- (1.) This is an appeal by the Revenue against the decision of a Division Bench of the Kerala High Court in tax revision cases filed at the instance of the Revenue. We are here concerned only with compounded rubber and with scrap. The assessment year concerned is Assessment Year 1986-87 and there is a provisional assessment for the period April to December, 1990. The respondent manufactures compounded rubber in Kerala from rubber that is bought in Kerala. It claimed for the rubber that it bought the benefit of a notification (SRO No. 641/81) issued by the State in exercise of power conferred by Section 10 of the Kerala General Sales Tax Act, 1963. Thereby the rate of tax was reduced from five per cent to three per cent "on the purchase of rubber by manufacturers of finished rubber products within the State for use of such rubber by such manufacturers in the manufacture of finished rubber products". It was the case of the respondent that the compounded rubber that it manufactured was a finished rubber product and it produced before the assessing authority the affidavits of several individuals in the trade who affirmed that the compounded rubber was a finished rubber product as understood in the trade.
(2.) It is the contention of the Revenue that compounded rubber is not a finished rubber product and that the word "finished" must be understood as the last or concluding product in a chain. We are of the view that due weight must be given to the uncontested evidence of those in the trade who have stated that compounded rubber is understood in that trade as a finished rubber product and that, accordingly, the Tribunal and the High Court cannot be faulted for the view that they took in this behalf.
(3.) There is no dispute in regard to any future years and Mr. Salve, learned Solicitor General, appearing for the State has, fairly, not contended that the notification dated 2nd November, 1990 (SRO No. 1516/90) is either clarificatory or has retrospective effect.;