Allowed

The Association of Planters of Kerala v. State of Kerala and Others

Kerala HC7 Jul 2016WP(C)/10313/2011

Case brief

AI extract

What is this about?

The Kerala High Court examined a writ petition challenging the demand for plantation tax on tea and coffee planters. The court held that a specific exemption applies to the assessment year 2010-11 based on a Government Order but did not extend that exemption to subsequent years. Petitioners were directed to seek future exemptions separately.

What did the court decide?

The demand for plantation tax for the assessment year 2010-11 is exempted in terms of the Government Order; petitioners can approach the Government for exemption in future years.

The Association of Planters of Kerala Vs State of… — Writ and Judicial Review | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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THURSDAY, THE 7TH DAY OF JULY 2016/16TH ASHADHA, 1938

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WP(C).No. 10313 of 2011 (L)

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PETITIONER(S):

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1. THE ASSOCIATION OF PLANTERS OF KERALA, P.B.NO.63,3RD FLOOR,3D,CAPITOL CENTRE, OPP: GOVT. SECRETARIAT, MAHATMA GANDHI ROAD, THIRUVANANTHAPURAM- 695 001,

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REPRESENTED BY ITS SECRETARY, MR.PRINCE THOMAS GEORGE.

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2. M/S.KANAN DEVAN HILLS PLANTATIONS CO. PVT. LTD., KDHP HOUSE, MUNNAR-685 612,

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REPRESENTED BY ITS DEPUTY MANAGER(ADMINISTRATION & LEGAL), MR.C.SREEKUMAR.

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3. MR.C.SREKUMAR, DEPUTY MANAGER

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(ADMINISTRATION & LEGAL),M/S.KANAN DEVAN HILLS PLANTATIONS

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CO. PVT. LTD., KDHP HOUSE, MUNNAR-685 612.

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BY SRI.JOSEPH KODIANTHARA,SENIOR ADVOCATE ADVS. SRI.V.ABRAHAM MARKOS SRI.MATHEWS K.UTHUPPACHAN SRI.TERRY V.JAMES SRI.B.J.JOHN PRAKASH

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RESPONDENT(S):

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1. STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM,PIN-695 001.

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2. THE SECRETARY, DEPARTMENT OF REVENUE, GOVERNMENT OF KERALA, SECRETARIAT,

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THIRUVANANTHAPURAM, PIN-695 001.

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3. THE TAHSILDAR, DEVIKULAM TALUK, OFFICE OF THE TAHSILDAR, DEVIKULAM-685 613.

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R1 TO R3 BY SPL.GOVERNMENT PLEADER SMT. SUSHEELA R. BHATT

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 07-07-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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sts

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WP(C).NO.10313/2011

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APPENDIX

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PETITIONER'S EXHIBITS:

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P1 COPY OF THE LIST SHOWING THE NAMES OF THE PERSONS WHO ARE MEMBERS OF THE 1ST PETITIONER, EXTENT OF PLANTATIONS HELD BY SUCH MEMBERS AND THE NATURE OF SUCH PLANTATIONS.

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P2(A) COPY OF THE GOVERNMENT ORDER G.O.(MS) NO.33/2007/RD DATED 01/02/2007 FOR THE YEAR 2006-07

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P2(B) COPY OF THE GOVERNMENT ORDER G.O.(MS).NO.98/2008/RD DATED 19/04/2008 FOR THE YEAR 2007-08

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P2(C) COPY OF THE GOVERNMENT ORDER G.O.(MS).NO.332/2009/RD DATED 22/08/2009 FOR THE YEAR 2008-09

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P3 COPY OF THE GOVERNMENT ORDER G.O.(RT) NO.697/2009/LBR DATED 25/5/2009

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P4 COPY OF THE GOVERNMENT ORDER DATED 01/12/2010

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P5 COPY OF THE NOTICE DATED 24/03/2011 ISSUED BY THE 3RD RESPONDENT P6 COPY OF THE REPLY DATED 26/03/2011 ISSUED BY THE 2ND PETITIONER TO THE 3RD RESPONDENT

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P7 COPY OF THE NOTICE DATED 26/03/2011 ISSUED BY THE 3RD RESPONDENT TO THE 2ND PETITIONER.

