Prima Industries Limited vs Commissioner of Commercial Taxes

C.N. Ramachandran Nair, J.—This is an appeal filed u/s 40 of the Kerala General Sales Tax Act, 1963 challenging exhibit P-8 order of the Commissioner of Commercial Taxes declining to entertain an application for clarification filed by the appellant u/s 59A of the KGST Act. The appellant, a medium-scale industrial unit, applied for sales tax exemption on the products manufactured by it. Based on the recommendation issued by the Kerala State Industrial Development Corporation Ltd., the financing agency, the Deputy Commissioner of Commercial Taxes, issued exemption certificate granting exemption on "deoiled cake and solvent extracted and refined oil". This order is issued on August 2, 1999. According to the appellant, oil extracted by the appellant in the solvent-extraction process retains it''s identity with the raw material and therefore appellant sought a clarification of the exemption certificate by the Commissioner of Commercial Taxes to the effect that solvent-extracted and refined oil will retain identity as rice bran, coconut oil, groundnut oil, etc., depending on raw material from which such oil is extracted. Application filed by the appellant u/s 59A was rejected by the Commissioner on the ground that he has no authority to clarify on the exemption certificate issued under notification S. R. O. No. 1729 of 1993.

We are of the view that the Commissioner is right in declining to clarify the exemption certificate as he has no powers u/s 59A of the Act to clarify the exemption certificate issued by concerned authority under S.R.O. No. 1729 of 1993. Section 59A authorises the Commissioner to clarify only the issues referred to therein, which do not include sales tax exemption certificate issued under any notification issued u/s 10 of the Act. The items on which the Commissioner can clarify u/s 59A are as to whether (a) any person is a dealer ; or (b) any transaction is a sale ; or (c) any particular dealer is required to be registered ; or (d) any tax is payable in respect of any sale or purchase, or if tax is payable, the point and the rate thereof ; or (e) any activity carried out in any case amounts to or results in the manufacture of goods. It is clear from the above that the clarification sought for by the appellant on the exemption certificate issued does not fall under any of these items. Further it is to be noted that alternate remedy by way of appeal is provided against exemption certificate before the appellate committee under the manual of sales tax exemption issued by the Government. The opening words of Section 59A themselves make it clear that wherever appellate or revisional remedy is there before any court or Tribunal or before any authority, the Commissioner is not entitled to interfere with such matters in proceedings u/s 59A of the Act.

We therefore uphold exhibit P-8 order of the Commissioner and dismiss the appeal filed by the appellant. However, it is open to the appellant to file appeal against impugned sales tax exemption certificate obtained before the concerned authority and if there is delay in filing the appeal on account of pendency of this appeal from October 2002 onwards, then such authority will condone the delay and decide the matter on merits.

Appeal is dismissed with the above observations.