ALUMINIUM COMPANY Vs. STATE OF KERALA

JUDGEMENT

(1.) THE matter arises under the Kerala General Sales Tax Act, 1963 (for short, "the Act" ). THE assessee is engaged in the fabrication work of aluminium windows, doors and other items. THE assessment years concerned are 1989-90, 1990-91 and 1991-92. THE assessee had opted for payment of tax at the compounded rate as provided under section 7 (7), (7a) of the Act. That apart, under the provisions of section 5 (1) (iv) of the Act as it stood up to 1992 the tax on works contract in respect of the contracts other than civil contracts was 5 per cent. THE assessing authority while processing the accounts found that the assessee had issued form 18 declaration and purchased raw materials at the concessional rates provided under section 5 (3) of the Act. THE assessing authority on that basis issued pre-assessment notice wherein he had proposed to disallow the claim at the concessional rate and to levy the differential rate of tax as provided under section 5 (3) (ii) of the Act. THE assessee filed objection to the above. After considering the same the assessing authority issued a revised pre-assessment notice accepting the claim under section 5 (3) but proposed to reject the claim of works contract and to tax the entire turnover at the scheduled rate. THE assessee filed objection to the said pre-assessment notice also. Rejecting the said objection the assessing authority brought to tax the entire turnover which was the subject-matter of the works contract to tax at the scheduled rate. Here, it must be noted that the assessing authority had accepted the claim of the assessee made under section 5 (3) of the Act. Being aggrieved by the assessment order rejecting the claim of works contract the assessee filed separate appeals before the Appellate Assistant Commissioner (Commercial Taxes), Ernakulam, who by a common order dated February 1, 1999 (annexure F) dismissed the appeals. In second appeal filed by the assessee against the first appellate authority's order the Tribunal allowed the claim of the assessee based on works contract and held that the tax must be levied on the contract receipts only at the rate of 5 per cent. THE Tribunal also held that the proposal in the original pre-assessment notice to levy differential rate of tax on the turnover in respect of which the assessee issued form 18 declaration is in order. THE Tribunal had remitted the matter to the assessing authority with direction to complete the assessment for all the 3 years as proposed in the original pre-assessment notices. It is against this common order of the Tribunal the assessee has filed these revisions.

(2.) IN these revisions, the assessee had raised the following questions of law : " 1. Whether, on the facts and circumstances of the case, the Appellate Tribunal is justified in confirming the rejection of the claim of concessional rate for purchase of raw material by the SSI unit for use in works contract ? 2 Whether on the facts and circumstances of the case and having allowed the concessional rate in the assessment order itself is the Appellate Tribunal justified in disallowing the claim which has been granted by the assessing authority. Is not the direction without jurisdiction ?"

(3.) IN these circumstances, without going into the propriety of the direction issued by the Tribunal we vacated the finding entered by the Tribunal in regard to the liability under section 5 (3) (ii) of the Act. Since there is no revision against the finding of the Tribunal regarding works contract it is unnecessary for us to go into the correctness of the order of the Tribunal on that aspect. These 3 revisions are allowed to the above extent. Revisions allowed. .