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P8 COPY OF THE REPLY DATED 29/03/2011 ISSUED BY THE 2ND PETITIONER TO THE 3RD RESPONDENT

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P9 COPY OF THE REPRESENTATION DATED 28/03/2011 SUBMITTED BY THE 1ST PETITIONER TO THE HON'BLE REVENUE MINISTER SHRI.K.P.RAJENDRAN.

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P10 COPY OF THE REPRESENTATION DATED 28/03/2011 SUBMITTED BY THE 1ST PETITIONER TO THE CHIEF SECRETARY, GOVERNMENT OF KERALA.

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RESPONDENT'S EXHIBITS:

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R1(A) COPY OF THE NOTIFICATION NO.20245/LEG.B2/2014/LAW DATED 30/9/2014.

/TRUE COPY/

P.A.TO JUDGE

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A.M.SHAFFIQUE, J.

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------------------------------------ W.P.(C).No.10313 of 2011

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----------------------------------- Dated this the 7^th day of July, 2016

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J U D G M E N T

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The petitioners have approached this Court seeking for the following reliefs :

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(i) Declare that tea and coffee planters in Kerala are not liable to pay plantation tax for plantation tax assessment years 201011 onwards pursuant to Exhibit-P4 order.

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(ii) Direct the Respondents to refrain from demanding and / or collecting plantation tax from tea and coffee planters in Kerala for plantation tax assessment years 2010-11 onwards.

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(iii) Direct the 1^st Respondent and / or the 2^nd Respondent to issue further directions and / or Orders, if necessary, to implement the decision/direction of the Government of Kerala evidenced by Exhibit P4, not to levy and collect plantation tax from tea and coffee planters in Kerala.

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The short facts involved in the writ petition would disclose that the Government had exempted the plantations carrying on cultivation of tea, coffee, rubber, etc from payment of plantation tax in terms of the Kerala Plantation Tax Act, 1960 for a few years. Ext.P2 series are the notifications. Ext.P2(a) notification is issued by the Revenue Department on 01.02.2007 exempting plantation tax being payable by plantation persons carrying on tea, coffee or cardamom for the financial year 2006-07. Similarly, Ext.P2(b) is a notification dated 19.04.2008 by which the tea plantations had been exempted from payment of plantation tax for the year 2007-08. Ext.P2(c) is another notification dated 22.08.2009 by which tea

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plantations have been exempted from payment of plantation tax for the year 2008-09. It is stated that the Government had constituted a committee in terms of Ext.P3 dated 25.05.2009 to study the problems of plantation sector in the State of Kerala and to submit a study report to the Government by evaluating the situations prevailing in the State of Assam and West Bengal. Certain terms of reference have also been prescribed, which included the tax system in the plantation sector with reference to the other States. According to the petitioner, pursuant to the said report, the Labour and Industries Department has issued an order dated 01.12.2010 (Ext.P4) by which it was ordered that tea and coffee plantations in the State shall be exempted from payment of plantation tax. While the above order was pending, demand was made by the Thahsildar by notice dated 24.03.2011 stating that the 2^nd petitioner had not paid plantation tax. The 2^nd petitioner informed the Thahsildar by Ext.P6 stating that they were exempted from payment of plantation tax as per the Government Order referred above. The Thahsildar, by further letter dated 26.03.2011, informed the petitioners that in respect of the plantation tax for the year 2010-11, the order referred by the petitioner is issued by the Labour and Industries Department, whereas, the concession has to be extended by the Revenue Department. The matter was again taken up by the 1^st petitioner. However, further orders were not passed and hence this

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writ petition is filed.

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The 2^nd respondent has filed a statement and a counter affidavit has been filed by the 1^st respondent. It is inter alia contended that the 2^nd petitioner is not entitled for any such relief as the possession of the property itself is doubtful and the Government had taken up the matter at different levels. That apart, it is contended that the schedule to the Plantation Tax Act has been amended with effect from 30.09.2014 and after the amendment, the rate of tax has been prescribed and therefore, all plantations are liable to pay tax.

