TaxTMI 
TaxTMI 
2007 (12) TMI 424
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....edule, having considered it necessary in public interest, has issued Notification S.R.O. No. 1729 of 1993, granting tax exemptions to industrial units and/or reduction in the rate of tax payable on the sale or purchase, as the case may be, of goods by such industrial units, subject to conditions and restrictions specified in the notification. By S.R.O. No. 404 of 1994, clause (x) is inserted in the notification with effect from April 1, 1994. Clause (x) of the Explanation envisages certain industries which are not eligible for concession under the notification. Clause (x) is as under: "Industrial units manufacturing the following items shall not be eligible for the concessions under this notification:- (a) Biscuits (b) Cement paints (c) Packing cases, tea chests, plywoods, splints, veneers, wooden crates and wooden cable drums (d) Bricks and tiles Provided that existing units manufacturing biscuits which undertook expansion, modernisation, or diversification on or after January 1, 1994 but prior to January 1, 2000 shall be eligible for the concession under the notification." In order to claim exemption from payment of tax pursuant to the aforesaid notification, the assessee....
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....ce dated March 3, 2003, inter alia, proposing to disallow the claim both on intra and inter-State sales of plywood while completing the assessments for both the years both under the KGST and the CST Acts and also had made known to the assessee that it would be eligible to tax exemption only for sale of block board and flush board. The assessee, after receipt of the pre-assessment notice, had filed its reply, by its reply letter dated March 12, 2003 justifying the claim for exemption made in the annual returns filed based on the order passed by the District Level Committee dated April 18, 1996. The assessing authority after receipt of the reply so filed, by his communication dated April 4, 2003 addressed to the District Level Committee, had made a request to re-examine the sales tax exemption granted to the petitioner's unit, on the ground that the sales tax exemption granted to the unit is irregular and improper, since the product plywood is in the negative list with effect from April 1, 1994 as per S.R.O. No. 404 of 1994. The District Level Committee, after examining the request made by the assessing authority, in its meeting held on June 26, 2003 has formed an opinion that....
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.... and CST Acts, for both the assessment years and thereby has rejected the claim for exemption from payment of tax on the sale of plywoods. In the appeal filed, the first appellate authority had accepted the claim of the assessee. The Revenue being aggrieved by the orders passed by the first appellate authority had filed appeals before the Sales Tax Appellate Tribunal in T.A. Nos. 404 of 2003 and 405 of 2003. The petitioner-SSI unit had also filed cross-objection in C.O. Nos. 34 of 2003 and 35 of 2003. The Tribunal by its common order dated 12th day of May 2004, has allowed the Revenue's appeals and has rejected the assessee's cross-objections. The assessee being aggrieved by the order passed by the Tribunal has presented these four tax revision cases for the assessment years 1997-98 and 1998-99 both under the KGST and CST Acts. The assessee has framed the following questions of law for our consideration and decision. They are: "1. Was the Appellate Tribunal justified in holding that the assessee is not entitled for exemption on the sales turnover of plywood? Can benefit already enjoyed be taken away at a later stage, to become prejudicial to the petitioner? 2......
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....he question whether he has collected it from customers or not is of no consequence. His liability is by virtue of being an assessee under the Act. [American Remedies Pvt. Ltd. v. Government of Andhra Pradesh [1999] 113 STC 400]. Keeping in view these well-settled legal principles, let us now advert to the fact-situation in the present case. The facts which are not in dispute nor can be disputed are, the assessee is a proprietory concern running a smallscale industrial unit in the name and style of M/s. Nina Boards, Andoor. It is engaged in the manufacture and sale of block boards, flush boards and plywoods. The State Government in exercise of the powers conferred by section 10 of the Kerala General Sales Tax Act, in the public interest has issued notification S.R.O. No. 1729 of 1993, granting tax exemption to industrial units and/or reduction in the rate of tax payable on the sale or purchase as the case may be of goods by such industrial units, subject to certain conditions and restrictions. It only means that the tax exemption is granted to industrial units on the sale or purchase of goods by such industrial units. This notification is made applicable to small-scale ind....
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....ption from payment of tax under the Act. The error so committed is rectified by the District Level Committee by amending its earlier order at the instance of Additional Sales Tax Officer, who by his letter dated April 4, 2003, had requested the District Level Committee to re-examine the sales tax exemption granted to the petitioner's industrial unit on the sales of plywood manufactured and sold by the industrial unit on the ground that the exemption so granted is contrary to the conditions prescribed in the notification, S.R.O. No. 404 of 1994, wherein the manufacture and sale of plywood is placed in the negative list. The learned counsel Sri Dale P. Kurian would submit that the objection for granting exemption to the manufacture and sale of plywoods by the petitioner's industrial unit was raised for the first time in the year 2003 by the assessing authority before the District Level Committee and the formal order came to be passed by the Committee only on August 2, 2003 and therefore, the initiation for cancellation of the exemption itself was well beyond the exemption period of seven years and therefore, the assessing authority was not justified to rake up a dead issue w....
