COCHIN CADALAS P LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) The only question that arises for consideration and decision in these revision petitions is, whether "craft paper" falls under entry 94(i) or 94(ii) of the First Schedule to the Kerala General Sales Tax Act, 1963 and the rate of tax payable thereon.

(2.) The assessing authority for the assessment years in question has classified the commodity in question as a "paper product" coming under entry 94(ii) of the First Schedule to the KGST Act on the sole ground that paper and craft paper are goods of different identity and has different use. The first appellate authority in the appeals filed by the assessee has held that craft paper requires to be classified as an item falling under entry 94(i) of the First Schedule, treating it as paper, relying on the decision of the Supreme Court in the case of Khatema Fibres Ltd. v. State of Uttar Pradesh, 2004 135 STC 193. In the second appeal filed by the Revenue, the Appellate Tribunal has taken the view, that, since craft paper is sold to carton manufacturers for the manufacture of packing materials, the commodity in question requires to be classified as an item falling under entry 94(ii) of the First Schedule to the KGST Act and accordingly, has allowed the Revenue s appeals and has confirmed the orders passed by the assessing authority for the assessment years 1994-95, 1995-96, 1996-97, 1997-98, and 1998-99.

(3.) The petitioner is a company incorporated under the provisions of the Companies Act, 1956. It is also a dealer registered both under the Kerala General Sales Tax Act and the Central Sales Tax Act, 1956. The assessee is engaged in the production and sale of craft paper and the product is mainly sold to carton manufacturers.