Dismissed

M/S.Meenachil Rubber Wood Ltd. v. State of Kerala

Kerala HC26 Oct 2010ST.Rev./176/2010

Case brief

AI extract

What is this about?

The Court dismissed the revision petition regarding Sales Tax exemption for rubber wood processed and exported. It held that the notification requires the final product to be sold domestically or inter-state where tax is payable, excluding foreign exports. Precedents distinguishing this matter were cited before refusing the exemption.

What did the court decide?

The claim for exemption on purchase turnover for exported timber was disallowed; revision cases dismissed.

M/S.Meenachil Rubber Wood Ltd. Vs State of Kerala — GST and Indirect Tax | Kerala HC (2010)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 26TH OCTOBER 2010 / 4TH KARTHIKA 1932 ST.Rev..No. 176 of 2010() ------------------------TA.171/2009 of APPELLATE AUTHORITY(LR), KOTTAYAM ............ REVISION PETITIONER --------------------------------------M/S.MEENACHIL RUBBER WOOD LTD, ADIVARAM,POONJAR,KOTTAYAM DISTRICT,REPRESENTED BY C.SABU,MANAGING DIRECTOR. BY ADV. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON

¶3

RESPONDENT(S): ---------------

¶4

STATE OF KERALA.

¶5

BY G.P. SRI. MOHAMMED RAFEEQ

¶6

THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 26/10/2010, ALONG WITH STRV NO. 177 OF 2010 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶7

C .N. RAMACHANDRAN NAIR, &

¶8

K. SURENDRA MOHAN, JJ.

¶9

S.T. Rev. Nos. 176 & 177 of 2010

¶10

Dated this the 26th day of October, 2010

¶11

JUDGMENT

¶12

Ramachandran Nair, J.

¶13

The question raised is whether petitioner is entitled to exemption on purchase turnover of raw rubber wood which is treated, converted into hard wood and exported outside Kerala. Admittedly the transaction attracts liability for purchase tax under Section 5A on the rubber wood purchased. However, petitioner's claim is based on notification, SRO 9/2007 which provides for exemption on purchase turnover of rubber wood, if the same is treated and sold in Kerala or out of Kerala on which tax is payable either under the KGST Act or under the CST Act. Petitioner's claim is allowed in respect of so much of the timber purchased, processed and sold locally and inter-State on which tax is payable. However, proportionate disallowance on purchase turnover is made for the turnover of the product exported to foreign country on which no tax is payable under Section 5(1) of the CST Act. Petitioner's case before the lower authorities is that what is required to

¶14

STRV 176 & 177/2010

¶15

¶16

claim exemption is that the commodity manufactured should be taxable under KGST or CST Act, and there is no need to pay tax on the same. In our view, the use of the words in the notification that "manufactured goods shall be liable to tax either under KGST Act or under the CST Act" only mean that dealer claiming benefit of exemption under the notification should pay tax on the product under the KGST or CST Act. In other words, unless the processed timber is sold in Kerala or from Kerala as inter-State sale on which either local sales tax or central sales tax is not paid, the timber purchased for making such goods will not be entitled to exemption. All the authorities, right from the assessing officer till the Tribunal, understood the notification in the manner expressed by us above. We do not find any merit in the claim of exemption made by the petitioner on the timber purchased for processing and export because what the Government wanted is a tax benefit on raw material to dealers who pay tax on final product. Further, it is also worthwhile to mention here that the scheme of exemption under Section 5(1) or 5(3) does not envisage exemption on raw material purchased and processed for export. So much so the

¶17

STRV 176 & 177/2010

¶18

¶19

exemption condition in the notification appears to be consistent with the scheme of Section 5(1) or 5(3) of the Act. Even though counsel for the petitioner relied on decisions in RAGAM PLASTICS V. STO, (1988) 1 K.L.T. 321 and STO V. RAGAM PLASTICS, (1989) 2 KLT 480, we do not think the decisions will apply here. Consequently we dismiss the Revision Cases.

¶20

(C.N.RAMACHANDRAN NAIR) Judge.

¶21

(K. SURENDRA MOHAN)

¶22

¶23

STRV 176 & 177/2010 4

M/S.Meenachil Rubber Wood Ltd. v. State of Kerala

Case brief

What is this about?

What did the court decide?

M/S.Meenachil Rubber Wood Ltd. v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

The Commissioner of Income Tax, Trichur. Vs the Dhanalekshmi Bank Ltd, Trichur

Sri.Jose Cyriac Vs the Commissioner of Income Tax

Ushakumari.K.T and Others Vs Union of India and Others

Smt.R.Noorjahan Vs State of Kerala

M/S.P.P.Ashique, Hamson Associates Vs the State of Kerala

Changanacherry Rubber Marketing Co-Op. Vs Joint Registrar of Co-Op. Societies(G)