Poultry exemption limited to locally produced chicks and chicken; outside-state purchases remained taxable, and later clarification confirmed scope.

An exemption for a poultry farmer or hatchery in the State was confined to turnover from chicks raised and chicken reared in that State; sales of chicks and chicken brought from outside Kerala did not qualify. The court reasoned that the notification treated the dealer as a producer engaged in poultry farming or hatchery operations, not as an ordinary trader, and extending the exemption to outside-sourced goods would create an anomalous advantage. The later notification was treated as clarificatory of the original exemption, not as imposing a fresh condition, and the assessment on the disputed turnover was upheld in favour of the Revenue.

---

---

Issues: Whether the sales turnover of chicks and chicken brought from outside the State and sold in Kerala by a poultry farmer or hatchery in the State was entitled to exemption under Notification S.R.O. No. 1727 of 1993, and whether Notification S.R.O. No. 291 of 2000 was merely clarificatory or imposed a fresh condition.

Analysis: The exemption was held to be available only to the turnover of chicks raised in hatcheries and chicken reared in poultry farms maintained in the State, because the notification treated the dealer as a poultry farmer or hatchery engaged in production and not as an ordinary trader. Accepting exemption for goods sourced from outside the State would create an anomalous discrimination, allowing a nominal farm to conduct tax-free trading while an independent trader carrying on the same activity would remain taxable. On that construction, the later notification was treated as clarificatory of the original exemption and not as introducing a new restriction.

Conclusion: The exemption did not extend to sales turnover of chicks and chicken brought from outside Kerala and sold in the State. The Tribunal's view was set aside and the assessment on that turnover was upheld in favour of the Revenue.

Ratio Decidendi: An exemption notification granted to a poultry farmer or hatchery in the State covers only the turnover arising from chicks and chicken produced or reared in that State, and a later notification clarifying that position does not create a new condition but confirms the original scope of exemption.

---