M/S.K.L.F. OIL INDUSTRIES v. State of Kerala and others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 19TH MAY 2010 / 29TH VAISAKHA 1932 OP.No. 38283 of 2001(G) ---------------------------- PETITIONER: -------------- M/S.K.L.F. OIL INDUSTRIES, REP. BY MANAGING PARTNER MR.SUNNY FRANCIS, FR. DISMAS ROAD, IRINJALAKUDA - 680121, KERALA STATE. BY MR. P. BALACHANDRAN, ADVOCATE. RESPONDENTS: ----------------- 1. THE STATE OF KERALA, REP. BY SECRETARY, DEPARTMENT OF INDUSTRIES AND COMMERCE, TRIVANDRUM. 2. DIRECTOR OF INDUSTRIES AND COMMERCE, TRIVANDRUM. 3. GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, TRICHUR. 4. THE ASSISTANT COMMISSIONER (ASSMT), SALES TAX, SPECIAL CIRCLE, TRICHUR. BY MR.K.B. PRADEEP, GOVERNMENT PLEADER FOR R1 TO R4 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 19/05/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP.No. 38283 of 2001(G) ## Order on C.M.P.No.62783/2001 in OP.No. 38283 of 2001 Dismissed. 19.05.10. Sd/- T.R. RAMACHANDRAN NAIR, JUDGE. A P P E N D I X ## PETITIONER'S EXHIBITS: EXT. P1 : COPY OF PROVISIONAL CERTIFICATE AS SSI UNIT DTD. 16.11.90 EXT. P2 : COPY OF LETTER BY PETITIONER TO R3 DTD. 22.3.93. EXT. P3 : COPY OF LETTER ISSUED BY R2 DTD. 22.4.93. EXT. P4 : COPY OF JUDGMENT IN OP. 9043/93 DTD. 25.3.97. EXT. P5 : COPY OF APPLICATION TOGETHER WITH CONNECTION DOCUMENTS FOR SSI EXEMPTION DTD. 5.7.94. EXT. P6 : COPY OF ORDER OF GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, TRICHUR DTD. 8.12.94. EXT. P7 : COP0Y OF APPLICATION FOR ADDITIONAL INVESTMENT IN 92-93 DTD. 9.3.95. EXT. P8 : COPY OF APPLICATION FOR ADDITIONAL INVESTMENT IN 93-94 DTD. 9.3.95. EXT. P9 : COPY OF COMMUNICATION REJECTING THE APPLICATION DTD. 13.6.95. EXT. P10 : COPY OF CIRCULAR DTD. 25.4.94. EXT. P11 : COPY OF CLARIFICATION ISSUED BY SECRETARY INDUSTRIES (B) DEPARTMENT DTD. 6.1.95. EXT. P12 : COPY OF JUDGMENT IN OP.9989/95 L DTD.12.3.99. EXT. P13 : COPY OF ORDER OF DISTRICT INDUSTRIES CENTRE, TRICHUR DTD. 1.10.99. EXT. P14 : COPY OF APPLICATION FILED BY PETITIONER BEFORE R2 DTD. 2.5.00. OP.No. 38283 of 2001 EXT. P15 : COPY OF ORDER OF DIRECTORATE OF INDUSTRIES & COMMERCE, TRIVANDRUM. RESPONDENT'S EXHIBITS: NIL. // True Copy // P.A. to Judge. smp ## **T.R. RAMACHANDRAN NAIR, J.** **---------------------------------------** **O.P. No.38283 OF 2001 --------------------------------------Dated this the 19[th] day of May, 2010.** ## **J U D G M E N T** Aggrieved by the denial of exemption from payment of sales tax, this original petition has been filed by the petitioner. 2. Heard the learned Government Pleader appearing for the respondents. Learned Senior Counsel appearing for the petitioner is no more and hence notice was issued to the petitioner. The same was accepted going by the endorsement. It appears that the petitioner has not engaged any other counsel. 3. The petitioner's claim arises in the following manner: The petitioner is an assessee on the file of the 4[th] respondent and a firm registered by the registrar of firms on 19.12.1990. It manufactures coconut oil, coconut oil cake and pure coconut oil. Provisional registration was granted, going by Exhibit P1 certificate dated 16.11.1990 by the General Manager, District Industries Centre. 