State Of Kerala vs M/S.Selvam Broilers(P)Ltd
2021 Latest Caselaw 13996 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                   PRESENT
                 THE HONOURABLE MR.JUSTICE S.V.BHATTI
                                      &
            THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
     WEDNESDAY, THE 7TH DAY OF JULY 2021 / 16TH ASHADHA, 1943
                           ST.REV. NO. 223 OF 2010
       AGAINST THE ORDER DATED 25.02.2010 IN TA 400/2009 OF
                    S.T.A.T.ADDITIONAL BENCH, ERNAKULAM


REVISION PETITIONER/ RESPONDENT/ REVENUE :

            STATE OF KERALA, REP. BY DEPUTY COMMISSIONER (LAW),
            COMMERCIAL TAXES, ERNAKULAM.

            BY SPL. GOVT.PLEADER SRI.C.E.UNNIKRISHNAN



RESPONDENT/ APPELLANT/ ASSESSEE :

            M/S.SELVAM BROILERS(P)LTD.,
            HILL PALACE ROAD, TRIPUNITHURA - 682 301.

            BY SR.ADV.SRI.SHRIKUMAR K.

            BY SRI.K.MANOJ CHANDRAN




     THIS   SALES    TAX   REVISION   HAVING   COME   UP   FOR   ADMISSION   ON
07.07.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 ST.REV. NO. 223 OF 2010
                                        2

                                     ORDER

Dated this the 7th day of July, 2021

Bechu Kurian Thomas, J.

Own a farm on own land and gain exemption - claims the

department. Owning a farm alone gains exemption - cries the assessee.

A poultry farmer's claim for exemption from payment of sales tax is the

subject matter of this revision. The Revenue contended that to claim

exemption on the turnover for the year, a poultry farmer must conduct his

farm on land owned by him and situated within the State. The farmer

claimed that the benefit of exemption was available if the farm was owned

by him, in contradistinction to ownership of the land. Assessee claimed

that ownership was never contemplated under the exemption notification.

The Tribunal granted the exemption against which the State is in revision

under Section 41 of the Kerala General Sales Tax Act, 1963 (for short,

'the Act').

2. The assessment year in issue is 2000-01. The assessing

authority rejected the books of account of the assessee and denied the

claim of exemption on the turnover of poultry reared in the assessee's

farm while issuing the assessment order. The assessee's claim for

exemption was rejected on the ground that the assessee was not the ST.REV. NO. 223 OF 2010

owner of the land where the farm was conducted. The Appellate Authority

also refused to grant the benefit of exemption claimed by the assessee.

However, the Kerala Sales Tax Appellate Tribunal by order dated

25.02.2010 in TA.No.400/2009 found that the assessee is entitled to the

benefit of SRO.No.1090/99 as amended by SRO.No.291/2000 and held

that the assessee was entitled for the benefit of exemption.

3. The facts necessary for disposal of the Appeal are not

required to be narrated in detail. Suffice to state, the assessee was

conducting its own poultry farms within the State of Kerala on leased

lands.

4. To encourage poultry industry in Kerala, exemptions were

granted to poultry farmers in Kerala in exercise of the powers under

Section 10 of the Act. On 31.12.1999, SRO.No.1090/99, was issued

exempting "turnover of chicks and chickens from sales tax. It was

amended by SRO.No.291/2000 confining exemption to turnover of

poultry reared on the farmer's own farm within the State. For the

purpose of easier comprehension, entry 14 of SRO.No.1090/1999 as

amended by SRO.No.291/2000 with effect from 01.04.2000 is extracted

hereunder :-

 ST.REV. NO. 223 OF 2010





     Sl.No      Name of Dealer            Turnover which is       Conditions
                                             exempted                 and
     .                                                            restrictions

14.i. Hatcheries within the Turnover of sale of chicks Nil State hatched by them with the State

ii Poultry farmers within Turnover of sale of poultry Nil the State reared by them in their own farm within the State whether hatched by them or not and the meat obtained therefrom

5. Though there was another amendment as SRO.No.877/2000

w.e.f.23.09.2000, we are not extracting the same as there is no

significant difference.

6. The assessee claimed that it owned a farm within the State

of Kerala though it did not own the land and instead was run and leased

land. He also claimed that owning the land was not a condition as per the

notification relevant for the year 2000-01 for claiming exemption on the

turnover. The only stipulation for claiming exemption was to own a farm

within the State. Owning the farm and owning the land being two

entirely different concepts the assessee claimed the benefit of the ST.REV. NO. 223 OF 2010

exemption on the basis of the above extracted Notification issued in

exercise of the powers under Section 10 of the Act.

