GOEL FOOTWEAR HOUSE Vs. STATE OF KERALA

JUDGEMENT

(1.) THE petitioner-firm is a registered dealer under the provisions of the Kerala General Sales tax Act, 1963 (for short, 'the act) on the file of the second respondent. . Sales tax Officer, 1st Circle , Tellicherry. It mainly challenges the notification S. R. O. No. 495/90 dated 31. 3. 1990 deleting the exemption to the dealers from payment of sales tax in respect of footwear costing not more than Rs. 20/- per pair.

(2.) THE material facts that lie in short compass are thus: the petitioner-firm deals in cheaper variety of foot wear costing less than Rs. 20 a pair. THE petitioner-firm filed monthly returns in form 8 and paid tax thereon in respect of each month of the year 1989-90. However, the first respondent in pursuance of the budget proposals for 1989-1990 issued notification No. SRO504/89 on 31. 3. 1989 under S. 10 of the Act exempting from sales tax, sale of seven items of goods including footwear costing not more than Rs. 207. When the petitioner came to know about the exemption from newspaper it discontinued collection of tax on the sale value of footwear costing not more than Rs. 20 from 1. 4. 1989. THE dealer filed the annual return for the year 1989-90 declaring the total turnover of Rs. 10,52,291/- and taxable turnover of Rs. 20,495/- claiming exemption on a turnover of Rs. 10,31,776/- in view of the notification referred to above. For the subsequent years 1990-1991 and 1991-1992 the petitioner filed similar returns claiming exemption as above. However, the first respondent issued another notification, sro 495/90 on 31. 3. 1990 exempting footwear manufacturers in the State having turnover not exceeding Rs. 5,00,000/- in the year on the sale of footwear by them in respect of leather for use by them in the manufacture of footwear on the basis of the declaration annexed to the notification. At the same time, the notification by the last para deleted items 3 and 5 of notification SRO 504/89 and thus taken away exemption available in respect of the sale of footwear costing not more than Rs. 20 with effect from 1. 4. 1990. THE petitioner was not aware of the notification withdrawing the exemption available as per the notification SRO 504/89. Later the second respondent issued two notices directing payment of tax for the year 1990-1991 and 1991-1992 in respect of the turnover involved in the sale of footwear which was exempted as per SRO 504/89. Exts. P1 and P2 are the copies of those notices issued by the second respondent demanding payment of tax and proposing penal action in default of payment. In the aforesaid situation, the assessee filed the present petition challenging these Exts. P1 and P2 notices. It is further prayed in the writ petition to declare the notification SRO 495/ 90 in so far as it deletes item 3 from the list of 7 items notified in SRO 504/89 invalid. Subsequent to the filing of the writ petition the petitioner received Ext. P3 notice dated 13. 1. 1991 issued by the second respondent proposing to assess the petitioner provisionally for the months of April 1991 to November 1991. In reply to the said notice the assessee sent Ext. P4 letter to the assessing authority requesting adjournment in view of the pendency of the present writ petition. Since the petitioner has not filed any objection the second respondent has passed Ext. P5 provisional assessment order dated 3. 2. 1992 for the months of April 1991 to November 1991 finding that the claim of exemption is inadmissible. Consequently, the second respondent issued Ext. P6 demand notice dated 4. 2. 1992 calling upon the petitioner to pay sales tax on the turnover of Rs. 2,15,250/- for the months of april 1991 to November 1991. Ext. P7 is the copy of the demand notice calling upon the assessee to pay the surcharge. THEreupon the assessee took steps to amend the present writ petition by filing C. M. P. No. 3703 of 1992 with an additional prayer to quash Exts. P3, P5, P6 and P7 issued by the second respondent. THE writ petition was accordingly amended incorporating the above prayers and also grounds in support thereof.

(3.) THE dispute in this writ petition relates to payment of sales tax during the year 1991-1992. If the first notification granting exemption in respect of sale of footwear as provided therein was not withdrawn the assessee could have enjoyed the benefit of exemption for the year 1990-91 and 1991-92. THErefore, the petitioner is aggrieved by the second notification deleting the exemption already granted during the year 1989-90.