Tax concession cannot be denied for missing shipping bill where the dealer had no control over transport compliance

Concessional tax under the first proviso to Section 6(1) of the Kerala Value Added Tax Act cannot be denied merely for non-production of a shipping bill where the dealer was not contractually responsible for transporting the goods to the Lakshadweep archipelago. The shipping bill condition is relevant where the supplier undertakes transport, but it should be construed consistently with the object of the concession and not in a way that makes compliance impossible. Production of Form No. 42 duly signed and sealed by the buyer amounts to substantial compliance with the prescribed requirement.

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Issues: Whether the concessional rate of tax under the first proviso to Section 6(1) of the Kerala Value Added Tax Act could be denied for non-production of a shipping bill duly attested by the Port authorities when the dealer had produced Form No. 42 and was not contractually responsible for transporting the goods to the Lakshadweep archipelago.

Analysis: The concessional levy was conditioned by the prescribed rules, but those conditions had to be construed to further the object of the proviso. The requirement to produce a shipping bill was relevant where the supplier itself undertook transportation to the archipelago. Where the sale obligation ended with delivery to the Store Keeper in the mainland and transportation thereafter was the responsibility of the Lakshadweep Administration, the supplier could not be expected to comply with a condition dependent on an act outside its control. The record showed production of Form No. 42 duly signed and sealed by the buyer, amounting to substantial compliance with the rule.

Conclusion: The denial of concessional rate of tax on the sole ground of non-production of the shipping bill was not sustainable, and the assessment orders were quashed with a direction to redo the assessments after granting the benefit of the concessional rate.

Ratio Decidendi: A statutory condition for availing a tax concession cannot be insisted upon in a manner that makes compliance impossible when the assessee is not responsible for the act required to satisfy that condition, provided the essential prescribed declaration is otherwise furnished.

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