M R F LIMITED Vs. ASST COMMISSIONER

JUDGEMENT

(1.) Original petition was preferred by the appellant herein seeking a writ of certiorari to quash exhibit P9 notice and P13 letter and also for a writ of mandamus directing the respondents not to initiate any proceedings against the petitioner contrary to or inconsistent with exhibits P4 and P5 and also for other consequential reliefs.

(2.) Exhibit P9 is a notice dated December 19, 2001, issued under Section 45A of the Kerala General Sales Tax Act, 1963, in short, "the KGST Act", proposing a total penalty of Rs. 49,39,45,410 stating that the assessee had failed to pay tax on the purchase turnover for the years 1997-98, 1998-99, 1999-2000, 2000-01 and 2001-02 on the ground that they were exempted turnover. S.R.O. No. 1729/93, it was pointed out, had allowed exemption only on the purchase value of rubber used and no exemption was allowed on the turnover of any processing of one form of goods into another form of the same goods by mixing with chemicals or gas fumigation or other processes as the mere conversion would not come under the term "manufacture" after January 15, 1998 since S.R.O. No. 1729/93 was amended by S.R.O. No. 39 of 1998 dated January 15, 1998. Petitioner was informed that the company had failed to pay tax on the purchase turnover of rubber from January 15, 1997 to March 31, 1998, 1998-99, 1999-2000, 2001-2002 and up to 11/2001. Petitioner was informed that non-payment of tax is in clear violation of the KGST Act and Rules and the company has committed an offence punishable under Clause (g) of Sub-section (1) of Section 45A of the KGST Act and a penalty of Rs. 49,39,45,410 was proposed to be imposed. Exhibit P12 objection was filed by the company questioning the validity of the notice as well as the jurisdiction of the officer.

(3.) The first respondent rejected exhibit P12, vide by exhibit P13 order dated January 17, 2002 and directed the petitioner to file objection, if any, on or before January 31, 2002, failing which, it was pointed out, the proposal would be given effect to. Petitioner then filed the present writ petition questioning the very basis on which exhibit P9 was issued. Senior Counsel wanted this Court not only to examine the validity of exhibit P9 but also the larger question as to whether the company is entitled to get the benefit of S.R.O. No. 1729/93. Counsel referred to exhibit P4 eligibility certificate issued by the Director of Industries and Commerce on November 10, 1997. Exhibit P5 is a copy of the order dated June 30, 1998, passed by the Board of Revenue (Taxes) granting sales tax exemption in respect of compound rubber. Relying on exhibits P4 and P5, counsel submitted, exhibits P9 and P13 have no legs to stand and are liable to be quashed. The question that is germane for consideration in this case is whether the petitioner is entitled to get the benefit of exhibit P5 order of the Board of Revenue purported to have been issued on the basis of S.R.O. No. 1729/93 and also whether exhibit P5 is in conformity with those notifications.