STATE OF KERALA Vs. SURABHI STEELS P LTD

JUDGEMENT

(1.) Whether ingot moulds imported by the writ petitioners intended to be used as raw materials at a later point of time would fall within the ambit of SRO.No. 263/98 is the question that has come up for consideration in these cases.

(2.) Original Petitions were filed for a declaration that petitioners are entitled to the benefit of SRO. 263/98 as amended by SRO 702 of 1998 in respect of goods mentioned in the said notification purchased by them from outside the State and used in the manufacture of other goods by them within the State. Petitioners have also sought for a declaration that the inclusion of item No. 9 (Iron and Steel) in the Schedule to the Kerala Tax on Entry of Goods into Local Areas Act 1997 with effect from 14-1-97 is unconstitutional and arbitrary. Learned single Judge repelled the challenge against the provisions of the Act. The only question to be considered in these cases is whether petitioners are entitled to get the benefit of the exemption notification. Notification is extracted below for easy reference.

(3.) The Government of Kerala in exercise of powers conferred by Section 12 of the Kerala Tax on Entry of goods into Local Areas Act, 1994 have decided to exempt the manufacturers who import cement or iron and steel for use as raw material in the manufacture of other finished products which are liable to Sales Tax either under the Kerala General Sales Tax Act, 1963 or under the Central Sales Tax Act, 1956. The notification and the explanatory note would positively show that the exemption would be available only to those importers of cement or iron and steel imported by them for use as raw materials in the manufacture of other goods. Petitioners admittedly had imported ingot moulds for use as consumable. Ingot moulds are used by the petitioners for pouring liquid metal into them to get the required size and shape of M.S. Ingots. After the liquid metal is solidified, the ingots are removed. Even in the accounts of the petitioners, ingot moulds are treated as consumable and not as raw material.