V. Gopala Gowda, J. - (1.) THE petitioner -assessee questioned the correctness of the judgment dated March 7, 2002 passed in S.T.A. 572 of 2000 and the order passed by the first appellate authority in KST. AP. No. 260 of 1999 -2000 urging various legal grounds and prayed to set aside the impugned judgment and also the orders of first appellate authority and the assessing authority by the following substantial questions of law, which read thus : A. Whether, in the facts and circumstances of the case, the Appellate Tribunal was right in upholding the orders of the lower authorities denying to the petitioner the benefit of sales tax exemption in terms of G. O. No. CI 140 SPC 93 dated July 12, 1993 read with the certificate of sales tax exemption dated October 10, 1995 granted by the District Industries Centre, Mysore, certifying sales tax exemption on the finished goods ? B. Whether the Tribunal is justified in upholding the orders of the assessing and appellate authorities who unilaterally denied to the petitioner the benefit of KST exemption on the value of finished goods, though authorized by the Commerce and Industries Department in its Government Order dated July 12, 1993 and certificate dated October 10, 1995, without getting the same modified or cancelled by the concerned authorities in the Commerce and Industries Department or without obtaining the approval/concurrence of the Stale Level Committee ? C. Whether the Tribunal is legally justified in considering that 'manufacturing activity' is a pre -condition for grant of exemption from sales tax even though the parent Government order dated July 12, 1993 of the Commerce and Industries Department did not stipulate so ? D. Whether the petitioner is eligible for sales lax exemption on the value of finished goods, viz., turmeric powder in terms of Government order dated July 12, 1993 of the Commerce and Industries Department read with the certificate dated October 10, 1995 of the District Industries Centre ? E. Whether the activity of the petitioner, namely, conversion of turmeric roots into turmeric powder is a manufacturing activity so as to be eligible for the benefit of sales tax exemption even in terms of Government Notification No. FD 171 CSL 93 (I and II) dated August 28, 1993?
(2.) SRI T. N. Keshava Murthy, the learned Counsel appearing on behalf of the assessee, seriously questioned the concurrent finding of fact recorded by the appellate authority, namely, Karnataka Appellate Tribunal (hereinafter called as "the Karnataka Appellate Tribunal") contending that the same is not only erroneous finding but also contrary to law. He has placed strong reliance upon the Government Order dated July 12, 1993 followed by another Government Order dated August 28, 1993 as a measure of follow up to implement the policy of the State Government as contained in Government Order dated July 12, 1993 and further as per the guidelines enumerated in the supplementary Government Order dated August 28, 1993, in the place output manufacture of goods is inconsistent with the earlier Government Order which is the industrial policy of the State Government in extending tax exemptions to the newly established factories including the petitioner -industry. Pursuant to the supplementary notification wherein certain conditions were laid down by the State Government, the certificate was issued by the Department of Industries and Commerce (hereinafter referred to as "the DIC") in favour of the petitioner is not accepted by the assessing authority and the appellate authority which is contrary to the decisions rendered by two Division Bench judgments of this Court reported in the case of Brooke Bond Lipton India Limited v. State of Karnataka, [1998] 109 STC 265 and Wipro Infotech Limited v. Additional Deputy Commissioner of Commercial Taxes (Assessment -II), [2000] 117 STC 244. The said certificate is in favour of the assessee. The assessing authority has not referred the same to the DIC or the State Level Committee seeking clarification for not accepting the certificate issued in favour of the assessee. The State Government has framed the industrial policy. To carry out the same subsequent notification was issued. The same cannot be repugnant to the policy, which is approved by the Cabinet of the State Government. The reliance is placed upon the said decisions by the learned Counsel to show that the assessing authority's and the appellate authority's orders are contrary to the Government notification dated July 12, 1993. The learned Counsel for the petitioner placed strong reliance upon the decision of the Supreme Court in the case of State of Bihar v. Suprabhat Steel Ltd. reported in, [1999] 112 STC 258 in support of the contention that the State Government has framed the industrial policy : to carry out the same subsequent to notification issued : the same cannot be repugnant to the policy which is approved by the Cabinet of the State Government. Reliance is placed on the said decision to show the finding recorded by the assessing authority, the appellate authority and Karnataka Appellate Tribunal is contrary to the Government notification dated July 12, 1993.
(3.) THE concurrent finding of fact recorded by the appellate authority that the turmeric powder is not different from turmeric roots is once again contrary to the material evidence on record and law laid down by the apex court in the case Rajasthan Roller Flour Mills Association v. State of Rajasthan reported in, [1993] 91 STC 408 and other two Division Bench judgments of this Court, namely, Brooke Bond [1998] 109 STC 265 and Wipro Infotech, [2000] 117 STC 244. In the decision of Brooke Bond, [1998] 109 STC 265 two Constitutional Bench decisions of the apex court are referred to at paragraphs 47 and 48, namely, Empire Industries Limited v. Union of India case reported in : [1987] 64 STC 42 (SC) and Ujagar Print's case, [1989] 74 STC 401. The apex court referring to the facts of the case in Brooke Bond Upton India, [1998] 109 STC 265 (Karn) wherein it is held that there is a manufacturing process involved in preparing blended tea. Therefore, it is contended by the learned Counsel that the judgment of the Supreme Court referred to in the Brooke Bond Upton India Ltd.'s case, [1998] 109 STC 265 (Karn) with all force is applicable to the fact -situation of the present case to justify the claim of the assessee that the turmeric powder is a distinct and separate commodity in the commercial parlance. Therefore, the finding recorded by the assessing authority and the appellate authority is not only erroneous but suffers from error in law for the reasons that the turmeric powder is no doubt a spice but they have wrongly held that no manufacturing process is involved in the finding recorded by them. Therefore, it is contended that the said finding is erroneous in law and further in support of the same proposition of law, reliance is placed on another Division Bench judgment of this Court, namely, Assistant Commissioner of Commercial Taxes, V Circle, Bangalore v. J.P. Kumar & Co., [1998] 109 STC 645 wherein the Division Bench of this Court after referring to the case of Rajasthan Roller Flour Mills, [1993] 91 STC 408 held that ragi and ragi powder is different and distinct. Further he has placed reliance upon another decision of this Court reported in the case of Associated Cement Companies Limited, Bangalore v. Government of Karnataka, [1998] 45 Kar LJ 472 (HC)(DB) in support of the same proposition of law and also unreported decision rendered by this Court in W. P. 11851 -11859/2001 (T -Ey.T) decided on July 24, 2003 (Unique Creations (Bangalore) Ltd. v. State of Karnataka, [2004] 135 STC 213) and another unreported Division Bench decision in (Belgaum Tyres & Treads Pvt. Ltd. v. State of Karnataka S.T.R.P. 14/1999 -Decided on May 25, 2004) wherein this Court has referred to Wipro Infotech Ltd., [2000] 117 STC 244. To substantiate the contention the learned Counsel has placed reliance upon the certificate issued by the General Manager, D. I. C, Mysore, at annexure E to show that the claim of exemption from payment of tax in respect of turmeric powder according to him which is manufactured in the petitioner's factory is exempted from payment of tax under the Government policy and Government order referred to supra, to that effect the certificate was issued in favour of the assessee by the competent officer, which is erroneously not accepted by the assessing authority and the appellate authority, which is contrary to the decisions of this Court referred to supra. Therefore, Sri. T. N. Keshavamurthy, learned Counsel for the petitioner, submits that the questions of law in this case which are extracted in this order would arise for answering the same in favour of the assessee.;