IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 32444 of 2007(K)
1. CHIDAMBARAM TEA ESTATE,
... Petitioner
Vs
1. SALES TAX OFFICER,
... Respondent
2. DEPUTY COMMISSIONER(APPEALS)
For Petitioner :SRI.JOSEPH MARKOSE (SR.)
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice K.M.JOSEPH
Dated :08/07/2008
O R D E R
K. M. JOSEPH, J.
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W.P.C. NO. 32444 OF 2007 K
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Dated this the 8th July, 2008
JUDGMENT
Petitioner challenges Exts.P6 and P6(a). Exts. P6 and P6
(a) are revised assessment orders passed in relation to the
petitioner under the KGST Act pursuant to Ext.P5 order passed
by the Appellate Tribunal.
2. Briefly put, the case of the petitioner is as follows:
Petitioner is a planter. The tea belonging to the petitioner
was sold in the auction held at Kochi. Petitioner engages
brokers who sell the tea. Under the KGST Act liability is cast
on the seller of tea at the point of first sale in the State by dealer
liable to pay tax. Tax is leviable at eight per cent. According
to petitioner, for a long period of time, the practice which was
obtaining was that in respect of the tea sold at Kochi auction, tax
is being assessed at the hands of the auctioneers/brokers on
condition that they give a Certificate to the effect that the tea
which has been sold in the auction as being exported. The tea
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planters were being exempted from payment of tax in respect of
the export turnover on the basis of the Certificate given by the
auctioneers/brokers. For the assessment years 2002 – 2003 and
2003 – 2004, the claim for exemption came to be rejected. SRO
No.691/99 came to be issued. Therein also, tea sold for export
came to be exempted on fulfillment of three conditions. one of
the conditions was that a Certificate in Annexure II be produced
by the seller. Petitioner did not produce the Certificate in
Annexure II as required in the Notification in 1999. It was
consequently that exemption was rejected. In Appeal, the
Tribunal by Ext.P5, took note of the subsequent Notifications
issued under Section 10 which is produced as Ext.P3. In Ext.P3,
the Government apparently taking note of the position obtaining
in the past, ordered exemption of tea sold for export on
condition that Certificate is issued by the auctioneer/broker to
the effect that he has paid the entire tax and also undertakes to
clear any liability. Referring to the subsequent Notifications
issued in 2006, by Ext.P5, the Tribunal took the view that in
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respect of the assessment years 2002 – 2003 and 2003 – 2004,
Certificate of the petitioner must be accepted and order passed
in accordance with law. Exemption has been denied. It is
thereupon that Exts.P6 and P6(a) came to be passed. Petitioner
has preferred Appeals.
3. I heard Shri Joseph Markos, learned senior counsel
appearing for the petitioner and also the learned Government
Pleader. Learned senior counsel for petitioner would submit
that the Tribunal having directed the assessing authority to
accept the Certificate, the assessing authority has acted illegally
and it was not correct in denying exemption. The denial of
exemption in Exts.P6 and P6(a) orders is for the reason that
while the petitioner has produced Ext.P1 Certificates from the
broker for both the years, there is no undertaking in the
Certificates that the broker would pay any tax, if any liability
arises in terms of Ext.P3 Notification. It is for this reason that
exemption has been apparently denied to the petitioner.
According to the petitioner, the denial of exemption should not
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be sustained as it is too technical. He would submit that when
once the broker has certified that he had paid the tax, it is illegal
to deny the benefit of exemption. He would also refer to Rule
9k of the KGST Rules to contend that when once an agent has
been assessed, the principal cannot be taxed all over again and
that would amount to levying tax twice, which is impermissible
in law.
4. Per contra, learned Government Pleader would submit
that it is legally sustainable. I would think that having regard to
the fact that the petitioner has preferred Appeals which are
pending since October, 2007, petitioner can pursue the appellate
remedy. In such circumstances, the Writ Petition is disposed of
directing that recovery proceedings initiated against the
petitioner pursuant to Exts.P6 and P6(a) shall stand stayed on
condition that the petitioner deposits twenty per cent of the
amount demanded within a period of one month from today.
Sd/=
K. M. JOSEPH, JUDGE
kbk.
// True copy// PS to Judge WPC.32444/07 K 5