Research › Search › Judgment

Kerala High Court · body

2008 DIGILAW 594 (KER)

N. Ibrahim v. The State of Kerala

2008-09-25

A.K.BASHEER, H.L.DATTU

body2008
Judgment :- H.L. Dattu, C.J. This revision petition is filed by an assessee registered both under the provisions of the Kerala General Sales Tax Act and Central Sales Tax Act ("KGST Act & CST Act" for short), being aggrieved by the orders passed by the Kerala Agricultural Income Tax and Sales Tax Appellate Tribunal, Additional Bench, Palakkad in T.A.No.388/2003 dated 30th June, 2003. The Tribunal has rejected the assessee's appeal. 2. The assessee has framed the following questions of law for our consideration and decision. They are as under: i). Whether on the facts and in the circumstances of the case the Appellate Tribunal is justified in holding that tax is leviable on the sale of sand effected Inter-State in the light of the fact that the sale of the commodity within the State is fully exempt from tax under the K.G.S.T.Act and in the light of the relevant provision under the C.S.T.Act giving exemption to such sales. Is not the decision contrary to the Statutory provisions under the C.S.T. Act as well as the decisions of the Hon'ble Supreme Court of India and this Hon'ble Court on the point? ii). Is not the levy of interest incorrect? 3. In order to answer the questions of law framed by the assessee, the facts in brief requires to be noticed. They are as under: The petitioner is a dealer in river sand. He has registered himself as a dealer both under the provisions of the KGST Act and CST Act. The assessment year in question is 1998-1999 (CST) . In the returns filed, the assessee had claimed exemption from payment of tax under the Central Sales Tax Act, in view of Entry 7A of III Schedule to the Notification-S.R.O.No.1727/93 as modified by S.R.O.No.213/97. The claim of the assessee is rejected by the assessing authority on the ground, that, the exemption that is granted under Entry 7A of III Schedule to the Notification is conditional exemption and therefore, the assessee is entitled for exemption only under the provisions of the KGST Act and not for the transactions under the provisions of CST Act. This view of the assessing authority is accepted by the first appellate authority and the Tribunal. The Tribunal, while deciding the appeal, at paragraph 3 of its order has stated as under: "3. This view of the assessing authority is accepted by the first appellate authority and the Tribunal. The Tribunal, while deciding the appeal, at paragraph 3 of its order has stated as under: "3. We have examined the facts of the case and the arguments put forward by both the parties in detail. We find that sand is exempted under SRO 213/97 under KGST Act. The said exemption is not general but conditional. The condition is that the sand should be for consumption within the State. The tax payable under CST Act can be exempted under Section 8 (2A) only if the goods are exempted under KGST Act generally without any condition. The exemption given under KGST Act is conditional. Hence there is no exemption under CST Act. No 'C' Forms are available. In the circumstances, the prayer of the appellant to exempt interstate sales of river sand from CST assessment deserves no merits at all. The said point is, therefore found against the appellant." 4. We are in full agreement with the reasoning of the Tribunal. 5. Entry 7A of III Schedule to the Notification- S.R.O.1727/93 reads as under: Sl.No. Name of Dealer Turnover which Conditions and is exempted restrictions (1) (2) (3) (4) xx xx xx xx 7A Any dealer Turnover of Sale of The sand is for River Sand within the consumption State within the State 6. The Notification clearly states what is exempted under the notification. It says turnover of sale of river sand within the State. 7. In our opinion, it is a conditional exemption, in the sense that, if a dealer effects sale of river sand only in the State of Kerala, he would be exempted from payment of tax under the KGST Act. Since it is a conditional exemption, in our opinion, in view of Section 8 (2A) of the CST Act, the assessee is not entitled for exemption under the provisions of the CST Act. This is the line of reasoning of the Tribunal also. We are in agreement with the reasoning of the Tribunal. Therefore, without going to the other details of the case, while confirming the orders passed by the Tribunal, we reject the revision petition filed by the assessee. Ordered accordingly.