TMI Blog2015 (3) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the respondents as illegal and legally unsustainable - decided in favor of petitioner. - W.P.(C).NOS.2873,4759, 14041, 14053, 14237, 17596, 18085, 19574, 29184 OF 2014 & W.P.(C).NOS.222, 1850 & 3485 OF 2015 - - - Dated:- 6-3-2015 - A.K.Jayasankaran Nambiar, J. JUDGMENT As these writ petitions involve a common issue, they are taken up together for consideration and disposed by this common judgment. 2. The petitioners are dealers in granite metal who have opted to pay tax at the compounded rate in accordance with Section 8(b) of the Kerala Value Added Tax Act (hereinafter referred to as the 'KVAT Act') during various assessment years from 2008-09 to 2013-14. Section 8(b) of the KVAT Act reads as follows: 8. Payment of tax at compounded rates:- Notwithstanding anything contained in Section 6,- (a) ................. (b) Any dealer producing granite metals with the aid of mechanized crushing machine may, at his option, instead of paying tax in accordance with the provisions of the said sections, pay tax at the following rates, namely:- (i) for each crushing machine of size note exceeding 30.48 cm x 22.86 cm = ₹ 40,000 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers. It was found that there was considerable amount of M-sand that was produced through the operation of the said machines. The revenue authorities, therefore, proceeded to demand differential tax from the petitioners, in respect of the M-sand that was generated through the operation of those machines on which tax had not been paid under Section 8(b) of the Act. The notices issued to the petitioners demanding differential tax, and in one case the order passed confirming the demand of differential tax, are impugned in the writ petitions. 5. The contentions of the petitioners, briefly stated, are as follows: As per the scheme of Section 8(b) of the KVAT Act, any dealer producing granite metal with the aid of mechanized crushing machines could opt to pay tax at the compounded rate envisaged under the said provision. Accordingly, so long as the dealers had discharged their tax burden by paying tax in respect of the crushing machines specified in the provision, the M-sand produced during the course of manufacture of the granite metal could not be separately assessed. The mere fact that the petitioners had installed another machine in their unit, the operation of which also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the VSI machine cannot be treated as a biproduct that is obtained during the manufacture of granite metal, but is rather a main product, that is obtained only through the use of the VSI machine, and hence separately taxable under the KVAT Act. It is only the M-sand that is obtained in the process of producing granite metal with the aid of mechanized crushing machines, which qualifies for the exemption. The statutory provisions have since been amended with effect from 01.04.2014 and, as per the amended provisions, M-sand produced using VSI/HSI machines is also separately taxable, with the option of paying tax at compounded rates being made available to the dealer. The amendment indicates that it was never the intention of the legislature to grant an exemption in respect of M-sand that was produced using VSI/HSI machines. 7. I have heard the learned Senior Counsel Sri. Raju Joseph, Sri. N. James Koshy, Sri. Mayankutty Mather, Sri. Abdul Jawad and Smt. R. Leela and Sri. Harishankar Menon on behalf of the petitioners, and the learned Special Government Pleader Sri. George Mecheril on behalf of the respondents, in all these cases. 8. The sole issue that arises for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of different size that could be used for construction. The primary crushing is usually a single jaw crusher. Larger size jaw crushers are used in primary crushing to reduce the secondary blasting in quarry operation to minimize the problems caused due to fly rocks. (b) Secondary Crushing: The primary function of the secondary crushing machine is to produce aggregates of the different size 50 mm, 20 mm, 12 mm, 6 mm, 4.75 mm (crusher sand) that could be used for different construction purpose. The capacity of the crushing plant is primarily depend on c) The type of machines used in the secondary crushing stage: There are usually two types of machines. They are 1) jaw crusher 2) Cone Crusher. The capacity of the Cone crusher is higher than the Jaw crushers. However, the complexity of operation, cost of operation and breakdown factors are less in jaw crushers. d) The number of secondary machines used along with primary machines to process the rubbles. Larger the number of the machines used, larger the output of finished products. Higher number of secondary is required to produce larger quantity of smaller size aggregates like 6mm and minus 4.75 mm. 7. It is further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M.sand particles are again pumped for reuse in granite aggregates wetting and M.sand washing. The settled M.sand particles are collected periodically and sold as second quality M.sand. 11. It is apparent therefore, that the difference of opinion between the petitioners and the respondents is only with regard to what constitutes M-sand or Manufactured sand. It is not in dispute, however, that all the products namely, granite metal, crusher sand and manufactured sand, are obtained during the process of production of granite metal using mechanized crushing machines. If that be so, then, as already noted above, so long a the M-sand or Manufactured sand is a product that is obtained in the process of production of granite metal using mechanized crushing machines, the mere fact that the dealer in question had installed, and used, another machine for the purposes of shaping the granite metal obtained from the secondary crushers, or for obtaining finer sized granite metal or sand, was of no consequence. In my view, the legislative scheme envisaged the payment of compounded tax by reckoning only certain specified machines, from among the various machines that were used in the production ..... X X X X Extracts X X X X X X X X Extracts X X X X
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