STATE OF KERALA Vs. M.R.F. LIMITED

JUDGEMENT

(1.) These revisions under Sec. 41 of the Kerala General Sales Tax Act, 1963 and original petitions stand remitted by the Hon'ble Supreme Court of India as per the remand order dated 28.4.2011 in Civil Appeal No. 3758 of 2011 and connections. The basic substratum of these litigations relates to the interpretation and construction of SRO. No. 641/81 and SRO. No. 1516/90 issued by the Government of Kerala in exercise of powers conferred under Sec. 10 of the KGST Act. As per SRO. No. 641/81 which is deemed to have come into force on 1.4.1981, reduced rate of tax was prescribed on the purchase of rubber by manufacturers of finished rubber projects within the State for use of such rubber by such manufacturers in the manufacture of finished rubber products within the State. Through SRO. No. 1516/90, the term 'finished rubber products' occurring in SRO. No. 641/81 was sought to be explained by the introduction of an Explanation which is deemed to have come into force with effect from 1.4.1989 subject to the condition that taxes if any remitted by any dealer shall not be refunded. That Explanation is, inter alia, to the effect that for the purpose of SRO. No. 641/81 'finished rubber product' shall not include any form of rubber which are subjected to processing by mixing with chemicals, gas, fumigation or any other similar process to make any 'compound of rubber'.

(2.) While completing the assessments for the relevant years, the assessing authority denied the claim of concessional rate of tax on the purchase turnover of raw rubber used in the manufacture of rubber compound on the ground that the goods manufactured by the assessee is compound of rubber which is not a finished product. The first appellate authority upheld that view of the assessing authority. The Kerala Sales Tax Appellate Tribunal considered the further appeals noting, in our view, correctly, that the main issue agitated by the assessee in all the appeals is the denial of claim of concessional rate of tax on the purchase turnover of raw rubber used in the manufacture of rubber compound. The Tribunal held that the assessee is entitled to concessional rate of sales tax on the purchase of rubber used in the production of compound rubber. This Court, through Sales Tax Revision No. 213 of 2006 and connections and also two original petitions tagged along therewith, held against the assessee through judgment dated 18.12.2008 reversing the decision of the Tribunal and restoring the assessments confirmed in the first appeals; however, without answering the grounds raised in the original petitions. This Court turned down the plea of the assessee that the rubber compound or compound of rubber made by the assessee is not "any compound of rubber" referred to in the notifications. Contextually, it is apposite to quote the relevant portion of the judgment dated 18.12.2008 in STRV. No. 213 of 2006 and connections. It reads as follows:

(3.) The assessee carried the aforesaid judgment dated 18.12.2008 to the Hon'ble Supreme Court of India seeking Special Leave to Appeal. Leave was granted and those appeals were decided through order dated 28.4.2011. The said order on Civil Appeal Appeal No. 3758 of 2011 and connections reads as follows: