JUDGMENT

KAPADIA, J.

M/s Kurian Abraham Pvt. Ltd.-assessee is engaged in the business of buying rubber, processing the same and selling the processed rubber. Assessee purchases field latex (raw-material) in Kerala, but, since its processing factories are in Tamil Nadu, it transports field latex to Tamil Nadu for processing into centrifuged latex and returns it back into Kerala. Thereafter, the centrifuged rubber is sold by the assessee either locally in Kerala or inter-State.

2. In respect of its sales turnover, respondent is an assessee under Kerala General Sales Tax Act, 1963 ("1963 Act") as well as under the Central Sales Tax Act, 1956 ("1956 Act").

3. For the assessment year 1997-98, with respect to centrifuged latex sold locally, the assessee furnished Form No. 25, declaration from the concerned buyers, and claimed exemption from payment of tax on the purchase Turnover of field latex (raw-rubber). With respect to inter-State sale of centrifuged latex, the assessee paid the tax under the 1963 Act on the purchase of field latex and claimed exemption in respect of Central Sales Tax ("CST") under Notification SRO 1731/93 read with SRO 215/97. The returns filed by the assessee were accepted by the AO vide Order dated 14.5.2001 under the 1963 Act and vide assessment order dated 31.5.2001 under the 1956 Act. Similar returns were filed by the assessee for 1998-99 onwards.

4. At this stage, it may be stated that returns filed by the assessee were accepted by the Department on the basis of Circular No. 16/98 dated 28.5.1998 (for short "the said circular") issued by the Board of Revenue under Section 3(1A)(c). Under the said Circular, field and centrifuged latex were treated as one and the same commodity in view of Entry 110 of the First Schedule to the 1963 Act.

5. At this stage, it may be noted that, during the interregnum, in the case of Padinjarekara Agencies Ltd. v. Assistant Commissioner reported in 1996 (2) KLT 641, a learned Single Judge of the Kerala High Court took the view that centrifuged latex is a commercially different product from field latex.

6. It needs to be clarified that the judgment of the Kerala High Court in Padinjarekara case (supra) related to assessment years 1983-84 to 1986-87 during which time Entries 38 and 39 were in force whereas in the present case, we are concerned with the assessment years 1997-98 and 1998-99 when Entry 110 was in force. That, the structure of Entries 38 and 39 which existed in the past was materially different from the structure of Entry 110.

7. Be that as it may, in view of the judgment of the High Court in Padinjarekara case (supra) notices were issued by the Department under Section 19 of the 1963 Act proposing to reopen KGST and CST completed assessments for 1997-98 on the ground that purchase turnover of field latex and sales turnover of centrifuged latex had escaped assessments. Accordingly, the Department proposed to assess the entire purchase turnover of field latex in the hands of the assessee under Entry 110(a)(i) on the ground that the centrifuged latex obtained by processing field latex is a different commodity and, accordingly, the assessee was the last purchaser of field latex within Kerala. Similarly, with regard to inter-State sales of centrifuged latex, the Department alleged that the benefit of exemption taken by the assessee under the above two exemption Notifications was not admissible on the ground that the field latex purchased in Kerala and the centrifuged latex sold inter-State were two different commodities and, accordingly, the KGST paid by the assessee on the field latex was not sufficient to claim exemption for CST on the sale of centrifuged latex.

8. The Department also reopened the assessments on the ground that the assessee had taken the field latex out of Kerala to its factory in Tamil Nadu and had brought it bac