K. J. JAMES Vs. STATE OF KERALA

JUDGEMENT

(1.) During the year 2001-02, the petitioners manufactured jute products and sold the same to an exporter who exported the same to foreign buyers. However, the petitioner did not take any registration under the Kerala General Sales Tax Act, 1963 (hereinafter called "the KGST Act"). In the course of investigation, the Sales Tax Department noticed the purchase and export of goods by the exporter from the petitioners and consequently the petitioners were called upon to furnish accounts. On verification of accounts, the department noticed purchase and sale of goods by the petitioners in excess of the turnover that requires registration and payment of tax under the KGST Act. Petitioners conceded that there was violation of the provisions of the KGST Act and Rules inasmuch as they have not taken registration and filed monthly returns. The offence was compounded by remitting compounding fee and consequently no penalty was levied.

(2.) During assessment for the same year 2001-02, the petitioners filed returns and claimed exemption on sales turnover based on form 18A prescribed under Rule 28A of the KGST Rules and issued by the purchasers, who are exporters. Claim of exemption by the petitioners is under Section 5(3) of the Central Sales Tax Act, 1956 (hereinafter called "the CST Act") which provides for exemption on last sale or purchase preceding export sale. The purchasers from petitioners, being exporters, issued certificates stating that purchases were made for complying with export orders and goods in fact were exported and consequently their purchases were entitled to sales tax exemption. The department has no case that petitioners were not entitled to exemption based on form 18A obtained by them from the purchasers, if they were registered under the KGST Act during the time of making sales to the exporters. However, exemption was disallowed for the reason that petitioners were not registered under the KGST Act. The assessment orders so issued were confirmed in first appeal and re-confirmed by the Tribunal in second appeal against which these revisions are filed.

(3.) We have heard Sri. V.P. Sukumar, appearing for the petitioners and the Government Pleader appearing for the respondents.