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Heard the learned Senior counsel appearing for the petitioners and the learned Special Government Pleader appearing on behalf of the respondents. The learned counsel for the petitioners places reliance on Section 28 of the Plantations Tax Act, which reads as under :

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“ 28. Permission of plantation tax :- Notwithstanding anything contained in this Act, the Government may remit, in whole or in part, the amount of plantation tax payable by any person if they are satisfied that it is necessary to do so on account of the failure or destruction of crops or on account of the fact that the yield in any plantation has been substantially reduced due to natural causes.

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The argument is that contention of the Thahsildar that order has to be passed by the Revenue Department is totally baseless since what is contemplated is an order to be passed by the Government. Once

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the Government passed an order, irrespective of the Department which had taken up the matter, it becomes a Government Order and it is an order passed under Section 28. Therefore, the remission of payment of tax is very clear. That apart, Section 28 does not contemplate a gazette notification being issued in order to make the Government order applicable. Learned counsel also relied upon the judgment of this Court in Thamarappally Rubber Products v. Additional Sales Tax Officer [[1994] 94 STC 179] wherein this Court after relying upon the judgment in Pournami Oil Mills v. State of Kerala [[1987] 65 STC 1] held that when the Government had issued orders to the effect that the sales tax on finished rubber goods had been reduced to 3 per cent, there was no justification for the State to contend that this notification had not been issued under section 10 of Kerala General Sales Tax Act. Hence, it was held that the liability of the petitioner was only 3 per cent on finished rubber goods produced from factories in Kerala. The argument is that even without a notification issued in terms of Ext.P2 series, still the Government Order is applicable and therefore the petitioners are not liable to pay plantation tax.

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On the other hand, the learned Special Government Pleader placing reliance on the counter affidavit submits that the liability had been fastened on the petitioners and there is nothing in Ext.P4 to indicate that such an exemption is granted. That apart, the

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statute is amended and by amending the schedule, it is very clear that the liability of tax is on the plantations like the petitioners. As far as the other contentions urged by the learned Special Government Pleader is concerned regarding the right, title and interest of the 2^nd petitioner company, I don't think that such issues are relevant to be considered in the present case. We are only concerned with the obligation on the part of the plantation companies to pay plantation tax and whether it is exempted in terms of Ext.P4.

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Ext.P4 apparently is a Government Order dated 01.12.2010 wherein after conducting a study in the matter, the Government had decided to grant plantation tax exemption to tea and coffee plantations. It is issued by the Government. The Governor issues an order on behalf of the Government and it is not in dispute that the Government acts on the advice of the Council of Ministers and when such an order is passed, it cannot be stated that in the absence of a notification from the Revenue Department, the exemption will not apply. Further, there is nothing in Section 28 to indicate that the Government order will be effective only on publication in the gazette. There is nothing in Section 28 to indicate that such a publication in the gazette is required. Even otherwise, as held by the Apex Court in Pournami Oil Mills (supra) and this Court in Thamarapally Rubber Products case, the exemption

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applies from the date of notification. Therefore, there cannot be any dispute that the petitioners were exempted from payment of tax for the financial year 2010-11 as the order is passed on 01.12.2010.

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Now the only question is whether the petitioners are entitled for similar treatment for payment of plantation tax for the subsequent years. In fact, separate notifications had been issued by the Government on earlier occasions exempting payment of tax. Therefore, Ext.P4 can only be treated as an order by which the payment of plantation tax is exempted for the year 2010-11. If the petitioner requires any benefit on the basis of Government Order dated 01.12.2010 for other financial years, it is open for the petitioners to approach the Government. I don't think that Ext.P4 can be read as giving a blanket exemption to all plantations not to pay plantation tax, whereas, it has to be assumed that Ext.P4 applies only for the relevant year. The report of the committee is also not before this Court. The Government appears to have relied upon the report and the cabinet decision dated 30.11.2010 is not available to arrive at such a conclusion.

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At any rate, as far as this case is concerned, the demand was with reference to the assessment year 2010-11. Whether the petitioners will be entitled for exemption in future years is a matter to be considered when there is a demand made. In the said circumstances, this writ petition is allowed to the following extent :

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