Coir product exemption applied to coir-based by-product; organic manure classification rejected under the sales tax schedule.

A coir-based product marketed as "Neopeat" was held not to qualify as organic manure under entry 17 of the Kerala General Sales Tax Act, because it was a manufactured material made from coir pith or coir fibre dust and not manure naturally produced or derived from plants or animals. However, it was found to fall within the broader exemption for coir products under entry 24, which covers green or soaked husk, coconut fibre, coir and coir products except rubberised coir fibre foam. The exemption claim was therefore upheld, and the product was treated as not liable to sales tax.

---

---

Issues: Whether the product marketed as "Neopeat" was entitled to sales tax exemption under the Third Schedule to the Kerala General Sales Tax Act, 1963, either as organic manure under entry 17 or as a coir product under entry 24.

Analysis: The product was found to be a material made from coir pith or coir fibre dust with short fibres, and not a manure naturally produced or derived from plants or animals. It therefore did not answer the description of "organic manure" in entry 17, particularly when that expression was introduced later and was intended to cover naturally produced manure. However, entry 24 granted exemption to green or soaked husk, coconut fibre, coir and coir products, except rubberised coir fibre foam. A product substantially made from coir by-products and derived from coconut husk fell within the broad scope of that exemption, and the legislative intent was to exempt coir and coir products other than the specified exception.

Conclusion: The product was not exempt as organic manure under entry 17, but it was exempt as a coir product under entry 24. The exemption claim was therefore upheld in favour of the assessee.

Final Conclusion: The revision failed because the product was held to be covered by the coir-products exemption and not liable to sales tax.

Ratio Decidendi: A coir-based by-product, when falling within the broad expression "coir products" in the exemption schedule, is entitled to exemption unless specifically excluded by the statute.

---