The petitioner in the above writ petition is concerned with the assessment notice issued for the months of April and May 2005. The issue raised is as to the tax applicable to the products sold by the petitioner being “white oats flakes”. In fact, the petitioner had agitated the issue of rate of tax applicable, under the Kerala General Sales Tax Act, 1963 (for short “KGST Act” only), which concluded with a judgment of this Court reported in State o f Kerala v. Girija Kumari (2010(1) KLT SN 68 Case No.81). Considering the relevant Entry 173 in Schedule I of the KGST Act, this Court found the item sold by the respondent, as an item taxable @ 4%. 2. The present issue arises under the Kerala Value Added Tax Act, 2003 (for short the “KVAT Act” only). Similar contentions were urged under the KVAT Act also, but, however, claiming exemption under the I schedule as WPC.29508/2005 : 2 :
covered by Entry 12 which deals with “Coarse Grains”. The issue was whether white oats would be exempted from tax under Item No.12 of the I schedule, or exigible to tax @4% provided under Entry 49 of the III schedule or in the residuary entry of the SRO No.82/06 at 12.5%. A Division Bench of this Court in M/S. Thomson Paper Products v. The Commissioner, Commercial Taxes in OTA 1/2006 by judgment dated 11.06.2008 found that exemption cannot be claimed under Entry 12 of I schedule, since the said entry deals with “Coarse grains” and not a refined product as is indicated in the petitioner's case. However, with respect to tax liability, it was found that the same would be covered under Entry 49(3) being “Corn flakes” which is exigible to tax @ 4% and not at the rate applicable under the residuary entry of SRO 82/06.
3. In such circumstances, it is declared that the petitioner's product would be taxable @ 4% and the extent to which the assessment order levies tax at the higher rate of 12.5%, is declared to be bad. If not already completed, the assessment proposed shall be completed levying tax for the products has been completed @4%, levying tax for the product dealt with by the petitioner; being “white oats” as has been WPC.29508/2005 : 3 :
declared by this Court in the afore cited decision.
Writ petition allowed. Parties are left to suffer their respective costs.
Sd/-
(K. VINOD CHANDRAN, JUDGE) jma //true copy// P.A to Judge