TaxTMI 
TaxTMI 
2020 (1) TMI 579
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....urnace oil, lubricant etc. as industrial raw material/component parts sold to industrial units for use in production. Annexure A, dated 14.3.2008 is the order of assessment passed by the Assistant Commissioner. Subsequently, on verification of records, it was found that M/s.BSES Kerala Power Ltd. and Kasargod Power Corporation cannot be treated as a power generating undertakings in the joint sector and that concessional rate of tax is not applicable with respect to sale made to them. Further, it was found that the claim of concessional rate of tax at 3% for sale of furnace oil, lubricant etc. cannot be allowed since those commodities are not used as industrial raw materials, but as fuel. The Deputy Commissioner of Commercial Tax, Ernakulam set aside the assessment order by invoking the suo motu revisional power, under Section 35 of the Kerala General Sales Tax Act (for short, 'the KGST Act') by Annexure B proceedings, dated 29.2.2012. 3. The relevant finding in Annexure B is that, the guidelines issued by the Government of India about formation and functioning of joint sector undertakings stipulates that, the distribution of equity ownership should be 26% by the Governme....
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....y Commissioner under Section 35 of the KGST Act has set aside the order of the assessing authority. In view of the decision of this Tribunal in T.A.No.9/2012 dated 29th June 2013, we set aside the order of the Deputy Commissioner and restore the order of the assessing officer. The next issue is with regard to disallowance of reduced rate of tax as per Form 18 declarations filed by the assessee. On further verification of records and considering the nature of products manufactured, it is revealed that the products sold were not industrial raw materials component part or packing materials but only consumables and thus taxable at 24%. Therefore, the incorrect rate of tax adopted by the assessing officer had resulted in a short levy of Rs. 10,14,155/- and the assessment thus completed is detrimental to revenue. Therefore, the Deputy Commissioner has, by invoking his powers under Section 35 of the KGST Act, set aside the order of the assessing authority. The contention of the assessee is that in view of the decision of the High Court of Kerala in Essar Oil Ltd Vs. State of Kerala reported in 37 VST 192, they are eligible for concessional rate of tax on the basis of Form 18 decl....
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....er Ltd. is a private sector undertaking and the sale made to it would not make the assessee eligible for concessional rate of tax. 7. With regard to the rate of tax of furnace oil/lubricant etc., it is contended that the said products are not utilised as raw materials and are used only as fuel by the purchasing industrial undertakings. Relying on a decision of the Apex Court in Coastal Chemicals Ltd. v. Commercial Tax Officer, A.P. and others [(1999) 8 SCC 465], the learned Senior Government Pleader contended that the material used as fuel is not consumed for the manufacture of other goods and that to justify the claim for reduction in the rate of tax it must be shown that the material for which concession is sought is used as raw material for the production of the end material and not merely as fuel. In Coastal Chemicals Ltd., the Apex Court held that where the provision provided for concessional rate in respect of component parts, natural gas which is used as fuel cannot be held to be entitled for the said concessional rate. Relying on the decision of the Apex Court in CST v. Thomas Stephen & Co. Ltd. [(1988) 2 SCC 264] it was held that fuel is not consumed for the production ....
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.... places reliance on the decisions of this Court in Essar Oil Limited v. Intelligence Officer (Investigation Branch), Department of Commercial Taxes, Koch and others [(2011) 37 VST 192 (Ker)] and The Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Bharat Refineries Limited, Madras [STC Vol.42 (Ker.) 225]. It is contended that the sale was made on the basis of a valid declaration as provided in the proviso to sub-section (3) of Section 5 in Form No.18. It is therefore contended that the burden to show that the material was actually used in the manufacture of the end product is on the purchaser. It is stated that in view of the fact that the assessee had acted only in accordance with the declaration given by the purchaser, it would be the burden of the purchaser to prove as to the use that the material is put to, and in such circumstances, the assessee cannot be denied the benefit which has been availed on the basis of such declaration. 10. We have considered the contentions advanced. With regard to the finding that BSES Kerala Power Ltd. is a joint sector undertaking, the issue was decided in favour of the assessee by the Tribunal in respect of the a....