The petitioner is a registered dealer engaged in compounding, blending and bottling of Indian Made Foreign Liquor (IMFL). The issue arising in the instant case pertains to the liability of the petitioner to pay turnover tax on that portion of its turnover which comprises of excise duty/privilege price in respect of the sale of IMFL. The petitioner essentially has two contentions namely, that they are not a distillery for the purposes of Section 5 (2C) of the Kerala General Sales Tax Act and, hence, they will not be liable to pay turnover tax as contemplated under that provision which is applicable only to distilleries. The other contention is with regard to the payments already made by the petitioner towards turnover tax. It is the case of the petitioner that while it had effected payments towards turnover tax liability, during the pendency of litigation on the issue of whether the amounts collected by way of privilege price by the Kerala State Beverages Corporation would form part of the turnover on which turnover tax had to be paid, pursuant to a resolution of the said dispute through the decision of the Supreme Court in State of Kerala and Others
v. Maharashtra Distilleries Ltd. And Others [2005 Vol.141
STC 358] and a clarification by the Supreme Court that no turnover tax would be payable on amounts paid by the Kerala State Beverages Corporation to the Treasury by way of privilege fee up to 05.01.1999, the respondents had appropriated the payments made by it in the interregnum, towards interest under Section 23
(3)/23(3A) of the Kerala General Sales Tax Act in terms of Section 55 C thereof. This resulted in the amounts paid by the petitioner, towards tax that was not due from it, being adjusted towards interest accrued on the said tax liability and not being available for set off against the tax liability that was attracted to the petitioner for the period after 05.01.1999. The petitioner also has a case that the compounding and blending operations carried on by it do not amount to a process of manufacture for the purposes of attracting the liability to turnover tax. In the writ petition, the assessment proceedings for the assessment years 2000-2001, 2001-2002 and 2002-2003 are stated to have culminated in Exts.P11, P17 and P20 orders of the 3rd respondent Appellate Authority. These orders are impugned in the writ petition that was filed in 2008 challenging, inter alia, the amendments to the Kerala General Sales Tax Act and Abkari Act that are brought in 2003/2004.
2. It is seen that by a judgment dated 22.01.2010 in W.A.No.1225 of 2007 and connected cases a Division Bench of this Court has rejected the challenge to the amendments in the Kerala General Sales Tax Act and the Abkari Act except to the extent of holding the retrospectivity given to those provisions for the period prior to 05.01.1999 as illegal. It is also brought to my notice, by counsel for the petitioner, that against Exts.P11, P17 and P20 orders, he has already pursued his statutory remedy under the Kerala General Sales Tax Act and the said proceedings have culminated in the judgment of this Court in revisions filed against the orders of the Tribunal. Under the said circumstances, and in view of the fact that the petitioner has already exhausted his statutory remedies under the Act against Exts. P11, P17 and P20 orders during the pendency of this writ petition, the writ petition, in its challenge to the amendments to the Kerala General Sales Tax Act and Abkari Act, is disposed following the judgment dated 22.01.2010 of the Division Bench in W.A.No.1225 of 2007 and connected cases.
A.K.JAYASANKARAN NAMBIAR JUDGE mns