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TMI Blog2007 (8) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... on petitions we are concerned with the assessment years 1988-89, 1989-90 and 1990-91. The assessing authority by the aforesaid orders has completed the assessment both under the KGST Act and CST Act. In these revision petitions, we are only concerned with the assessment orders passed by the assessing authority under the provisions of the CST Act. The claim of the petitioner before us is to apply the reduced rate of tax while computing the tax liability under the CST Act by applying the order passed by the State Government in G.O. (Ms) No. 124/88/ID dated August 31, 1988. The assessing authority has rejected the claim of the petitioner on the ground that the exemption that is granted under the Government order is not in the nature of a general exemption, but under specific circumstances. The assessee being aggrieved by the order so passed by the assessing authority has carried the matter by way of first appeal before the first appellate authority. The appellate authority after referring to the Government order/notification has partly allowed the claim of the assessee. For doing so, the appellate authority has assigned the following reasons. The same are as under: "I have co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o mention about their products in the Explanatory Note of the Notification No. 431/91 dated March 30, 1991 is highly irregular, unsustainable and will not come within the purview of the judgment as the point in question in the present case is whether the Explanatory Note of a statutory notification has overriding effect on the notification. The subject-matter of the decision mentioned by the Board of Revenue and in the present case is entirely different and as such there is no reason to deviate from the earlier opinion of the State Government. It is seen that the assessing authority levied 12.5 per cent tax on the inter-State sales of tread rubber without considering the above clarification of the Government of Kerala. Considering the above facts and circumstances of the case, I am of the opinion that the above issue requires re-examination at the hands of the assessing authority in view of the clarification of Government. So the assessing authority is directed to examine the rate of tax on inter-State sale of tread rubber without C form in the light of the clarification by Government as per letter No. 27193/B1/96/TD dated February 14, 1997 and in ccordance with law and adopt the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41 of the KGST Act. In the memorandum of revision petitions, the assessee has framed the following questions of law for our consideration and decision. They are as under: "A. Whether, on the facts and in the circumstances of the case, has not the Appellate Tribunal gone wrong in holding that the reduction in rate of tax on the sales turnover of the rubber goods by G.O. (Ms) No. 124/88/ID dated August 31, 1988 is not a general reduction within the meaning of section 8(2A) of the CST Act? B. Is not the reduction in the rate of tax on the sales turnover of rubber goods provided by annexure A order unconditional, not in specified circumstances, not at specified stages and not with reference to turnover of goods and therefore a general reduction in the rate of tax as provided under section 8(2A) of the CST Act? Advocate Smt. Meera V. Menon, the learned counsel appearing for the assessee vehemently contended before this court that the order passed by the State Government granting exemption/reduced rate of tax is in the nature of general exemption and therefore, the assessing authority ought to have granted the relief from tax liability by applying the provisions of section 8(2A) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etime past and as rubber is an important raw material for industries, the State Government had been thinking to give further encouragement for setting up more rubber industries in the State. With this end in view, a meeting was held inviting all those concerned to discuss the ways and means of inducing more industries to use rubber as raw material inside the State. The consensus arrived at the meeting was that there was need for giving some concessions and relief to the new entrepreneurs for starting rubber industries. Government considered the various suggestions made by the rubber manufacturers and technical experts and have decided to extend the following concessions to promote rubber industries. (1) Rubber to be used for new industries in Kerala will be exempted from levy of purchase tax. (2) An additional capital subsidy of five per cent will be given to new rubber industries to be set up in Kerala and this subsidy will be in addition to the Central/State subsidy now available to the industries. (3) Sales tax on finished rubber goods produced from factories in Kerala will be reduced to three per cent." The preamble clearly indicates that it was to encourage the setting up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re goods in the State for a period of three years from the date of publication of the notification. The assessee therein had claimed exemption from payment of tax under the CST Act on the ground that the State has exempted sales of a specified goods for a particular period. The assessing authority had rejected the claim. However, the High Court had accepted the stand of the assessee. The apex court afte referring to the earlier decision including the decision in Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd. [1995] 96 STC 355, was pleased to state as under (at page 532 of 101 STC): "In the instant case, the exemption has not been granted to the goods generally. Specified goods (mirrors and toughened glass) produced by a specified company have been exempted from payment of sales tax for a specified period of time. It is not the case of the assessee that mirrors and toughened glass have been generally exempted from payment of tax. Therefore, in view of the ratio laid down in the aforesaid case of Commissioner of Sales Tax v. Pine Chemicals Ltd. [1995] 96 STC 355 (SC); [1995] 1 SCC 58, it must be held that the assessee will not be entitled to get benefit of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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