C A CHACKO Vs. STATE OF KERALA

JUDGEMENT

(1.) Petitioner is the proprietor of a small-scale industrial unit by name M/s. Orjay Enterprises, Hospital Road, Kollam. It carries on business in manufacture of ready-made garments and its sale. The assessments of the petitioner for the years 1995-96 and 1996-97 were originally completed under the Kerala General Sales Tax Act, 1963 (for short, "the Act") as per orders (exhibits P1 and P2). Exemption was granted in respect of ready-made garments manufactured by the petitioner's unit for the said two years. However, the said assessments were reopened under Section 19 of the Act by issuing notices dated October 30, 2000 (exhibits P3 and P4). Petitioner filed objections (exhibit P5). The assessing authority passed reassessment orders dated November 16, 2000 and November 6, 2000 (exhibits P6 and P7 respectively) in which the exemption already granted to the petitioner's unit was taken away. Petitioner had challenged exhibits P6 and P7 orders in this writ petition.

(2.) Shri C.K. Thanu Pillai, learned Counsel appearing for the petitioner, submits that the petitioner's unit is entitled to get exemption from payment of sales tax on its turnover by virtue of Notification S.R.O. No. 1727/1993 under Schedule V, item No. 4 and that the assessing authority has erroneously rejected the said claim. Counsel took me to the notification, particularly Schedule V, item No. 4 and submits that the petitioner's unit is entitled to get exemption from payment of sales tax under the Act up to a turnover of Rs. 10 lakhs and in cases where the turnover exceeding Rs. 10 lakhs, exemption to the extent of Rs. 10 lakhs and tax has to be paid on the balance amount. Counsel submits that this is the position with reference to the notification in respect of all the years in which the turnover exceeds Rs. 10 lakhs. Counsel relies on the decision in A.V. Fernandez v. State of Kerala , in support.

(3.) Learned Government Pleader, appearing for the respondents, on the other hand, submits that under the Notification S.R.O. No. 1727/1993, Schedule V, item No. 4, exemption is available only if the manufacturer's total turnover does not exceed Rs. 10 lakhs in a year and that the exemption to the tune of Rs. 10 lakhs available only in the first year of crossing the said limit. The Government Pleader submits that condition (ii) in item No. 4 of Schedule V has stated so. Special Government Pleader accordingly submitted that the assessing authority was perfectly justified in passing the revised order under Section 19 of the Act denying the benefit of exemption already granted.