7. The assessing officer denied the claim of exemption on the

basis of the amendment to SRO.No.1090/99 brought in by

SRO.No.7/2002 made with effect from 01.04.2000. For the purpose of

easier comprehension, the amendment brought in SRO.No.7/2002 to

SRO.No.1090/99 is extracted as below :

Sl.No. Name of Dealer Turnover which is Conditions and exempted restrictions

14.i. Hatcheries within Turnover of sale of Nil the State chicks hatched by them with the State

ii Poultry farmers Turnover of sale of Own farm does within the State Poultry reared by them not include farm in their own farm within run on land the State, whether taken on lease, hatched by them or mortgage, not, but run on land licence or any owned by them, and other the meat obtained arrangement."

therefrom

8. We have heard the learned Senior Govt.Pleader

Sri.C.E.Unnikrishnan on behalf of the State and the learned Senior

Counsel Sri.K.Sreekumar on behalf of the respondent assessee. ST.REV. NO. 223 OF 2010

9. The sole point that arise for consideration is whether the

assessee is entitled to the benefit of exemption for the year 2000-01 even

though the land on which the farm was conducted was a leased land.

10. In this context, it is apposite to refer to a decision of this

Court in Selvam Broilers (P) Ltd.v. Assistant Commissioner

(Assmt.) and Others [(2003) 129 STC 389 (Ker.)] wherein a learned

Single Judge of this Court had declared that SRO.No.7/2002 does not

have any retrospective operation. In coming to the said conclusion, this

Court had taken note of the decisions in M.M. Nagalingam Nadar Sons

v. State of Kerala [(1993) 91 STC 61 (Ker)] and Deputy

Commissioner (Law) v. M.R.F. Ltd. [(1998) 109 STC 306 (Ker.)]

holding that though Section 10(1) of the Act gives power to the

Government to grant exemption or reduction in rate of tax either

prospectively or retrospectively, Section 10(3) did not expressly confer

the power for retrospectively cancelling or varying a notification already

issued. In the said decision, this Court had categorically held, after

referring to the notifications which have been extracted by us above, that,

owning a land and owning a farm are too entirely different concepts and

that without owning any land, one can own and run a farm. It was fairly

submitted by the learned Senior Govt.Pleader Sri.C.E.Unnikrishnan that

the judgment in Selvam Broilers (P) Ltd.'s case (supra) had become

final as no challenge was made against it.

ST.REV. NO. 223 OF 2010

11. In our considered view, the issue raised in this revision is

squarely covered by the legal principle laid down in Selvam Broilers (P)

Ltd.'s case (supra). If SRO.No.7/2002 cannot have any retrospective

operation as declared by this Court in the afore-cited decision, it is not

open for the State to contend that with effect from 01.04.2000,

exemption for poultry farmers is available only if they own the land on

which they conduct the farm within the State of Kerala. Such a contention

is wholly unacceptable and has no merit at all. The Tribunal as the final

fact finding authority had found that the chicks were reared into broiler

birds under the complete supervision of the assessee on its own farms

within the State of Kerala. The assessee satisfies the conditions for

eligibility for exemption as per the prevailing notification.

In view of the above, we find no perversity in the order of the

Sales Tax Appellate Tribunal in granting exemption to the assessee by

view of SRO.No.1090/99 as amended by SRO.No.291/2000 and

SRO.No.877/2000 for the year 2000-01.

This revision is therefore dismissed.

Sd/-

S.V.BHATTI,JUDGE

Sd/-

BECHU KURIAN THOMAS, JUDGE

RKM

, ST.REV. NO. 223 OF 2010

APPENDIX OF ST.REV. 223/2010

PETITIONER'S ANNEXURES :

ANNEXURE-A TRUE COPY OF THE ASSESSMENT ORDER DATED 30.01.2007.

ANNEXURE-B A TRUE COPY OF THE ORDER OF THE DEPUTY COMMISSIONER (APPEALS) DATED 04.02.2009.

ANNEXURE-C A TRUE COPY OF THE ORDER OF THE STAT DATED 25.02.2010

ANNEXURE-D TRUE COPY OF THE JUDGMENT DATED 13.03.2001 IN O.P. NO.32353/2000