- (1.) These appeals arise from a common judgment of the Kerala High court in a batch of three tax revision cases. The question relates to the interpretation of Section 8 (2-A) of the central Sales Tax Act, 1956.
(2.) In exercise of the power conferred upon it by Section 10 of the Kerala Sales Tax Act, the State of Kerala issued a notification RSO-415 of 1971 providing for "an exemption in respect of the tax payable under the said Act in regard to the turnover of the sales of newsprint by the newsprint plant in the State for the period of two years from the date of starting production of the newsprint by the said plant".
(3.) The appellant Hindustan Paper Corporation Limited entered into an agreement with the government of Kerala in the year, 1974 reiterating the said exemption. The relevant portion of the agreement reads thus: "The government of Kerala, with a view to help the project to tide over the difficulties in the initial stages and to establish itself, agree to exempt the turnover relating to the sale, of the products by the corporation from the payment of sales tax for a period of two years from the date of starting of production of the newsprint. ";