MADRAS FERTILISERS LIMITED Vs. ASSISTANT COMMISSIONER ASSESSMENT SPECIAL CIRCLE II AGRL INCOME TAX AND SALES TAX DEPT ERNAKULAM

JUDGEMENT

(1.) THE challenge in this batch of seven writ petitions is to the inclusion of the fertiliser subsidy received by the petitioners in their taxable turnover of fertilisers under the Kerala General Sales Tax Act, 1963 ("the KGST Act", for brevity ). THE petitioner in O. P. Nos. 14991, 15020 and 15021 of 1992 and 6743 and 6744 of 1993 is the same, namely, the madras Fertilisers Limited, while the petitioner in O. P. No. 16931 of 1992 is m/s. Krishak Bharathy Co-operative Limited, a Government of India enterprise o. P. No. 3430 of 1994 is by the Rashtriya Chemicals and Fertilisers Ltd. , a government of India undertaking who, it is said, had fought an earlier bout of litigation in the Andhra Pradesh High Court on the same point, and won. O. P. Nos. 14991, 15020 and 15021 of 1992 challenge the revised orders of assessment for the year 1987-88, 1988-89 and 1989-90 respectively, after the original assessments were reopened to include the fertiliser subsidy as part of the taxable turnover, while the other two writ petitions filed by the same assessee, the Madras Fertilisers Ltd. , challenge the original orders of assessment for the years 1990-91 and 1991-92. In O. P. No. 16931 of 1992, exhibits P1 and P2 are revised assessments for the years 1988-89 and 1989-90 while exhibit P3 is the original assessment for 1990-91. In O. P. No. 3430 of 1994, the challenge is to the original orders of assessment, exhibits P1, P4 and P7 for the years 1988-89, 1989-90 and 1990-91.

(2.) I shall state the facts in O. P. No. 14991 of 1992 which is typical of the controversy in all the cases.

(3.) THE petitioners objected to the inclusion of the amount in their taxable turnover pointing out, inter alia, that the Andhra pradesh High Court had decided that the amount received, which was subsidy, was not taxable. But the objections did not find favour with the assessing authority who completed the assessments levying tax on the amount of subsidy as well. Petitioners challenge the assessments on the ground that the amount of subsidy cannot form part of their taxable turnover.