ITEL INDUSTRIES LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) THE question raised is on rate of tax payable on interstate sale of electronic push button telephone manufactured and sold by the petitioner in Kerala. Assessments involved are for the years 2000-2001 and 2002-2003. The assessment for 2000-2001 was completed initially by applying rate of tax at 2%. However, the assessment was revised for this year and regular assessment for 2002-2003 was completed fixing the rate of tax on interstate sales of electronic push button telephone at 4%. The petitioner was unsuccessful in the appeals at two levels and consequently these revisions are filed against the orders of the Tribunal. We have heard Senior counsel Dr. K. B. Mohammedkutty appearing for the petitioner and Government Pleader appearing for the respondent.

(2.) THE contention of Senior counsel appearing for the petitioner is that there has been general reduction of tax on interstate sale of various goods under Notification SRO 1731/93 issued under S.8(5) of the CST Act. In fact, this Notification has been subject to several amendments periodically. When electronic push button telephone was introduced through Notification SRO 304/99 with effect from 01/04/1999 by inserting Entry 18A in Schedule II of SRO 1731/93, the rate of tax on push button telephone under this Entry was 2%. However, later Table to Schedule II was substituted by SRO 609/2000 wherein a general rate of 4% is fixed for various electronic goods specified thereunder, which Notification was issued in terms of Entry 11 of Schedule II of SRO 1731/93. The confusion arose because after the introduction of Entry 18A and Table to Schedule II under Entry 11 of the said Schedule, push button telephone attract tax at 2% and electronic push button telephone under Entry 1.11 of Table to Schedule II attract tax at 4%. The Assessing Officer found that both push button telephone and electronic push button telephone are two categories of goods and since petitioner is manufacturing and selling electronic push button telephones, the rate applicable is 4%. This order is confirmed in first appeal by the appellate authority and by the Tribunal in second appeal, against which revisions are filed.