ALWAYE SUGAR AGENCY Vs. STATE OF KERALA

JUDGEMENT

(1.) THE matter arises under the Kerala General Sales Tax Act, 1963 (for short, "the Act" ). Assessee is the revision petitioner. State is the respondent. Assessment year is 1993-94. Petitioner is a dealer in Rasna products, furniture and rubber seal. THE assessment of the petitioner for the year 1993-94 was completed as per order dated December 28, 1995 (annexure I ). In the said assessment the assessing authority had made an addition of 5 per cent of the turnover of furniture for certain defects. THE assessing authority had also denied exemption in respect of the sales turnover of furniture sold to Cochin Export Processing Zone. THE assessing authority had also denied deduction of the turnover relating to sales return. Being aggrieved by the assessment, the petitioner filed appeal before the Additional Appellate Assistant Commissioner of Agricultural Income-tax and Sales Tax I, Ernakulam, who by its order dated February 3, 1997 (annexure II), dismissed the appeal. In the Second Appeal filed by the assessee, the Tribunal reduced the addition from Rs. 61,715 to Rs. 31,200. However, the claim for exemption, based on a Notification S. R. O. No. 1177/87 and in respect of sales return, were rejected.

(2.) SRI. C. K. Thanu Pillai, learned counsel appearing for the petitioner submitted before us that the addition of Rs. 31,200 sustained by the Tribunal towards alleged irregularities is unsustainable, in that the assessee did not purchase ten bundles of steel furniture valued Rs. 15,600 transported in a passenger bus from Bangalore to Ernakulam and detained by the Intelligence Officer, Agricultural Income-tax and Sales Tax, Palghat on September 13, 1993 at Chandranagar, Palghat as alleged. The counsel submitted that when the assessee had denied the said transaction, it was for the officers of the Department to proceed against the consignor and to make the assessment on him. The counsel in support of the said contention, has relied on section 30-B (4) of the Act and rule 57 of the Kerala General Sales Tax Rules, 1963, and circular No. 19/88 (7) (iv ). He has also relied on a decision of this Court in M. T. James v. Agricultural Income-tax and Sales Tax Officer reported in [2003] 129 STC 338. The counsel also submitted that the authorities under the Act were not justified in denying the exemption claimed under the Notification S. R. O. No. 1177/87 (S. R. O. No. 1727/93 Schedule VI, Sl. No. 4 ). Counsel submitted as per Sl. No. 4 of Schedule VI to the said notification, exemption in respect of tax payable under the Act is available to the dealers on their turnover of sale of goods mentioned in column (2) of Schedule VI to Industrial Undertakings/manufacturers mentioned therein and that column No. 2 specifies industrial inputs, plant and machinery in relation thereto to industrial undertakings in Cochin Export Processing Zone. Counsel submits that the assessee had obtained and produced a certificate in the form in the Annexure II from the purchaser also. The counsel also submits that though furniture will not fall under "industrial inputs", it falls under "plant" and therefore the exemption claimed should have been allowed. The counsel also brought to our notice a decision in Scientific Engineering House P. Ltd. v. Commissioner of Income-tax, Andhra Pradesh [1986] 157 ITR 86 (SC); AIR 1986 SC 338 (paragraph 11) at page 343 which, according to him gives wide meaning to the expression "plant". Counsel further submitted that though the Notification S. R. O. No. 1727/93 was brought into force only from January 1, 1994, the Notification S. R. O. No. 1177/1987 under which the exemption was confined to industrial outputs only was modified by S. R. O. No. 1515/1998, which also used the expression in terms of items No. 4 of Schedule VI to Notification S. R. O. No. 1727/1993. However, the counsel has not placed before us the said notification. The counsel also submitted that the authorities and the Tribunal did not consider the case for deduction of the sales return in respect of the sale returns.

(3.) THE tax revision case is disposed of in the manner as indicated above. Petition disposed of accordingly. .