V.K. Rajan v. Sales Tax Officer, Irinjalakuda and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE ANTONY DOMINIC** **WEDNESDAY, THE 13TH DAY OF MARCH 2013/22ND PHALGUNA 1934** ## **WP(C).No. 22001 of 2007 (T)** **----------------------------** **PETITIONER:** - **-------------------** **V.K.RAJAN, SANKAR OIL MILL, POOMANGALAM, P.O. ARIPALAM, IRINJALAKUDA THRISSUR DISTRICT.** **BY ADVS.SRI.ARIKKAT VIJAYAN MENON SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON** **RESPONDENT(S):** - **----------------------------** **1. SALES TAX OFFICER, IRINJALAKUDA.** **2. DEPUTY TAHSILDAR (RR), MUKUNDAPURAM TALUK OFFICE, IRINJALAKUDA.** **3. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, KERALA GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.** **BY GOVERNMENT PLEADER SRI.T.K.SHAIJ RAJ** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13-03-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).22001/07-T** ## **APPENDIX** ## **PETITIONERS' EXHIBITS:-** |EXT.P1:-|TRUE COPY OF PROVISIONAL REGISTRATION CERTIFICATE ISSUED BY GM,| |---|---| ||DIC, THRISSUR.| |EXT.P2:-|TRUE COPY OF CERTIFICATE ISSUED BY GM, DIC, THRISSUR.| |EXT.P3:-|TRUE COPY OF LETTER FROM MANAGER, DIC TO IOB, VELLANGALLUR| |EXT.P4:-|TRUE COPY OF CERTIFICATE ISSUED BY ASST.EXE.ENGINEER,| ||VELLANGALLUR| |EXT.P5:-|TRUE COPY OF CERTIFICATE ISSUED BY DIC, THRISSUR.| |EXT.P6:-|TRUE COPY OF CERTIFICATE ISSUED BY ASST.ENGINEER, VELLANGALLUR| |EXT.P7:-|TRUE COPY OF JUDGMENT IN W.A.134/91 OF THIS COURT| |EXT.P8:-|TRUE COPY OF ORDER IN T.A.413/88 ISSUED BY THE APPELLATE TRIBUNAL,| ||PALAKKAD.| |EXT.P9:-|TRUE COPY OF ASSESSMENT ORDER ISSUED BY R1| |EXT.P10:-|TRUE COPY OF ORDER NO.25160910 ISSUED BY R1| |EXT.P11:-|TRUE COPY OF ASSESSMENT ORDER FOR 84-85 ISSUED BY R1| |EXT.P12:-|TRUE COPY OF RECTIFICATION ORDER ISSUED BY R1| |EXT.P13:-|TRUE COPY OF PROCEEDING ISSUED BY R1| |EXT.P14:-|TRUE COPY OF NOTICE ISSUED BY R1| |EXT.P15:-|TRUE COPY OF LETTER ISSUED BY R2| ## **RESPONDENTS' EXHIBITS:- NIL** //TRUE COPY// P.A. TO JUDGE OKB/- ## **ANTONY DOMINIC,J** ## **--------------------------------** ## **W.P.(C) No.22001 of 2007** ## **------------------------------------Dated this the 13[th] day of March, 2013** ## **JUDGMENT** This writ petition is filed challenging Exts.P11, P13 and P14 orders. The contention of the petitioner that he is entitled to the benefit of exemption from tax under the KGST Act in view of G.O(P) 194/79/ID dated 11.04.1979 and the principles laid down by the Apex Court judgment in _**Pournami Oil Mills v. State of Kerala[(1987) 65 STC 1]** ._ 2. The above mentioned Government Order issued on 11.04.1979 provided that new industrial units under the Small Scale Industries set apart on 01.04.1979, will be exempted from the payment of sales tax for a period of five years from the date of production. Subsequently, the Government issued SRO No.968/1980 dated 29.09.1980 and this was published on 21.10.1980. This Government Order provided for exemption from sales tax for new W.P.(c) No.22001 of 2007 : 2 : industrial units under the Small Scale Industries for a period of five years from the date of commencement of sales. However, the proviso to the notification stated that the cumulative sales tax concession granted to a unit at any point of time within the five year period shall not exceed 90% of the cumulative gross fixed capital investment of the unit. An explanation that was incorporated in the notification also stated that the expression in the notification “new industrial units under the small-scale industries” shall mean undertakings set up on or after 01.04.1979, and registered with the Department of Industries and Commerce. This provision was interpreted by the Apex Court judgment in **Pournami Oil Mills Case** (supra) and it was held that the second notification will have effect only in respect of units, which are set up after 21.10.1980. W.P.(c) No.22001 of 2007 : 3 : 3. Insofar as the petitioner is concerned, Ext.P1 is the provisional registration of the Small Scale Industrial Unit dated 04.12.1979. Ext.P4 issued by the Assistant Executive Engineer of the Kerala State Electricity Board show that the petitioner applied for power connection on 06.05.1980 and power was allocated on 20.05.1980. Ext.P5 is the certificate issued from the District Industries Centre on 12.09.1980, which say that the machineries mentioned therein were installed in the petitioner's industrial unit and where in good working condition. The certificate also state that it was issued for production before the Manager, Indian Overseas Bank, Vellangallur. 