RELIANCE GENERATORS PVT LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) Petitioner is engaged in the business of supplying, installing, testing and commissioning of Diesel Generating Sets. Petitioner is registered as a non-resident dealer with the Sales Tax Officer, Works Contract, Thiruvananthapuram. Petitioner has filed returns under the Kerala General Sales Tax Act and has been assessed accordingly. Petitioner is aggrieved by the notification SRO No. 949/2002 by which Government have decided to withdraw the exemption granted to various items including generator in respect of tax payable under Section 3 of the Kerala Tax on Entry of Goods into Local Areas Act, 1994 by dealers who are registered under the Kerala General Sales Tax Act, 1963 on which they are paying sales tax under Section 5 of the Kerala General Sales Tax Act, 1963. Notification SRO No. 949/02 according to the petitioner, is unconstitutional, discriminatory and violative of Articles 14, 19(1)(g), 301, 303 and 304 of the Constitution of India.

(2.) Petitioner has undertaken various contracts in the State of Kerala for commissioning of diesel generating sets as per the specifications prescribed by Bharat Sanchar Nigam Ltd. and other companies. Petitioner brings diesel generating sets and its components from outside the State of Kerala and carry to the work site and perform their contract. The Kerala Tax on Entry of Goods into Local Areas Act was enacted to provide for the levy of tax on the entry of goods into local areas for consumption, use or sale therein. Section 2(d) of the Act states that entry of goods into local area means entry of goods into local area from any place outside the State for use or sale therein. Section 2(ee) says that goods means the goods mentioned in the Schedule. Section 3 is levying section which says that tax shall be levied and collected on the entry of any goods into any local area for consumption, use or sale therein and the tax on such goods shall be on such rate or rates as may be fixed by the Government by notification on the purchase value of the goods but not exceeding the rates specified for the goods in the first Schedule to the KGST Act. Section 4 says that where an importer of any goods liable to pay tax under the Act, being a dealer in such goods becomes liable to pay tax under the KGST Act as a result of the sale of such goods, then amount of tax payable under the KGST Act shall be reduced by the amount of tax paid under the Entry Tax Act. The Schedule annexed to the Act enumerated the goods liable to entry tax. Generator was included by SRO No. 296/98 as entry 19.

(3.) Government had in exercise of the powers conferred by Section 12 of the Kerala Tax on Entry of Goods into Local Areas Act. 1994 and in supersession of the Notification G.O.(P) No. 155/94/TD dated 25th November, 1994 as subsequently amended, in public interest exempted tax payable under Section 3 of the Act by dealers who are registered under the Kerala General Sales Tax Act, 1963 on the import of goods specified in the Schedule to the Act, in respect of which they pay sales tax under Section 5 of the Kerala General Sales Tax Act. Section 5 of the KGST Act provides for the imposition of sales tax on the sale of goods under different circumstances, provided under different Schedules to the KGST Act. Section 10 of the KGST Act enables the Government to grant exemption and the concessional rate of tax. Government in exercise of the said powers issued SRO No. 1091/99 by which tax payable for the generator is at the rate of 4%. Under SRO No. 590 of 1996 petitioner would not be liable to pay entry tax and petitioner would be paying only sales tax under the KGST Act, tax at 4%. SRO No. 590/96 has treated the importer and the local dealer equally which is perfectly in line with Articles 14, 19(1)(g), 301, 303 and 304 of the Constitution of India.