Concessional tax rates for sales to military unit-run canteens are applicable up to the assessment year 2013-14, according to pre-amendment law.

J U D G M E N T

[WA Nos.1502/2018, 892/2018, 1402/2018, 1451/2018, 1498/2018]

S.V.Bhatti, J.

State of Kerala represented by the Chief Secretary and 3 others/respondents in W.P.(C) are the appellants. M/s. Whirlpool India Pvt. Ltd and M/s. LG Electronics India Pvt.

Ltd/petitioners in the writ petitions are the respondents.

2. The appeals arise from the common judgment dated

03.07.2017 in W.P.(C) No.7727 of 2017 and batch. The challenge made by the writ petitioners to the respective assessment orders is stated in each one of the writ petitions in detail. The parties are referred to as arrayed in the writ petitions.

3. The petitioners challenged the assessment orders made under the Kerala Value Added Tax Act (for short ‘the Act’) for the assessment years 2011-12 to 2014-15 denying concessional rate of tax claimed by the petitioners on the sales made by the petitioners, of their products, to canteens run by units of the Military, Navy and Air Force. The case of the writ petitioners is that the concessional rate claimed by the petitioners is available to the supplies made to the Canteens Stores Department and supplies made to the Unit-Run Canteens of the Military, Navy and Air Force. The amendment which has come into force with effect from 01.04.2014 is not applicable to the respective assessment years. The distinction drawn by the respective Assessing Officers to deny the concessional rate of the tax through the supplies made by the petitioners to Unit- Run Canteens is illegal. The above controversy has been examined in the light of the applicable provision of law. The learned judge recorded the following findings:

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6. It is apparent therefore that, taking note of the distinction between a sale effected directly to the Canteen Stores Department and sales effected directly to Unit-run canteens of the Military, Navy, Air force, etc., the State Government decided to depart from the earlier practice of granting concessional rate of tax even in respect of supplies effected to Unit-run canteens and confined the benefit of concessional rate of tax only to supplies effected to the Canteen Stores Department. The amendment, however, was to take effect only from the assessment year 2014-15, and for the prior period, it was felt not necessary to interfere with the benefit of concessional rate of tax, that was already extended to unit run canteens.

7. In the impugned assessment orders, I find that, the assessing Authority has not taken note of this amendment, which came into effect only from the assessment year 2014-15, and appears to have applied the rationale of the amended provision to even the earlier assessment years up to, but not inclusive of the assessment year 2014-15. I am, therefore of the view that, the assessment orders impugned in all these writ petitions, except W.P.(C).No.17209/2017, inasmuch as they pertain to assessment years 2011-12, 2012-13 and 2013-14, must necessarily be quashed, and I do so. The respective assessing authorities are directed to pass fresh orders of assessment in relation to the assessees for the respective assessment years, after taking note of the observations in this judgment and after affording the petitioners/assessees, a fresh opportunity of being heard in the matter. The respective assessing authorities shall pass fresh orders as directed, within a period of six weeks from the date of receipt of a copy of this judgment.

8. As regards 17209/2017, I find that, Ext.P3 assessment order, that is impugned in the said writ petition, pertains to the assessment year 2014-15, and the interpretation to be placed on the provisions of the 5th proviso to Section 6 (1), is as indicated in this judgment. It is made clear that, in the said case, the petitioner will not be entitled to the benefit of the concessional rate of tax in respect of supplies effected to Unit-run canteens. Since the petitioner also impugns Ext.P3 assessment order on other grounds, I quash Ext.P3 assessment order and direct the assessing officer in