4. Ext.P6 issued by the Assistant Executive Engineer in the KSEB would show that power connection was given to the petitioner on 20.01.1991 and going by the pleadings, commercial production was commenced on 05.02.1981. W.P.(c) No.22001 of 2007 : 4 : 5. Meanwhile, on the basis that the unit was set up after 21.10.1980, the petitioner applied for the benefit of exemption as provided under SRO No.968/1980 and the benefit was also granted. Subsequently, according to him, on coming to know of the judgment in **Pournami Oil Mills Case** (supra), on 02.02.1987, the petitioner submitted a representation to the first respondent to revise the assessments already completed in the light of the aforesaid judgment and to refund the tax already collected. In Ext.P7 judgment, in W.A.No.134/1990, this Court directed the first respondent to consider the representation. 6. It appears that in the meanwhile, assessment for the subsequent years namely, 1984-1985 and 1985-1986 were also completed. Pursuant to the orders of this Court and also the directions of the Tribunal in an appeal filed by the petitioner and in Exts.P11, P13 and P14, the claim was W.P.(c) No.22001 of 2007 : 5 : negatived, on the basis that the petitioner commenced production after 21.10.1988 and therefore, is not eligible for the benefit of the Government order dated 11.04.1979. It is challenging these orders, the writ petition is filed. 7. Main contention raised by the counsel for the petitioner is that in the judgments in TRC No.200/1989 and TRC Nos.18 to 22 of 1991, this Court has already taken the view that the notification on 11.04.1979 only required that a unit shall be set up to avail of the benefit of exemption and that therefore, the delay in getting electricity connection resulting in postponement of the commencement of the production cannot result in an eligible assessee being deprived of the benefit of exemption as provided under Government Order dated 11.04.1979. 8. In support of this contention, counsel for the petitioner relied on Ext.P5 certificate issued by the District W.P.(c) No.22001 of 2007 : 6 : Industries Centre on 12.09.1980, where it was stated that the machineries mentioned therein where already installed and that the machineries where in working condition. Therefore, he says that the unit having been set up prior to 21.10.1980, the petitioner should not be deprived of the benefit of the Government Order on 11.04.1979. This in substance is the case of the petitioner. 9. In the counter affidavit filed by the first respondent, it has been stated thus in paragraph 12: “ _SRO 968/80 stipulates certain steps to be taken by the unit claiming tax exemption under the SRO. The petitioner fulfilled all these steps and applied for exemption under the scheme stating that the unit was set up after 20.10.1980. The petitioner has to produce records before the industries department to show that the unit was set up after 21.10.1980 and details such as amount of capital investment etc are be proved by documents. It is after fulfilling all such_ W.P.(c) No.22001 of 2007 : 7 : _formalities by the petitioner that the claim of tax exemption to the tune of Rs.1,31,295/was sanctioned by the Industries Department under SRO 968/80. As the petitioner is not eligible for tax exemption under G.O(P) 194/79 the exemption benefit under SRO 968/80 as claimed by the petitioner and granted by the Industries Department is allowed to the petitioner. When the limit of exemption eligibility exhausted, balance tax and other dues were demanded by the department.”_ 10. There is no affidavit in reply to this. 11. Reading of this affidavit shows that the petitioner availed the benefit of SRO No.968/1980 on his own asserting and proving that he had set up the unit after 20.10.1980. He having made the claim on that basis and availed the benefit cannot now turn round and contend that he set up the unit prior to 20.10.1980 and therefore, is eligible for the benefit of the Government Order dated W.P.(c) No.22001 of 2007 : 8 : 11.04.1979 as upheld by the Apex Court in the **Pournami Oil Mills Case** (supra). In essence therefore, the conduct of the petitioner shows that he is taking a contrary possession before this Court and for that reason itself that claim of the petitioner will have to be negatived. In view of the above, the writ petition has to fail and is therefore, dismissed. Sd/- **ANTONY DOMINIC, JUDGE** ln