IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 342 of 2007()
1. STATE OF KERALA
... Petitioner
Vs
1. K.G.MOHANAN, M/S.PERFECT SMITHY
... Respondent
For Petitioner :GOVERNMENT PLEADER
For Respondent : No Appearance
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice K.SURENDRA MOHAN
Dated :02/04/2009
O R D E R
C .N. RAMACHANDRAN NAIR &
K. SURENDRA MOHAN, JJ.
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S.T. Rev. No.342 & 343 OF 2007 &
S.T. Rev. No. 1 OF 2008
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Dated this the 2nd day of April, 2009
JUDGMENT
Ramachandran Nair,J.
The question raised in the connected Revision Cases filed by the
State is whether the Tribunal was justified in holding that single
wheeled trolley which the respondent calls a “wheel barrow” is entitled
to exemption as an agricultural implement under notification SRO 1727
of 1993 modified by SRO 1094/99. We have heard Government
Pleader appearing for the petitioner and senior counsel Dr. Mohammed
Kutty appearing for the respondent.
2. Government derives authority to grant exemption on
agricultural implements specifically under Entry 4(ii) of the First
Schedule to the KGST Act, 1973 which covers only agricultural
implements. Under the above two notifications Government has
notified 40 items for exemption one of which is “manure pan”. The
question to be considered is whether single wheeled trolley
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manufactured and sold by the respondent is “manure pan”.
Government Pleader contended that the trolley manufactured and sold
by the respondent, by no stretch of imagination, can be called “manure
pan”. On the other hand, senior counsel appearing for the respondent
referred to even newspaper publications inviting tenders by Krishi
Bhavan and contended that trolley manufactured and sold by the
respondent under the name “wheel barrow” is used in farms for
carrying and distribution of manure and for transport of crop. The
photographs of the product produced in court establish beyond doubt
that the item is a trolley with handles on either side and has an inflated
wheel in the front and two legs behind. It is an item made fully of iron
and steel and can carry quite sizable quantity of materials. Even if it is
fit for use in the farm it is mostly seen used at construction sites for
movement of materials. Of course it could be used for agricultural
purposes by farmers who have road facility in their Farm or whose
farm is level-land. We are of the view that the item is fit for use for
various purposes and it can be used for agricultural purposes in farms
also. However this does not entitle the item for exemption because
only notified agricultural implements are entitled to exemption under
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Entry 4(ii) of First Schedule to the Act. “Pan” is nothing but a vessel
which may be made of metal, earthenware, plastic or any other material
which is generally broad and shallow used for domestic purposes.
“Manure Pan” mentioned in the notification therefore can be only a pan
used to administer manure to plants. We are of the view that single
wheeled trolley which is used for carrying sizable quantity of material
is not intended as a “manure pan” by the Government while issuing the
notification. The value of wheel barrow manufactured and sold by the
respondent ranges from Rs. 1750 to Rs. 1850 during the relevant years,
whereas the value of the items enumerated in the list of 40 items
notified by the Government does exceed Rs. 100 or Rs. 150/-. A high
value product of this type fit for various purposes is not intended to be
covered by notification. Therefore we are of the view that the Tribunal
clearly went wrong in holding that single wheeled trolley manufactured
and sold by the respondent and styled as wheel barrow is an
agricultural implement covered by the notification. We therefore
reverse the orders of the Tribunal and that of the first appellate
authority and restore the assessments.
Senior counsel appearing for the respondent expressed financial
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problems that the unit is going to face on account of this judgment. He
has also referred to the clarification issued by the Commissioner which
is only in 2004 clarifying that the item does not qualify for exemption.
There is a bona fide dispute about exemption is clear from the
favourable orders of the appellate authorities at two levels. We feel, it
is a fit case for exonerating the respondent from interest burden. We
therefore waive complete interest payable by the respondent under
Section 23(3) or 23(3A) read with Section 23 (3B) but on condition
that respondent will clear the arrears of tax within a period of three
months from now.
Tax Revisions are allowed as above.
(C.N.RAMACHANDRAN NAIR)
Judge.
(K. SURENDRA MOHAN)
Judge.
kk
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