K. K. USHA, J. –

These tax revision cases at the instance of the Revenue, arise out of a common order passed by the Kerala Sales Tax Appellate Tribunal, Additional Bench, Kottayam, in Tribunal Appeal Nos. 218 of 1992, 257 to 265 of 1992. T.A. No. 218 of 1992 was in respect of final assessment under the provisions of the Kerala General Sales Tax Act, 1963 (hereinafter referred to as "the Act") for the assessment year 1986-87. The other appeals related to provisional assessment for the months April, 1990 to December, 1990.

2. Two common questions arise in the above cases : (1) Whether the compounded rubber manufactured by the assessee-company is a finished rubber product so as to avail concessional rate of tax on rubber purchased for its production as per notification S.R.O. No. 641 of 1981 ?

(2) Whether S.R.O. No. 1516 of 1990 is clarificatory in nature having retrospective application ? Additional issue raised in T.R.C. No. 41 of 1995 is, whether the sale of the items empty drums, old newspaper, gunny bags, etc., are to be taxed at the general rate or at the rates given against each item in the Schedule to the Kerala Sales Tax Act, 1963 ?

3. Assessments for the years 1981-82 to 1985-86 under the Act were completed treating compounded rubber manufactured by the assessee in its factory at Kottayam as finished rubber product entitled to avail of the concession rate under Notification S.R.O. No. 641 of 1981. For the assessment year 1986-87, return was filed by the assessee claiming concessional rate of 3 per cent tax on the purchase turnover of rubber which was used for the manufacture of tread rubber and compounded rubber. Assessing authority rejected the claim holding that compounded rubber is not a finished rubber product, that tread rubber being mixture of synthetic rubber and natural rubber, it is not a rubber product and therefore purchase of rubber for manufacture of compounded rubber and tread rubber will not be entitled to the concessional rate of 3 per cent tax under S.R.O. No. 641 of 1981. Assessing authority further found that the turnover of cloth bags was liable to tax under section 5A of the Act. Further, the assessing authority rejected the claim of the assessee that used drums, brass valves, empty gunnies, etc., were sold by the assessee as scrap items and therefore the turnover in respect of the above was liable to be taxed at the general rate of 5 per cent. According to the assessing authority, the turnover in respect of the above items are to be taxed at the rates given against each item in the Schedule to the Act. The assessment order for the year 1986-87 was issued on March 12, 1991 and the provisional assessment orders for the months of April, 1990 to November, 1990 were dated March 6, 1991.

4. Appeals filed by the assessee were dismissed by the Deputy Commissioner (Appeals), Agricultural Income-tax and Sales Tax, affirming the view taken by the assessing authority under order dated March 3, 1992 for the assessment year 1986-87 and by order dated March 9, 1993 in the case of provisional assessments. Aggrieved by the orders passed by the first appellate authority, the assessee filed second appeals before the Kerala Sales Tax Appellate Tribunal. The Tribunal took the view that compounded rubber manufactured by the assessee is, by itself, a finished rubber product and a marketable commodity, even though, a raw material for the manufacture of tyres, etc. It also took the view that S.R.O. No. 1516 of 1990 dated November 2, 1990 by which compounded rubber was taken out of the purview of S.R.O. No. 641 of 1981 dated April 1, 1981 was not declaratory in nature and has no retrospective effect, which would justify denial of the benefit of concessional rate of tax granted under S.R.O. No. 641 of 1981 to the assessee for the assessment period covered by the appeals except as regards the provisional assessment for the period after November 2, 1990. Tribunal also took the view that even though the tread rubber is