Declared goods and tax concession limits: statutory corporation sales did not qualify for reduced tax under the notification.
G.I. pipes and fittings were not covered by the Second Schedule to the Kerala General Sales Tax Act, 1963 for assessment year 1994-95, because the entry was introduced only by the Finance Act, 1995 after earlier omission; the concessional 4% rate for declared goods was therefore unavailable. Sales made exclusively to the Kerala Water Authority also did not qualify for reduction under S.R.O. No. 1728 of 1993, because the notification applied only to Government departments and specified entities, and a statutory corporation with separate corporate identity is not a Government department merely because it may be treated as State under Article 12. The concession claim failed in full.
Issues: (i) Whether G.I. pipes and fittings sold by the assessee were declared goods falling under the Second Schedule to the Kerala General Sales Tax Act, 1963 for the relevant assessment year 1994-95 so as to attract tax at 4 per cent; (ii) Whether sales made exclusively to the Kerala Water Authority entitled the assessee to reduction in the rate of tax under S.R.O. No. 1728 of 1993.
Issue (i): Whether G.I. pipes and fittings sold by the assessee were declared goods falling under the Second Schedule to the Kerala General Sales Tax Act, 1963 for the relevant assessment year 1994-95 so as to attract tax at 4 per cent.
Analysis: The item in question was brought under the Second Schedule only by the Finance Act, 1995, after it had been omitted by the Kerala Finance Act, 1994. For the assessment year 1994-95, the item was not included in the Second Schedule. The claim to the concessional rate on the footing that the goods were declared goods was therefore unsustainable.
Conclusion: The issue was answered against the assessee.
Issue (ii): Whether sales made exclusively to the Kerala Water Authority entitled the assessee to reduction in the rate of tax under S.R.O. No. 1728 of 1993.
Analysis: The notification granted reduction only for sales to the departments of the Central Government or State Government and to the specified entities in the Fifth Schedule, subject to production of the prescribed certificate. The Kerala Water Authority, though a statutory body and capable of being treated as State for Article 12 purposes, was not a department of Government. A statutory corporation with independent corporate identity is distinct from a Government department for the purpose of the notification.
Conclusion: The issue was answered against the assessee.
Final Conclusion: The assessee was not entitled to either the claimed concessional rate as declared goods or the reduction under the notification, and the revision failed in full.
Ratio Decidendi: A statutory body possessing independent corporate identity is not a Government department merely because it may be regarded as State under Article 12 of the Constitution of India, and a tax concession limited to Government departments cannot be extended to it.
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