IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST Rev No. 103 of 2003()
1. M.D.JOSEPH, ASOK LIME AND BLEACHER'S
... Petitioner
Vs
1. STATE OF KERALA, REPRESENTED BY
... Respondent
For Petitioner :SRI.K.B.MUHAMED KUTTY
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice K.M.JOSEPH
Dated :21/07/2006
O R D E R
C.N. RAMACHANDRAN NAIR &
K. M. JOSEPH, JJ.
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S.T.(REV) NOS.103/03, 105/03 & 133/03
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Dated this the 21st day of July, 2006
JUDGMENT
C. N. Ramachandran Nair, J.
Common question arising in all these three cases
pertaining to the petitioner’s sales tax assessments for the years
1994-95, 1995-96 and 1996-97, is whether the produce
manufactured and sold by petitioner, namely bleaching powder,
is assessable as “chemical” under Entry 29 of the First Schedule
to the KGST Act, taxable at 10 per cent at the point of first sale
in the State, or whether it falls under “Lime and Dehydrated
lime” taxable at the reduced rate of 2.5 per cent under Entry 28
of IInd Schedule of Notification SRO No.1728/93 as claimed by
the petitioner. We have heard Dr.K. B. Mohamed Kutty, learned
senior counsel appearing for the petitioner and the learned
Special Government Pleader appearing for the respondent.
2. Petitioner is engaged in the manufacture and sale of
bleaching powder. The lion share of the production, according
STRV. 103, 105 & 133/03 2
to petitioner, was sold to Kerala Water Authority for treatment
of water supplied for drinking purpose. According to petitioner,
the item is essentially made of lime, though not lime as such
and, therefore, the same is entitled to concessional rate of tax at
2.5 per cent under the Notification above referred. On the other
hand, learned Special Government Pleader appearing for the
respondent contended that the Notification provides for
concessional rate of tax only on lime and dehydrated lime, and
not for any products made out of lime.
3. The first question to be considered is whether the item
comes within the description of “lime and dehydrated lime”
under the Notification above referred. The manufacturing
activity of the product as explained by the tribunal in its order,
which is not in dispute, is as follows:
“Bleaching powder is known as chloride of lime
and is a compound of Calcium, Chlorine and Oxygen
(Ca COCL). As per Encyclopaedia Britannica,
bleaching powder, also known as chloride of lime, is a
white solid having the odour of chlorine. It is formed
by the combination of chlorine with slaked lime and is
used as a bleaching and disinfecting agent.”
STRV. 103, 105 & 133/03 3
It is obvious from the above that bleaching powder is not lime or
dehydrated lime as claimed by petitioner. On the other hand, it
is a chemical compound constituting of Calcium, Chlorine and
Oxygen. The other name of bleaching powder, namely
chloride of lime obviously indicates that lime is a major
constituent of the product. However, what is covered by the
Notification is admittedly lime and dehydrated lime which are
one and the same and difference being that in the latter item,
moisture is not present. By no means, the product bleaching
powder can be identified as lime pure and simple. In the course
of manufacturing, it obviously undergoes a change involving
loss of identity of lime and what emerges is a new product with
different odour and charactoristics. In fact, the chlorine content
is what gives it the capacity to act as a disinfecting agent. In this
view of the matter, we are in complete agreement with the
finding of the tribunal that bleaching powder cannot be treated
as lime or dehydrated lime within the meaning of the
Notification above referred, entitling the petitioner for
STRV. 103, 105 & 133/03 4
concessional rate of tax on its sale.
4. The next question raised is whether the item can be
treated as a chemical falling under Entry 29 of the Ist Schedule
to the KGST Act. In this connection, we extract hereunder
Entry 29 as provided in the Schedule at the relevant time:
"29. Chemicals including At the point of
caustic soda, caus- first sale in the 10"
stic potash, soda State by a
ash, sodium sulphate, dealer who is
sodium silicate, liable to tax
sulphur, chemical under Section
components and 5.
mixtures not else-
where classified in
this schedule.
The tribunal has extracted the meaning of the term “Chemical”
as contained in the new Webster’s Dictionary of English
Language, as “a substance produced by or used in a chemical
process”. It is clear from the manufacturing process that
bleaching powder is a chemical product manufactured from out
of chemicals in a factory. In fact, petitioner himself is running a
STRV. 103, 105 & 133/03 5
factory manufacturing bleaching powder with the use of
chlorine, lime, water, etc. Therefore, petitioner cannot deny the
process in the manufacture of bleaching powder as anything
different from a chemical process. The product, therefore,
answers the Dictionary meaning of “chemical” as stated above.
Besides this, in common parlance also, we do not think that
anyone can treat bleaching powder as an item other than a
chemical. Even though it may be used as a disinfectant in water
purification, the same does not lead to the conclusion that it is
not a chemical. In fact, it is common knowledge that excess
chlorine escapes from water when bleaching powder is added
for purification. The indication in the Schedule above makes it
clear that apart from the generally known chemicals, even
chemical components and mixtures not else-where mentioned in
the Schedule are covered therein. In fact, Entry 29 is a residuary
entry for all chemicals except those specifically mentioned else-
where in the Ist Schedule to the KGST Act. In this view of the
matter, we uphold the finding of the tribunal that the product
STRV. 103, 105 & 133/03 6
manufactured and sold by petitioner, namely bleaching powder
answers the description of “chemical” under Entry 29 of the Ist
Schedule taxable at ten per cent. However, it is open to the
petitioner to claim the benefit of concessional rate, if available,
for supply to organisations like Water Authority, Government
Department, etc. Therefore, the Tax Revision Cases are
dismissed.
C.N. RAMACHANDRAN NAIR, JUDGE
K. M. JOSEPH, JUDGE
kbk.
C.N. RAMACHANDRAN NAIR &
K. M. JOSEPH, JJ.
S.T.REV.NOS.103/03,
105/03 & 133/03
JUDGMENT
21st July, 2006.