IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST Rev No. 221 of 2005()
1. PREMIER TYRES LIMITED,
... Petitioner
Vs
1. STATE OF KERALA REPRESENTED BY
... Respondent
For Petitioner :SRI.M.PATHROSE MATTHAI (SR.)
For Respondent :GOVERNMENT PLEADER
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice K.T.SANKARAN
Dated :30/05/2007
O R D E R
H.L.Dattu,C.J. & K.T.Sankaran,J.
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S.T.Rev.No. 221 of 2005
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Dated, this the 30th day of May, 2007
ORDER
H.L.Dattu,C.J.
In this revision petition, we are concerned with the assessment year
1995-96. The commodity in dispute is Nylon Tyre cord fabric. The assessee, while filing
its annual return, had claimed exemption since, according to the assessee, the
commodity in which it is dealing would fall under Entry 11 of Third Schedule to the
Kerala General Sales Tax Act (“KGST Act” for short). It is apropos to notice here itself
that the commodity falling under Entry 11 of Third Schedule to the Act is exempt from
payment of tax by virtue of the provisions of Section 9 of the Act. The assessing
authority has rejected the claim and it is of the view that it is unscheduled goods and
required to be taxed under Entry 156 of First Schedule to the Act. This view of the
assessing authority is accepted by the first appellate authority. The Tribunal, to say the
least, has most mechanically accepted the views of the assessing authority and that of
the appellate authority without there being any discussion whatsoever. Aggrieved by the
said order of the Tribunal, the assessee is before us in this revision.
2. Sri.Pathros Matthai, learned Senior Counsel appearing for the
assessee would submit that the Tribunal without considering the issues, i.e., whether
the Nylon Tyre cord fabric is an item coming under Entry 11 of Third Schedule to the Act
and, therefore, exempt under Section 9 of the Act and whether the assessee is liable to
pay interest under Section 23(3) of the Act, could not have mechanically confirmed the
orders of the assessing authority and the appellate authority for the assessment year
1995-96.
S.T.Rev.No.221 of 2005 – 2 –
3. Sri.V.V.Ashokan, learned Special Government Pleader (Taxes) sought
to justify the orders passed by the Tribunal, may be knowing fully well that the said order
can never be justified.
4. We have gone through the orders passed by the Tribunal. The Tribunal
merely extracts whatever that has been said by the assessing authority and the first
appellate authority. Without any discussion whatsoever, it mechanically proceeds to
confirm the reasoning and conclusions reached by the assessing authority and the first
appellate authority. In our opinion, this is not the way in which the Tribunal is required to
decide a statutory appeal filed by an aggrieved person/assessee. Apart from this, the
Tribunal is the last fact finding authority and the Tribunal, especially when an issue
arises for consideration about exigibility or otherwise of an article/commodity it is
required and expected to apply its mind and say one way or the other, whether the
particular commodity comes under any one of the entries under the Schedule to the Act.
In the instant case, as we have already stated, the Tribunal has not even considered the
primary issue that was raised by the assessee. In view of all these, we are of the firm
view that the order passed by the Tribunal is to be interfered with and the matter
requires to be remitted back to the Tribunal for a fresh decision in accordance with law
and after affording an opportunity of hearing to both sides. Accordingly, the following:
Order
(i) The revision petition is allowed.
(ii) The orders passed by the Tribunal for the assessment year 1995-96 is set
aside.
(iii) A direction is issued to the Tribunal to decide the issue whether the Nylon
Tyre cord fabric is an item falling under Entry 11 of the Third Schedule to the
K.G.S.T.Act and whether the petitioner is liable to pay interest under Section 23(3) of
the Act in view of the orders of deferment passed by the Board for Industrial Financial
S.T.Rev.No.221 of 2005 – 3 –
Reconstruction (BIFR). While answering the aforesaid issues, the Tribunal shall afford
an opportunity of hearing to both sides. All other contentions are left open. Ordered
accordingly.
H.L.Dattu
Chief Justice
K.T.Sankaran
Judge
vku/DK.