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of <h1>Court denies sales tax exemption to company engaged in latex production; raw rubber & centrifuged latex deemed same.</h1> <h3>Padinjarekara Agencies Limited Versus State of Kerala</h3> The High Court upheld the decisions of the lower authorities, denying a public limited company engaged in centrifuged latex production sales tax exemption ... - Issues involved: Interpretation of Government Notifications u/s S.R.O. No. 1727/1993 and S.R.O. No. 1728 of 1993 for sales tax exemption for an industrial unit engaged in manufacturing activity.The judgment addresses the case of a public limited company engaged in the production and sale of centrifuged latex, claiming exemption under S.R.O. No. 1727/93 for assessment years after April 1, 1988. The assessing authority rejected the claim based on the view that raw rubber latex and centrifuged latex are the same commodity, thus no manufacturing activity is involved. The petitioner's appeals were dismissed by the Kerala Sales Tax Appellate Tribunal, leading to revision petitions filed u/s 41 of the KGST Act before the High Court.The questions of law raised for consideration were whether the Tribunal erred in denying the petitioner the benefit of the government notifications and whether the petitioner was entitled to such benefits based on relevant judgments. The court outlined the revisional powers u/s 41 of the Act, emphasizing the scope of review limited to deciding questions of law.The court considered arguments regarding the Commissioner's power to grant exemptions, the binding nature of circulars/instructions, and changes in tax entries post-April 1, 1988. It was noted that the Commissioner's clarification deemed raw rubber and centrifuged latex as the same commodity, leading to the denial of the petitioner's claim under S.R.O. No. 1727/93. The court upheld the decisions of the lower authorities and concluded that the petitioner could not avail the exemption due to the absence of manufacturing activity as per the revised tax entries and circulars.Ultimately, the court rejected the revision petitions, granting the petitioner liberty to challenge the circular/directions issued by the Commissioner in a separate proceeding if desired, without causing prejudice to the Revenue.
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