Commercial Tax Officer, II Circle, Udupi, Dakshina Kannada District vs M/s. Anitha Cashew Industries, Hebri, Karkala Taluk, Dakshina Kannada District

M.L. Pendse, C.J.-The respondent is engaged in the business of manufacture and sale of cashew kernel and is a registered ''dealer'' under the provisions of the Karnataka Sales Tax Act, 1957. The respondent is recognised as a "tiny sector industrial unit" as per Notification No. FD 51 CSL 83(V), dated 31-3-1983 issued by the Government of Karnataka in exercise of powers under clause (b) of sub-section (1) of Section 8-A of the K.S.T. Act. The exemption notification exempts with effect from 1-4-1983 the tax payable on the turnover of goods manufactured in Karnataka and sold by all tiny sectors. The exemption is available for a period of five years from the date of commencement of commercial production subject to certain restrictions and conditions. It is not necessary to set out the restrictions and conditions in this judgment. Clause (2) of the exemption notification defines the expression "tiny sector industrial unit" as an industrial unit which is registered with the Director of Karnataka as a ''small scale industry'' in the tiny sector.

Respondent claimed that the Assessing Authority should extend the benefit of exemption notification to its unit. The appellant declined to grant benefit in respect of tax payable under Section 6 of the Act on the purchase turnover of cashew nuts. The appellant granted exemption only in respect of sales turnover. The respondent thereupon approached this Court by filing writ petition under Article 226 of the Constitution and the relief sought was that the respondent should be exempted from levy of tax under Section 6 of the Act on the purchase turnover of cashewnuts. Respondent also sought refund of the tax collected by the appellant in respect of purchase turnover. The learned Single Judge, by the impugned judgment, granted the relief sought for by quashing the endorsement of the Commercial Tax Officer, issued on 22-1-1988. The learned Single Judge granted declaration that the respondent is entitled to exemption from purchase tax under Section 6 of the Act. The learned Judge also declared that the benefit of the judgment should be made available to all similarly situated manufacturing units. The decision of the learned Single Judge is under challenge.

The learned Government Pleader appearing on behalf of the appellant submitted that the impugned decision suffers from serious infirmity. It was urged that the exemption notification clearly provides exemption in respect of turnover of goods manufactured in Karnataka and sold by tiny sector industrial units. In other words, the exemption is available in respect of sales turnover and not purchase turnover. The Government Pleader contended, and in our judgment, with compoundable merit, that when the exemption notification is clear and is not ambiguous, it was not open for the learned Single Judge to introduce the word "purchase turnover" and grant the relief to the respondent. The submission is correct and deserved acceptance. It is well-settled by catena of decisions that exemption notification is a departure from regular rule and a person claiming benefit under such notification must establish that claim falls within the four corners of the notification. It is not permissible for the Court to read the notification in a manner which would require addition of certain words. A plain reading of the notification makes it clear and indeed, Mr. Indra Kumar appearing for the respondent could not dispute that the exemption was available only in respect of sales turnover and not purchase turnover. Mr. Indra Kumar submitted that if the exemption under the notification is not made available to purchase turnover, then the respondent will not get any benefit in payment of tax under Section 6 of the Act. The contention of the learned Counsel cannot be sustained because it is not permissible to add words to the exemption notification to ensure that the respondent gets benefit of the exemption. The Court must read the exemption notification as it stands and it is not open for the Court to read the same in a manner to determine whether the assessee gets the benefit or not. The mere fact that the respondent may not get benefit, is not sufficient to introduce additional word in the notification to make exemption available for purchase turnover. In our judgment, the learned Single Judge was clearly in error to accede to the contention of the learned Counsel and granting the relief.

Mr. Indra Kumar referred to the Division Bench judgment in the case of Commercial Tax Officer v Virupaksha Enterprises and Others, W.A. Nos. 2137 to 2145 of 1989, DD: 5-7-1990 and submitted that the case before the Division Bench was converse to the case in hand and in view of the decision of the Division Bench, the benefit of the exemption notification shall be made available in respect of purchase turnover. It is not possible to accede to the submission. The decision cannot have any application to the issue of correct reading of the exemption notification. We do not read the Division Bench judgment as introducing the words in the exemption notification to make the benefit available for purchase turnover. In our judgment, the decision of the Division Bench has no application to the facts of the present case.

Accordingly, the appeal is allowed and the impugned judgment in M/s. Anitha Cashew Industries, Hebri v Commercial Tax Officer, II Circle, Udupi and Another, 1991(35) Kar. L.J. 304, is set aside and the petition filed by the respondent stands dismissed. In the circumstances of the case, there will be no order as to costs.