CHOICE PLYWOOD INDUSTRIES Vs. STATE OF KERALA

JUDGEMENT

(1.) Whether the petitioners are entitled to exemption from purchase tax under Section 5A of the Kerala General Sales Tax Act for the manufacture of block board as per SRO 403/94 read with the clarificatory letters dated 8.6.2002 and 29.6.2002 with effect from 1.1.1994 is the question that is posed for consideration in these cases.

(2.) Petitioners' earlier claim for exemption under SRO 419/90 from the levy of sales tax under Section 5A on the turnover of timber purchased from unregistered dealers in the State and used for the manufacture of block board and block board frames was rejected by the Sales Tax authorities and the Tribunals in the State. This was the subject matter of decision of the Supreme Court in State of Kerala v. Vattukulam Chemical Industries wherein it was held that SRO 419/90 is applicable only in respect of goods taxable at the last purchase point in the State. Several cases were decided on the basis of the above decision of the Apex Court. Certain cases were however pending before the Appellate Authorities and Appellate Tribunals and in those cases assessees took up a new contention that even if those items are taxable under Section 5A they are entitled to get exemption as per SRO 403/94 and also on the basis of letter No. 20896/B1/2002/TD dated 8.6.2002 issued by the Secretary to Government, Taxes (B) Department to the Commissioner of Commercial Taxes, Thiruvananthapuram followed by communication No. 30780/01/CT dated 29.06.2002 from the Commissioner of Commercial Taxes, Thiruvananthapuram to Deputy Commissioner, Kannur.

(3.) Contention was raised by the assessees before the Tribunals and various other forums that the above mentioned two letters are clarificatory in nature. Consequently, benefit of SRO 403/94 would be available to the assessees who are using softwood for the manufacture of block boards. On the above plea conflicting views have been expressed by some of the Benches of the Salestax Tribunals; so also Appellate Assistant Commissioners placing reliance on the letter of the Government dated 8.6.2002 and the clarificatory letter dated 29.6.2002 of the Commissioner. So far as these revision petitions are concerned a uniform view has been taken by the Tribunals that those letters are not binding on the Tribunals and hence rejected the plea of exemption under SRO 403/94. Aggrieved by the same, petitioners have come up in these revision petitions.