BESTOTEL Vs. STATE OF KERALA

JUDGEMENT

(1.) THE tax revision case, at the instance of the assessee, arises out of the order passed by the Kerala Sales Tax Appellate Tribunal, Additional Bench, Kottayam in T. A. No. 73 of 1995. THE relevant assessment year is 1991-92. Following questions are raised for the decision of this Court : " (i) Whether, on the facts and in the circumstance of the case, the Sales Tax Appellate Tribunal is justified in law in holding that tax is leviable on the turnover of the assessee for the period from April 1, 1991 to July 31, 1991 in the light of entry 57 of the First Schedule to the Kerala General Sales Tax Act and the exemption notification which came into force from August 1, 1991 ? Is the Tribunal justified in law in taking the view in the present case that 'when reckoning the turnover of an assessee for a particular period, the liability of tax is to be determined on the basis of his turnover for the complete assessment year ?' (ii) Whether, on the facts and in the circumstances of the case, has not the Appellate Tribunal committed an error in relying on the decision of this honourable court in S. Koder Agencies v. State of Kerala [1993] 89 STC 528 which was laid down in a different context altogether ?"

(2.) THE relevant facts are as follows : Revision petitioner is an assessee under the Kerala General Sales Tax Act, 1963. It is running a hotel. For the assessment year 1991-92, it claimed exemption on the turnover of cooked food amounting to Rs. 24,95,510 on the basis of a Notification S. R. O. No. 1003 of 1991. THE notification is issued by the Government of Kerala in exercise of its power under section 10 of the Kerala General Sales Tax Act, 1963. THE assessment was originally completed by the Sales Tax Officer fixing the total and taxable turnover as Rs. 41,80,208 and Rs. 1,41,320 respectively. Assessment was later revised under section 19. Assessing authority took the view that sales of cooked food for the year 1991-92 have been exempted from the levy of tax under S. R. O. No. 1003 of 1991 only with effect from August 1, 1991. THErefore, while finalising the assessment, the officer took into consideration the turnover up to August 1, 1991 as taxable. He completed the assessment fixing Rs. 8,13,860 as escaped turnover.

(3.) LEARNED Government Pleader who appeared on behalf of the Revenue contended that the principle laid down in S. Koder Agencies v. State of Kerala [1993] 89 STC 528 (Ker) is fully applicable in the present case also. He pointed out that the definition of the terms "turnover" and "year" under section 2 (xxvii) and 2 (xxx) of the Kerala General Sales Tax Act, 1963 read with rule 18 of the Kerala General Sales Tax Rules, 1963 would clearly show that the liability to pay tax has to be assessed, taking into consideration the turnover for the entire financial year. If that be so, the turnover in respect of the hotel business of the assessee would be above Rs. 20 lakhs and the assessee can be granted exemption only with effect from August 1, 1991, namely, the date on which S. R. O. No. 1003 of 1991 came into force. Relying on a decision of the Supreme Court in State Level Committee v. Morgardshammar India Ltd. [1996] 101 STC 1, learned Government pleader further contended that the provisions in a taxing statute granting exemption are to be construed strictly. Under these circumstances according to learned Government pleader, there was no error in the finding entered by the Tribunal.