M/S. Damodar Cashew Co vs State Of Kerala on 9 June, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

ST.Rev..No. 118 of 2009()


1. M/S. DAMODAR CASHEW CO.,
                      ...  Petitioner

                        Vs



1. STATE OF KERALA.
                       ...       Respondent

                For Petitioner  :SRI.ARIKKAT VIJAYAN MENON

                For Respondent  : No Appearance

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice C.K.ABDUL REHIM

 Dated :09/06/2009

 O R D E R
                    C.N.RAMACHANDRAN NAIR &
                            C.K.ABDUL REHIM, JJ.
               ....................................................................
                     S.T.Rev. Nos.118 & 120 of 2009
               ....................................................................
                   Dated this the 9th day of June, 2009.

                                          ORDER

Ramachandran Nair, J.

Question raised in the connected revisions filed by the very same

assessee is whether Tribunal was justified in limiting the exemption on

Central Sales Tax payable under Notification SRO 1730/1993 subject

to the ceiling provided in the certificate of exemption issued under

SRO 1729/1993. Assessee set up a new cashew factory for processing

raw cashew nut to cashew kernel. The product is sold locally, interstate

and in export. Under SRO 1729/93 assessee was issued a certificate

granting exemption for a period of seven years subject to certain

limitations based on investment. While granting exemption for the tax

payable under the KGST Act and under CST Act, the Assessing Officer

applied the ceiling which was based on investment. Assessee’s case

was that SRO 1730/93 issued under Section 8(5) of the CST Act is an

absolute exemption under which assessee is entitled to tax exemption

under the CST Act for a period of seven years from the date of

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commencement of production. However, the assessing authority after

referring to the notification, rejected the claim because exemption

granted under SRO 1730/93 is specifically subject to the conditions and

restrictions contained in SRO 1729/93 under which certificate of

exemption was issued to the assessee. This was confirmed by the

Tribunal against which these revisions are filed. We have heard

counsel for the petitioner and Government Pleader for the respondents.

2. We do not find any justification to interfere with the Tribunal’s

order because exemption granted under SRO 1730/93 is not absolutely

for a period of seven years as claimed by the assessee. On the other

hand, exemption granted under SRO 1730/93, though issued under

Section 8(5) of the CST Act, is subject to the restrictions contained in

SRO 1729/93 by which exemption is limited to 100% of investment in

plant and machinery and land. It is within the powers of the

Government to combine incentives both under Central Act as well as

State Act. In fact, this is exactly what is done under the two

notifications by the Government, by which exemption was limited to

the ceiling provided in the certificate issued to the assessee which is not

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under challenge. In the circumstances, S.T. Revision cases are

dismissed.

C.N.RAMACHANDRAN NAIR
Judge

C.K.ABDUL REHIM
Judge
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