condition that taxes if any remitted by any dealer shall not be refunded. When provisional return in form No. 9 for the month of April, 1990 was submitted, the department made a departure from the earlier position and appears to have taken the view that even if rubber is used for making compound rubber inside the State, the petitioner is not entitled for concessional rate as masticated rubber produced by the company rubber is not a finished rubber product. It also took the view that the compound rubber is not a finished rubber product. Hence, by notice dated February 2, 1991, issued under section 17 read with rule 21, sub-rule (9) of the Kerala General Sales Tax Rules, the first respondent proposed to reject the return in form No. 9 claiming concessional rate of 3 per cent on the turnover of rubber purchased for the month of April, 1990. The petitioner submitted detailed reply dated March 2, 1991 to the notice issued, in which it was pointed out that the compound rubber is manufactured out of raw rubber, carbon black and chemicals and is sold to several persons as finished product. Several other manufacturing companies also, it is stated, are marketing compound rubber and, therefore, compound rubber is claimed to be a finished product. But rejecting the contention of the petitioner, provisional assessments were made denying the benefit of concession provided in exhibit P1 notice and holding that rubber compound made by mixing rubber and carbon black and transferred by the petitioner to outside States for the manufacture of tyre and tubes is not a finished product as envisaged by S. R. O. 641/1981 (exhibit P1 ). This provisional assessment for the month of April, 1990, is produced by the petitioner as exhibit P6. Similar assessments were made for the months of May to December, 1990, which are produced by the petitioner as exhibits P6 (a) to P6 (h ). All these assessments were made on March 6, 1991. Final assessment for the year 1986-87 was also made immediately thereafter on March 12, 1991. Aggrieved by the provisional assessments for the months of April to December, 1990, the petitioner filed appeals, exhibits P7, P7 (a) to P7 (h ). Along with the appeals, stay petition were also filed before the appellate authority which was marked as exhibits P8, P8 (a) to P8 (h ). When the first respondent issued notice, exhibit P9 on May 3, 1991, to recover the entire amount due for the months of April, 1990 to December, 1990, on the basis of the provisional assessments aforementioned evidenced by exhibit P6 series, demanding an amount of Rs. 1,06,10,065 the petitioner filed this petition with the prayers already mentioned. Though final assessment was similarly made on March 12, 1991, against which also appeal was filed, the same is not subject-matter of this writ petition.