STATE OF KERALA Vs. MADRAS FERTILIZERS LTD., COCHIN

JUDGEMENT

(1.) These writ appeals are filed by the State of Kerala and its officers impugning the judgments of the learned Single Judge. Some of the writ petitions were filed by the companies manufacturing as also importing fertilizers and some of the writ petitions were filed by Petroleum Companies which are supplying Liquefied Petroleum Gas to the domestic consumers and also Kerosene to the Public Distributing System. The question raised was whether the subsidy received by the companies would form part of the turnover for the purpose of levy of tax under the Kerala Value Added Tax Act. In the judgments under appeal, following the judgment in the case of Madras Fertilizers Limited Vs. Asst. Commissioner (Assessment) and Another, 1994 (95) STC 134, the learned Single Judge allowed the writ petitions. It is these judgments that are challenged by the State.

(2.) Insofar as O. T. R. 178/15 is concerned, this revision is filed by the State against the order passed by the Tribunal in TA. (VAT) No. 1504/11 filed by the assessee. That appeal was allowed by the Tribunal following the judgment of the Apex Court in Neyveli Lignite Corporation Ltd. Vs. Commercial Tax Officer, Cuddalore, 2001 KHC 1517. It is this order of the Tribunal, which is challenged.

(3.) We heard the Government Pleader appearing for the State and the respective counsel appearing for the respondent assessees. The short question to be considered is whether the view taken by the learned Single Judge that subsidy received by the respondent assessees from the Government of India on the basis of the Scheme formulated by the Government would form part of the taxable turnover of the assessees. Insofar as this question is concerned, the very same issue was considered by this Court in the case of Madras Fertilisers, in the context of the provisions contained in the Kerala General Sales Tax Act and it was held that subsidy would not form part of turnover. That judgment of the learned Single Judge was affirmed by a Division Bench of this Court in Asst. Commissioner of Sales Tax (Assessment), Special Circle II, Ernakulam and others Vs. Krishak Bharathi Co - op. Ltd., 1995 (99) STC 17. The Division Bench judgment was affirmed by the Apex Court in its judgment in Neyveli Lignite Corporation Ltd. Vs. Commercial Tax Officer, Cuddalore, 2001 KHC 1517. Therefore, the issue that subsidy received by the assessees, whose selling price is regulated by the provisions of the Fertiliser (Control) Order of the Government of India, cannot be a matter of debate.