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....39;s unit from passing on the tax burden on the consumer. A similar argument was advanced in the case of J.K. Jute Mills Co. Ltd. [1961] 12 STC 429 (SC) and was repelled by the apex court in the following words (page 437): "And then it is argued that a sales tax being an indirect tax, the seller who pays that tax has the right to pass it on to the consumer, that a law which imposes a sales tax long after the sales had taken place deprives him of that right, that retrospective operation is, in consequence, an incident inconsistent with the true character of a sales tax law, and that the Validation Act is therefore not a law in respect of tax on the sale of goods, as recognised, and it is ultra vires entry 54. We see no force in this contention. It is no doubt true that a sales tax is, according to accepted notions, intended to be passed on to the buyer, and provisions authorising and regulating the collection of sales tax by the seller from the purchaser are a usual feature of sales tax legislation. But it is not an essential characteristic of a sales tax that the seller must have the right to pass it on to the consumer, nor is the power of the Legislature to impose a tax on sales ....
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.... burden on his customers and, therefore, the order passed by the District Level Committee is illegal cannot be accepted. The learned counsel, Sri Dale P. Kurian, would further contend that the assessing authority could not have denied exemption to the petitioner's industrial unit while completing the assessments for the assessment years 1997-98 and 1998-99 vide his order dated March 17, 2003, in view of the order passed by the District Level Committee dated April 18, 1996, which came to be amended only on August 2, 2003. In aid of his submission, the learned counsel would rely on the observations made by the apex court in the case of Vadilal Chemicals Ltd. v. State of Andhra Pradesh [2005] 142 STC 76. The issue before the apex court in the aforesaid decision was whether the appellant is entitled to exemption from payment of sales tax under the Andhra Pradesh General Sales Tax Act, 1957 as notified by G.O. (MS) No. 117 dated March 17, 1963. While deciding this issue, the court was pleased to observe that under the incentive scheme there was only one method of verifying the eligibility for the various incentives granted including sales tax exemption. The procedure was for the m....
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.... of Goa v. Colfax Laboratories Ltd. AIR 2004 SC 45. In the said decision, the court has observed: "In the instant case the manufacturer had licence to manufacture after-shave lotions, ASLs as toilet preparations. Till the end of the year 1984 excise duty on ASLs was paid on the basis that it was a toilet preparation. On January 14, 1985 Colfax manufacturer moved an application before the Commissioner of Excise, for reclassification ASL as a 'medicinal preparation' for the purpose of levy of excise duty. The Excise Commissioner vide his order dated March 23, 1985 classified the same as 'medicinal preparation.' Held, there being no provision for a prior classification of product under the Act and the Rules made thereunder the entire proceedings commenced on the basis of the application given by Colfax and culminating with the order of the Commissioner of Excises are wholly without jurisdiction. The order passed by the Commissioner of Excise on March 23, 1985 being without jurisdiction is a nullity in the eyes of law and would be liable to be ignored." The learned counsel for the Revenue also relies on the observation made by this court in the case of Teejan Beverag....
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.... jurisdiction'. 'Jurisdiction', in this context, means simply 'power', though sometimes it bears the slightly narrower sense of 'power to decide', e.g., as applied to statutory tribunals. It is a word to which the courts have given different meanings in different contexts, and with which they have created a certain amount of confusion. But this cannot be explained intelligibly except in the particular contexts where difficulties have been made. Nor should the difficulties be exaggerated. For general purposes 'jurisdiction' may be translated as 'power' with very little risk of inaccuracy. Any administrative act or order which is ultra vires or outside jurisdiction is void in law, i.e., deprived of legal effect. This is because in order to be valid it needs statutory authorisation, and if it is not within the powers given by the Act, it has no legal leg to stand on. The court will then quash it or declare it to be unlawful or prohibit any action to enforce it. The terminology here depends to some extent on the remedy granted. 'Quashing' is used in connection with the remedy of certiorari. A declaratory judgment is an alternative r....
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....ontrol Act, 1947 and therefore, in excess of its jurisdiction." In re. Hari Prasad Mulshanker Trivedi's case [1974] 3 SCC 415, the Supreme Courts has stated: "Though the dividing line between lack of jurisdiction or power and erroneous exercise of it has become thin, the distinction between the two has not been completely wiped out. It is true that there is difficulty in formulating an exhaustive rule to tell when there is lack of power and when there is an erroneous exercise of it. The difficulty has arisen because the word 'jurisdiction' is an expression which is used in a variety of senses and takes its colour from its context. Whereas the 'pure' theory of jurisdiction would reduce jurisdictional control to a vanishing point, the adoption of a narrower meaning might result in a more useful legal concept even though the formal structure of law may lose something of its logical symmetry. . ." The present case is a case of want of jurisdiction and not one of irregular assumption of jurisdiction. We say so for the reason, that under the notification the District Level Committee is authorised to determine, whether a particular industry manufacturing a particula....