IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Appl..No. 5 of 2004()
1. M/S. SOUTHERN MARKETING SERVICES,
... Petitioner
Vs
1. STATE OF KERALA, REPRESENTED BY
... Respondent
2. THE COMMISSIONER, COMMERCIAL TAXES,
For Petitioner :SRI.K.J.ABRAHAM
For Respondent :GOVERNMENT PLEADER
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice A.K.BASHEER
Dated :24/09/2008
O R D E R
H.L.DATTU, C.J. & A.K.BASHEER, J.
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S.T.A.No.5 OF 2004
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Dated this the 24th day of September 2008
JUDGMENT
H.L.DATTU, C.J.
The appellant before us is the dealer in EPABX, Electronic Push Button
Telephone and STD Call Monitor etc.
2. The appellant is also a dealer registered under the provisions of the
Kerala General Sales Tax Act (for short ‘KGST Act’) and the Central Sales Tax
Act (for short ‘CST Act’).
3. The appellant in the course of its business, imports and also effects
inter-State purchase of EPABX, Electronic Push Button Telephone and STD Call
Monitor etc. and effect sales to its various customers within the State. The items
sold by the petitioner is exigible to the levy of tax under the KGST Act.
4. Since there was some confusion with regard to the rate of tax payable on
the items sold by the petitioner, he had filed an application, dated 18-10-2001,
before the Commissioner of Commercial Taxes as envisaged under Section 59A of
KGST Act read with Rule 39 of KGST Rules for clarifying the rate of tax payable
on the sales of EPABX, Electronic Push Button Telephone and STD Call Monitor
etc.
5. Since there was some delay in disposal of the application, petitioner was
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constrained to approach this court in Writ Petition No.20362/04. This Court by its
order, dated 12th of July, 2004 disposed of the Writ Petition with a direction to the
Commissioner of Commercial Taxes to dispose of the application filed by the
petitioner for clarification within six weeks from the date of receipt of a copy of
this Court’s order.
6. The Commissioner by its order No.C3/52939/01/CT, dated 04-09-2004
has clarified that the items dealt by the petitioner would fall under Entry 55 of the
First Schedule to the KGST Act and, therefore, taxable at 8%. He has also stated
in his order that the classification under the Central Excise Tariff for the purpose
of levy of excise duty will not come in the way of interpreting specific entries in
the respective schedules under the KGST Act. It is the correctness or otherwise of
the said clarification issued by the Commissioner of Commercial Taxes is the
subject matter of this appeal.
7. Sri.K.J.Abraham, learned counsel appearing for the petitioner, has taken
us through the various chapters in the Central Excise Tariff Act and also has
referred to a number of decisions of various High Courts other than the decision of
this Court and further submits that the items sold by the petitioner requires to be
taxed only at the rate of 4% in view of several notifications issued by the State
Government.
8. Per contra, Sri.Muhammed Rafiq, learned Government Advocate, would
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inform us that the petitioner had filed an application for clarification under Section
55A of the KGST Act, but had not furnished any material particulars as required
under Rule 39D of the KGST Rules. Further, learned counsel would submit that in
spite of repeated notices issued calling upon the petitioner to produce the product
literature, same had not been produced and, therefore, the Commissioner had no
other alternative but to proceed to pass the impugned order.
9. For the purpose of disposal of this appeal, in our opinion, it may not be
necessary to refer to the provisions of Section 59A of the Act nor Rule 39D of the
KGST Rules.
10. The Commissioner of Commercial Taxes in its impugned order dated
04-09-2004, refers to the lengthy arguments advanced by the petitioner’s
representative.
11. The arguments advanced by the assessee’s representative are as under:
“It was argued that the tax rate of all goods included in the IT
policy of Government of India was reduced to 4% by virtue of the
amendment made in the SRO 1091/99 vide SRO 801/2001 w.e.f.
23-7-2001 in respect of the goods mentioned in the table attached
to the said notification. It was further argued that the goods
EPABX, Electronic push button telephones Call monitor, CVT, Fax
machine and copier machine are covered by entry 9 of the table to
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entry 13 of Schedule II to SRO 1091/99 as inserted by SRO
801/2001which read as “Electrical apparatus for line telephony or
line telegraphy, including line telephone sets with cordless and
hand sets and telecommunication apparatus for carries current
line systems or digital line systems, video phones”. It is also
contended that the entry 85.17 of the Central Excise Tariff and
entry 9 of the table referred above are one and the same. Further
he had furnished a certificate, as an expert opinion, issued by the
Director, School of Compute Science Studies, Cochin University of
Science and Technology to the effect that the above mentioned
goods will come under entry 9 of the table to SRO 1091/99 as
amended by SRO 801/2001. it was also contended that the above
view was considered by the Appellate Asst. Commissioner,
Ernakulam in disposing of the STA No.2038/2003 wherein it is
found that the said authority had arrived at a finding with regard
to the status and rate of tax on electronic push button telephones
and telephone instruments.”
12. The Commissioner of Commercial Taxes, while passing the impugned
order, has stated as under:
“EPABEX, Fax machine, STD, PCO call monitors, and CVT will
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fall under the broad classification of electronic systems,
instruments apparatus and appliances and will squarely fall under
entry 55 of 1st Schedule taxable at 8% and copier machine will fall
under entry 109 of the 1st schedule in view of specific entry,
exigible to tax at 8% during the said period. The classification
under central excise tariff for the purpose of levy of excise duty
will not stand in the way of interpreting specific entries in the
respective schedules under the KGST Act.”
13. In our opinion, the orders passed by the Commissioner of Commercial
Taxes is a non-speaking order. In our view, having referred to the lengthy
arguments advanced by the assessee’s representative, the Commissioner ought to
have atleast made a brief reference to the arguments advanced and how those
arguments are not sustainable. That exercise has not been done by the
Commissioner of Commercial Taxes while passing the impugned order, dated
04-09-04. When we say this, we only mean that there was no application of mind
by the Commissioner of Commercial Taxes to the request of the
applicant/petitioner. In our view, an order which does not contain reasons is not
only a non-speaking order but also not an order in the eye of law. Therefore, we
cannot sustain the impugned order passed by the Commissioner of Commercial
Taxes dated, 04-09-2004 and further the matter requires to be remanded to the
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Commissioner of Commercial Taxes to re-consider the application filed by the
petitioner in accordance with law after affording an opportunity of hearing to the
petitioner’s representative. Accordingly, we pass the following:
ORDER
i) S.T.A. is disposed of.
ii) The order passed by the Commissioner of Commercial Taxes
dated, 04-09-2004 is set aside.
iii) the matter is remanded to the Commissioner of Commercial
Taxes to re-consider the application filed by the petitioner in
accordance with law after affording an opportunity of hearing to
the petitioner’s representative.
iv) Petitioner’s representative is at liberty to produce all such
material which would support its case.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(A.K.BASHEER)
JUDGE
jes/sk