JAYALAKSHMI GRANITE METAL INDUSTRIES Vs. STATE OF KERALA

JUDGEMENT

(1.) PETITIONER is a partnership-firm engaged in the crushing of metals of different sizes, namely 20 mm, 12 mm and 16 mm gravel by crushing big boulders and stones using crushers, compressors and other machineries. The petitioner is a small-scale industries unit registered with the Directorate of Industries and Commerce, Trichur Taluk evidence by exhibit P2. The petitioner thereafter applied to the General Manager, District Industries Centre for sales tax exemption as provided under S. R. O. No. 968 of 1980 and S. R. O. No. 499 of 1990. The said application was rejected by the General Manager, District Industries Centre, Trichur by communication dated December 9, 1991 stating that as per the definition of "manufacture" given in Circular Nos. 20738/b3/90/td dated October 25, 1990, April 1, 1991 and April 20, 1991 issued by the Taxes Department, the petitioner's unit does not qualify for sales tax exemption certificate. It is also stated that the manufacture for the purpose of S. R. O. No. 499 of 1990 dated March 31, 1990 means the use of raw materials and production of goods commercially different from raw materials used and that in the case of the petitioner raw materials and finished products are one and the same. Aggrieved by the said order, the petitioner filed exhibit P6 petition before the Government with a copy to the Director of Industrial and Commerce, Trivandrum. By exhibit P7, the office of the Finance Minister informed the petitioner that the said petition has been forwarded to the concerned secretary for necessary action. The Director of Industries considered the said application and informed the petitioner that as per the existing directions from the Government, metal crushing unit is not eligible for sales tax exemption. It is seen that the petitioner has made a further petition to the Government in the Industries Department evidenced by exhibit P9, a copy of the same was also sent to the Director of Industries and Commerce, Trivandrum. To the said petition also the Director of Industries and Commerce sent reply evidenced by exhibit P10 stating that as per the circular already referred metal crushing units are not eligible for sales tax exemption. The petitioner has also produced the order issued by the General Manager, District Industries Centre, Trichur evidenced by exhibit P4, wherein exemption certificate was issued to another metal crushing industry, M/s. Mattathil Granite Metals, Chalakkudy.

(2.) IN this original petition the petitioner has sought for a declaration that it is entitled to sales tax exemption in view of exhibit P4 and also for a direction to respondents to issue the eligibility certificate to the petitioner's unit for sales tax exemption. The petitioner has also sought for quashing exhibits P5, P8 and P10 communications. The petitioner has in the alternative requested for a direction to the second respondent to consider exhibit P6 and pass appropriate orders on the same. He submitted that since the notification S. R. O. No. 499 of 1990 was issued long after the setting up of the unit and the commercial production the relevant notification that should apply to the petitioner is S. R. O. No. 968 of 1980. Learned counsel further submitted that there is no definition of "manufacture" in the said Government Order. He also submitted that the process involved in the case by employing various machineries and human labour will certainly amount to manufacture as understood in the notification S. R. O. No. 968 of 1980 and that there is no justification for importing the definition contained in S. R. O. No. 499 of 1990 for deciding the petitioner's application. He accordingly submitted that exhibits P5, P8 and P10 orders passed by the respondents are contrary to the spirit and object of the notification. Learned counsel also submitted that having regard to the fact that very huge amounts were invested in the plant and machinery for the purpose of crushing big boulders and stones into different sizes to suit the requirements of various customers for use and construction of the buildings and the number of workers engaged in the said industry and also the further fact that the Director of INdustries and Commerce has understood the process employed by the petitioner as a manufacturing process by issuing exhibits P2 and P4 registration certificates the second respondent ought to have considered the matter keeping the spirit and object of the various Government Orders issued giving incentives for setting up new industries should have considered the matter sympathetically by granting exemption from sales tax to the unit of the petitioner, who is engaged in the metal crushing industry. Learned counsel alternatively submitted that the second respondent may be directed to consider exhibit P6 application and pass appropriate orders thereon.

(3.) IN order to get the benefit of Notification S. R. O. No. 968 of 1980, it is necessary for the petitioner to establish that the product dealt with by the petitioner is a different product obtained by him from the raw material by some processes. The question therefore is can it be said that the conversion of big metals into different sizes to suit the requirements of various customers does bring into existence a new and distinct commercial commodity other than the raw materials used.