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TMI Blog2009 (7) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Notification S.R.O. No. 958 of 2002, dated November 21, 2002 and exhibit P7 revised assessment of CST for the year 2002-03. The petitioner's unit was exempted from payment of tax on inter-State sale as per S.R.O. No. 1731 of 1993. As per serial No. 3 in Schedule IV of the abovesaid notification khadi and village industrial units recognized by the Kerala Khadi and Village Industries Board were given tax exemption for the period during which they remain as village industry from payment of tax on the products manufactured by such units within the State. Accordingly the petitioner claimed exemption on turnover of inter-State sale to the tune of Rs. 13,98,197 for the year 2002-03 and the assessing authority completed the assessment granti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed assessment under exhibit P7, treating the entire inter-State sale turnover as taxable at 10 per cent along with fixing liability to pay interest with effect from May 1, 2003 onwards. S.R.O. No. 1731 of 1993 was issued by the State Government exercising powers vested under section 8(5) of the Central Sales Tax Act, 1956. Through Finance Bill, 2002 amendment was brought in to section 8(5) of the Act. Exhibit P6 is the notification (S.R.O. No. 958 of 2002) issued consequent to the amendment, by which S.R.O. No. 1731 of 1993 is superseded. As per serial No. 3 in Schedule III of exhibit P6, the concessional rate of tax for products of the units recognised by the Khadi and Village Industries Board was re-fixed at two per cent and production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use there was no such conditions insisted in S.R.O. No. 1731 of 1993. Therefore it is clear that the petitioner was disabled from collecting tax or from securing form C declarations during that period. Therefore the question that arises for consideration is whether the retrospectivity of exhibit P6 can be sustained, and whether the petitioner is eligible for total exemption during the period between June 1, 2002 and November 21, 2002. Production of declarations in the prescribed form, for the purpose of claiming concessional rate of tax, as provided under section 8(1) of the CST Act, is insisted by virtue of provisions in section 8(4) of the Act. By virtue of section 8(5) the State Government is given power, notwithstanding anything contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case while considering a notification issued by the State of Rajasthan under section 8(5) of the CST Act, the honourable Supreme Court observed: (at page 554 of STC) ". . . The conditions prescribed by the notifications are the conditions prescribed for availing the further reduction of rate provided by the notification. The notifications merely reduce the rate of tax; they do not do away with the levy altogether. All that the notifications have done is to reduce the rate of tax from 4 per cent to 1½ per cent (2½ per cent, as the case may be). Separate conditions are prescribed for availing the rate (which itself is a concessional rate) prescribed in section 8(1) and for availing the further reduction provided by the notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1731 of 1993 from a previous date than the date of actual promulgation of exhibit P6, can be sustained or not. In this regard the petitioner had pointed out a further notification issued by the Government, S.R.O. No. 328 of 2004, by which retrospectivity of exhibit P6 notification has already been taken away, with respect to certain items mentioned in column (1) of exhibit P6. The said notification along with its Explanatory note is extracted below: "S.R.O. No. 328 of 2004.-In exercise of the powers conferred by sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Central Act, 74 of 1956), the Government of Kerala, having considered it necessary in the public interest so to do, hereby make the following amendment to the Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 in K.G. Ex. No. 824 dated April 3, 2004)." From the Explanatory note extracted above it is clear that the Government have realised the difficulty caused to dealers because of the retrospectivity given to exhibit P6, but they have restricted the amendment only with respect to certain products. Why similar benefit was denied to dealers like that of the petitioner, when amendment was brought in order to rectify the anomalous position, is not discernible. There is no convincing explanation forthcoming in this regard. The petitioner contends that the attitude of the Government in this regard is clearly discriminatory. The petitioner had produced a copy of a judgment of this court in W.P. (C). No. 29012 of 2005 (Aboobacker K.I. v. S) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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