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2014 (9) TMI 370 - KERALA HIGH COURTSSI exemption - Whether the concessional rate of tax confined to the products manufactured by the "SSI units, registered in the State of Kerala" alone, under entry 6 of Schedule II of SRO No. 1091 of 1999, is discriminatory and violative of articles 301, 302 and 304(a) of the Constitution of India - Held that:- stipulation under article 301 of the Constitution of India is not an absolute one, but is subject to the other provisions of Part XIII, i.e., articles 302, 303 and 304 as well. Obviously, article 304 starts with a "nonobstante clause", carving out the exemption thereunder, enabling the State to have a different approach and course to meet the situation by necessary enactments. Section 10 of the KGST Act enables the State to exempt, a class of persons/category. The exemption stands confined only to such industries, who are registered with the Director of Industries and Commerce in the State as aforesaid, and it is with the intent to achieve a definite purpose to promote the social and economic scene and procure more employment opportunities within the State. - the challenge raised by the petitioners, in respect of "entry No. 6" of Schedule II to SRO No. 1091/1999, to the extent the same confines the concession in the rate of tax only for the products manufactured by the small-scale industrial units within the State and having registration with the Directorate of Industries and Commerce of Kerala, stands repelled. - Decided against the assessee. Whether the product "soda maker" manufactured and marketed by the petitioners comes within "entry 116" attracting a tax liability at 12 per cent or whether it comes under the residuary clause under "entry 177", with a lesser tax of eight per cent - Held that:- It is true that the assessment in respect of the assessment years 2000-01, 2001-02 in the case of the petitioner was completed treating "soda maker" under "residuary entry 177", with the rate of tax payable at eight per cent. But later, it came to the notice of the Department that the actual rate of tax payable by the petitioner was 12 per cent as the item "soda maker" very much constituted an item scheduled under "entry 116" of the First Schedule, leading to exhibits P4/P4(a) notices issued by the fast track team, proposing assessment under section 17D of the KGST Act. Going by the items listed under entry No. 116 of the First Schedule to the KGST Act, it is to be noted that the scope of the entry has been much widened, by virtue of the relevant amendments, at different points of time. So also, it is to be noted that the idea and understanding of the petitioner, that the items grouped under entry No. 116 are those, which are primarily connected with "cooking in the kitchen" and hence the term "similar home appliances" cannot take in "soda maker" is only wrong and misconceived. Under entry No. 104 as it existed in 1992-94 and thereafter till 2000, "water filter" was also one of the home appliances as included therein, attracting the tax liability at the prescribed rate, which in fact is in no way connected with cooking in kitchen, nor solely allocable for user in kitchen. In the year 2000 and afterwards, some other additional items were also included under the said entry. The petitioner-company themselves have described their product as "home soda maker" and hence it cannot but be a home appliance. This is more so, when, the "home soda maker" cannot have any application/utility other than the home use, as it is an alien product, so far as any commercial use is concerned. Applying the rule of harmonious interpretation and the principle of "ejusdem generis", the term "similar home appliances" in entry No. 116 of the First Schedule to the KGST Act very much takes in a "home soda maker" as well and it is liable to be treated as a classified item, attracting the tax at the rate as prescribed. The product "soda maker"/"home soda maker" manufactured/marketed/sold by the petitioner is declared as an item grouped under "entry 116" of the First Schedule to the KGST Act - Decided against assessee.
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