LexSTATE OF KERALA & ORS. versus M/S KURIAN ABRAHAM PVT. LTD. & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2008) 2 S.C.R. 620
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A
STATE OF KERALA & ORS.
Jr
v.
M/S KURIAN ABRAHAM PVT. LTD. & ANR.
(Civil Appeal Nos. 7965-7966 of 2004)
)
B
FEBRUARY 8, 2008
{S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.)
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Kera/a General Sales Tax Act, 1963:
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c
s. ·3(1A)(c) and First Schedule, Entry 110 - Rubber -
Power of Board of Revenue to grant administrative relief -
Assessee purchasing field latex in Kera/a, processing it into
centrifuged latex in its factories in Tamil Nadu and selling the
same - Circular No. 16198 issued by Board of Revenue
allowing exemption under 1963 Act and Central Sales Tax
D Act, 1956, treating field latex and centrifuged latex as one and
the same commodity under Entry 110-A.O. on the basis of a
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judgment of High Court reopening assessments on the ground
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that purchase turnover of field latex and sales turnover of
centrifuged latex had escaped assessment-' Writ petition by
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assess~e challenging assessment orders as contrary to
Circular No. 16198 - Plea of Department that circular was
violative of Entry 110 of First Schedule to 1963 Act and power
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to grant exemption was conferred on Government and not on
the Board - HELD: Circulars issued by the Board by
F exercising statutory powers u/s 3(1A){c), being statutory in
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nature, are binding on all authorities administering tax
department and are to be respected by the officers working
under the supervision of the Board as long as the said circulars
remain in force - Approach of A. 0. in re-opening completed
G assessment opining that circulars No. 16198 was not binding
is uosustainable in Jaw- Field latex and centrifuged latex, even
if assumed to be two different items of taxation under 1963
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Act, double taxation avoidance comes within domain of Board
of Revenue - It was open to Board u/s 3(1A) to grant
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620
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STATE OF KERALA & ORS. v. M/S KURIAN ABRAHAM
621
PVT. LTD. & ANR.
administrative relief by CircularNo. 16198 if it was of opinion A
that treating field latex and centrifuged latex as two distinct
items could result in double taxation - Tax Administration -
Circulars issued by Board of Revenue - Binding nature of -
Double taxation avoidance. ·
The respondent-assessee was engaged in the B
business of rubber. It purchased field latex (raw material)
in Kerala, got it processed int~ centrifuged latex in its
factories in Tamil Nadu and sold the same either locally in
Kerala or inter-State. For the assessment year 1997-98-
initially the assessee, on the basis of Circular No. 16198 C ,
issued by the Board of Revenue uls 3(1A) (c) of the Kerala
General Sales Tax Act, 1963, was allowed exemption in
respect of the 1963 Act as also the Central Sales Tax Act,
1956, treating the field latex and the centrifuged latex as
one and the same commodity under Entry 11 O of the First D
Schedule to the 1963 Act. However, pursuant to the
judgment of the Kerala High Court in Pandinjarekara's
case* holding centrifuged latex as a commercially different
product. from field_ latex, notices were issued to the
assessee proposing to reopen KGST and CST completed E
assessments for 1997-98 on the ground that purchase
turnover of field latex and sales turnover of centrifuged
latex had escaped assessments both _under the 1963 Act
and the 1956 Act. The assessee's writ petition seeking to_
quash the orders of reassessments inter a/ia on the ground . F
that they were contrary to the Circular No. 16/98 was
allowed by the High Court.
In the instant appeals filed by the Department it was
contended for the appellants that Circular No. 16/98 issued ·
by the Board of Revenue was violative of the legislative G
intent of introducing Entry 110 in the First Schedule to
the 1963 Act. It was submitted that when the Legislature
had earmarked each item in Entry 110 as distinct
commodity, it was not open to the Board of Revenue to
treat field latex and centrifuged latex as the same H
622
SUPREME COURT REPORTS
[2008] 2 S.C.R.
I
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A commodity and this amounted to legislation by the Board.
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It was also contended that the power was conferred on
the Government to grant or not to grant exemption u/s 1 O
of the 1963 Act, and such power was not conferred on
the Board of Revenue.
B
Dismissing the appeals, the Court
HELD: 1. The judgment of the Kerala High Court in
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,I.
Padinjarekara* case related to assessment years 1983-
84 to 1986-87 during which time Entries 38 and 39 were in
c force whereaExcerpt shown. Read the full judgment & AI analysis in Lexace.