IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Appl..No. 13 of 2006()
1. M/S.POOJA MILK FOODS (P) LTD.,
... Petitioner
Vs
1. STATE OF KERALA,
... Respondent
For Petitioner :.
For Respondent : No Appearance
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice THOMAS P.JOSEPH
Dated :30/09/2008
O R D E R
H.L. DATTU, C.J. & THOMAS P.JOSEPH, J.
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S.T.A. No.13 OF 2006
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Dated this the 30th day of September, 2008
J U D G M E N T
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H.L. Dattu, C.J.
The legality or otherwise of the order passed by the
Commissioner of Commercial Taxes, Thiruvananthapuram
No.C3.45223/05/CT Dt.16.5.2006 is the subject matter of this Sales Tax
Appeal.
(2) The appellant before us is a company running a diary unit
with manufacturing facilities. It has established its dairy unit in Cochin. The
appellant company brings milk (raw) from outside the State, process, packs
and sells it within the State.
(3) The appellant company had filed an application under
Section 59A of the Kerala General Sales Tax Act, 1963, hereinafter for the
sake of brevity referred to as Act, 1963, inter alia requesting the
Commissioner of Commercial Taxes to clarify whether appellant’s activity is
eligible and entitled for the benefits of tax exemption under Notification
S.R.O. 201/2005 dated 16.2.2005.
(4) The Commissioner of Commercial Taxes has clarified that
the appellant’s unit is not entitled to the benefit of exemption under
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Notification S.R.O. 201/2005 dated 16.2.2005, mainly on the ground that the
appellant’s dairy unit procures milk from outside the State, process, packs and
sells it within the State. The Commissioner was of the view that the
exemption Notification is meant for those milk farmers within the State.
(5) It is this clarification issued by the Commissioner of
Commercial Taxes is the subject matter of this appeal.
(6) In order to resolve the controversy in our opinion, the
Notification issued by the State Government dated 22.3.2001 and the
subsequent Notification issued on 16.2.2005 require to be noticed. They read
as under:
“G.O.(P)No.30/2001/TD Dated, Thiruvananthapuram, 22nd March,2001
SRO No.307/2001:- In exercise of the powers
conferred by Section 10 of the Kerala General Sales
Tax Act, 1963 (15 of 1963), the Government of Kerala,
having considered it necessary in the public interest so
to do, hereby make an exemption in respect of the tax
payable under the said Act on the sale of pasteurised
milk, homogenised milk, toned milk, standardised milk,
skimmed milk, full cream milk and recombined or
reconstituted milk sold by Co-operative Societies
including Kerala Co-operative Milk Marketing
Federation Limited.
This notification shall be deemed to have been in
force from 1st day of January, 1994 till 31st day of
December, 1999.
Tax, if any, already collected shall be paid over
to Government and tax, if any, already paid shall not be
S.T. A No.13 of 2006
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refunded.
Explanatory Note
(This does not form part of the notification, but is
intended to indicate its general purport)
Government have decided to grant tax exemption for the
sale of pasteurised milk, homogenised milk, toned milk,
standardised milk, skimmed milk, full cream milk and
recombined or reconstituted milk sold by Co-operative
Societies during the period from 1st January, 1994 to
31st December, 1999.
This notification is intended to achieve the
above object.
(Kerala Gazette Extraordinary No.469 dated
24th March, 2001 Volume XLVI)
G.O.(P)NO.23/2005/TD Dated Thiruvananthapuram, 16th February, 2005
S.R.O.No.201/2005:- In exercise of the powers
conferred by Section 10 of the Kerala General Sales Tax
Act, 1963 (15 of 1963), the Government of Kerala,
having considered it necessary in public the interest so
to do, hereby make an exemption in respect of the tax
payable under the said Act on the sale of pasteurised
milk, homogenised milk, the toned milk, standardised
milk, skimmed milk, full cream milk and recombined or
reconstituted milk sold by milk producers within the
State.
This Notification shall be deemed to have been
force from the 1st day of January, 1994 till 31st
December, 1999.
Tax if any already collected shall be paid over to
Government and tax if any already paid shall not be
refunded.
S.T. A No.13 of 2006
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Explanatory Note
(This does not form part of the notification, but is
intended to indicate its general purport)
As per notification published as S.R.O.
No.307/2001 dated 22nd March 2001,the exemption from
sales tax on the sale of pasteurised milk, homogenised
milk, toned milk, standardised milk, skimmed milk, full
cream milk and recombined or reconstituted milk was
limited to co-operative societies. Government have now
decided to extend the benefit to milk producers within the
State also.
This Notification is intended to achieve the above
object.
(Kerala Gazette Extraordinary No.407 dated
23rd February 2005 Vol.L)”
(7) In the earlier Notification there was exemption from
payment of tax under the provisions of the KGST Act to the Co-operative
Societies including Kerala Milk Marketing Federation Limited on the sale of
pasteurised milk, homogenised milk, toned milk, standardised milk, skimmed
milk, full cream milk and recombined or reconstituted milk. By a subsequent
Notification this benefit is extended to all the milk producers within the State.
(8) The question now for consideration and decision is
whether the appellant’s dairy unit is entitled to get the benefit of Notification
S.R.O. No.201 of 2005 dated 16.2.2005.
(9) The State Government has issued the aforesaid
Notification under Section 10 of the KGST Act. The said Notification is
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issued in the public interest. The purport of the Notification is to grant
exemption on the sale of milk by the milk producers within the State.
(10) The admitted facts are, that the appellant is a dairy unit.
It procures milk from outside and after processing and packing, it is sold
within the State. It is like any other Co-operative Society or any other milk
producer. “Producer” means any person engaged in any activity connected
with or relatable to any primary produce. The ‘milk producer’ is not just
confined to those persons who produce the milk in the State. The Notification
is also made applicable to the Co-operative Societies, milk federations, who
collect the milk from the farmers and effects sale of such milk in the State.
The activity of the appellant is in no way different from Co-operative Societies
or milk federation. In the earlier Notification as we have already pointed out
the State Government had extended the benefit of the Notification to all the
Co-operative Societies including the Kerala Milk Marketing Federation
Limited. The benefit of that Notification came to be extended to other milk
producers in the State by a subsequent Notification dated 16.2.2005.
(11) In our opinion, since the appellant also is a milk
producer within the State though procures milk from outside is also eligible
and entitled to the benefit of the Notification S.R.O. No.201 of 2005 dated
16.2.2005. In view of the above, the Commissioner of Commercial Taxes was
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not justified in clarifying that the appellant’s dairy is not entitled to the benefit
of the Notification S.R.O. No.201/2005 dated 16.2.2005. Therefore, while
setting aside the order passed by the Commissioner of Commercial Taxes,
Thiruvananthapuram, we clarify that the appellant’s unit is also entitled to the
benefit under Notification S.R.O. No.201 of 2005 dated 16.2.2005.
Ordered accordingly.
H.L.DATTU,
CHIEF JUSTICE.
THOMAS P.JOSEPH,
JUDGE.
vsv/dk