4. On the ground that the petitioner had obtained a **O.P. No.38283/2001** **2** provisional SSI registration certificate and the fact that it had started commercial production from March 1992, the petitioner approached the 3[rd] respondent for issuance of sales tax exemption certificate as per Exhibit P2. On finding that the production of the unit is after 31.03.1991, the said claim was rejected as per Exhibit P3. This was challenged in O.P.No.9043/1993. The said original petition was allowed as per Exhibit P4 taking the view that Oil Mills which have obtained provisional registration prior to 01.04.1991 were also be eligible for sales tax exemption. Finally, the 3[rd] respondent granted exemption upto Rs.45,39,822/- as per Exhibit P6. Thereafter, the petitioner by Exhibits P7 and P8 submitted applications for the additional investments in its unit for the years 1992-93 and 1993-94. This was rejected by Exhibit P9 relying upon G.O(P) No.63/91/TD dated 30.03.1991. 5. Reliance is placed on Exhibits P10 circular and P11 communication of the Commissioner and Secretary Industries (B) Department by the petitioner. It is pointed out that going by Exhibits P10 and P11, the petitioner is liable to be granted **O.P. No.38283/2001** **3** exemption. 6. The 2[nd] and 3[rd] respondents have filed a counter affidavit in the matter. The stand taken in the counter affidavit is that as far as Exhibits P7 and P8 applications for additional sales tax exemption are concerned, the petitioner is not eligible in the light of SRO No.440/91. The petitioner's unit had made additional investments during the years 1992-1993 and 1993-94 only and hence the unit is not eligible for tax exemption. The stand taken therefore is that since the unit had not commenced expansion programme before 01.04.1991, the unit is not eligible for additional tax exemption. 7. As regards the circular produced, it is mentioned in the counter affidavit that going by the well settled position, the State Level Committee alone is entitled to clarify the exemption notification. S.R.O No.440/91 which was notified as per G.O.(P) No.63/91/TD dated 30.03.1991 reads as follows: “SRO No.440/91............hereby direct that the exemptions contained in Notifications issued in (1) G.O.(MS) No.74/80/TD dated 29[th] September 1980 published as SRO No.969/80 in Gazette No.42 dated the 21[st] October 1980, (2) G.O.(P) No.94/89/TD **O.P. No.38283/2001** **4** dated 27[th] April 1989 published as SRO No.654/89 in the Kerala Gazette Extraordinary No.393 dated the 27[th] April 1989, and (3) G.O.(P) No.68/90/TD dated 31[st] March 1990 published as SRO No.499/90 in the Kerala Gazette Extraordinary No.351, dated the 31[st] March 1990 shall not apply to any oil mill in the State in which copra is crushed and coconut oil and coconut oil cake are produced except those oil mills which have produced the proceedings referred to in the above notifications before the assessing authority....” 8. It is clear from the above notification that the exemption notification shall not apply to any oil mill in the State in which copra is crushed and coconut oil and coconut oil cake are produced. There is no challenge against it. Herein, reliance is placed by the petitioner on Exhibits P10, P11 etc. It is clear that the circulars are those issued by other departments. Such exemption notification can be clarified only by the State Level Committee. Going by the decision of the Division Bench of this Court in _**M/s. Prima Industries Limited** vs._ _**The Commissioner of Commercial Taxes**_ (M.F.A.No.1168/2002), even the Commissioner has no power to clarify the exemption notification. **O.P. No.38283/2001** **5** 9. Clearly, the case of the petitioner does not come within the purview of G.O.(P) No.63/91/TD dated 30.03.1991. Therefore, Exhibit P9 cannot be said to be illegal or arbitrary. Even going by the averments in the original petition, the petitioner's unit had made additional investments during the years 1992-1993 and 1993-94 only. For all the above reasons, this original petition fails and the same is dismissed. No costs. ## **T.R. RAMACHANDRAN NAIR JUDGE** smp