SEZ sales tax exemption for ready-mix concrete upheld where statutory exemption covered supply to the developer

Sales of ready-mix concrete to a Special Economic Zone developer were held to fall within the State's exemption regime, because the claim rested on G.O.Ms.No.193 dated 30.12.2006, as reiterated by Circular No.25 of 2014 and the notification dated 29.01.2016, which exempt sales to a registered dealer for setting up, operation or maintenance of a unit in an SEZ or for development, operation and maintenance of the SEZ by the developer. The assessing authority wrongly rejected the claim on a zero-rating analysis and on a decision based on a different legal foundation. The assessment orders were therefore interfered with and remitted for fresh consideration in accordance with law.

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Issues: Whether the petitioner was entitled to exemption from tax on sales of ready-mix concrete supplied to a developer of a Special Economic Zone.

Analysis: The assessment orders proceeded on the footing that the transactions were not eligible for zero rating and relied on an earlier decision dealing with a different legal basis. The Court held that the petitioner's claim was founded on the exemption granted by the State Government under G.O.Ms.No.193 dated 30.12.2006, as reiterated by Circular No.25 of 2014 and the notification dated 29.01.2016, which recognized exemption for sales to a registered dealer for setting up, operation or maintenance of a unit in a Special Economic Zone or for development, operation and maintenance of the Special Economic Zone by the developer. The Court accepted that the transaction fell within the exempted category and that the assessing authority had misdirected itself in rejecting the claim.

Conclusion: The assessee was entitled to the exemption, and the assessment orders were liable to be interfered with and remitted for fresh consideration in accordance with law.

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