South Indian Plywood Industries vs State of Kerala

Om Prakash, C.J.—In this Tax Revision relating to the assessment year 1990-91, filed by the revision-Petitioner (hereinafter referred to as ''the Assessee'') the only question for consideration is whether veneer plywood manufactured by the Assessee falls under Entry 180 of the First Schedule or under Entry 5 of the Fifth Schedule to the Kerala General Sales Tax Act (briefly, ''the Act''). Entry 180 of the First Schedule and Entry 5 of the Fifth Schedule are as follows:

Splints and veneers for matches.

Plywood, veneer plywood and hardboards and veneers not covered by Entry 180 of the First Schedule.

By notification S.R.O. No. 148/72, the Government declared exemption in respect of purchase tax payable u/s 5A of the Act on the purchase of softwood by manufacturers of splints and veneers. The said notification is extracted below:

In exercise of the powers conferred by the Government of Kerala hereby make an exemption in respect of the tax payable u/s 5A of the said Act on the purchase of softwood by the manufacturers of splints and veneers within the State, provided that the splints and veneers manufactured by them are liable to tax at their hands either under the said Act or under the Central Sales Tax Act, 1956 (Central Act 74 of 1956).

By virtue of the notification, the Assessee claimed exemption in respect of the purchase turnover of softwood on the ground that it was engaged in the manufacture of veneers, falling under Entry 180 of the First Schedule. The assessing officer, the first appellate authority and the Sales Tax Appellate Tribunal consistently held that the Assessee was engaged in the manufacture of veneer plywood, falling under Entry 5 of the Fifth Schedule and, therefore, they held that the Essessee was not entitled to exemption under the notification. From the perusal of Entry 180 of the First Schedule and the notification, it is manifest that only the manufacturers of splints and veneers within the State are entitled to exemption on the purchase turnover of softwood, which is the raw material for the manufacture of splints and veneers. The Assessee, admittedly, was not engaged in the manufacture of splints and veneers together. The case of the Assessee was that it manufactured veneers. The appellate authority recorded a finding of Tact that the Assessee was engaged in the manufacture of veneer plywood, falling under Entry 5 of the Fifth Schedule. The assessing authority and the first appellate authority also found the same way. The submission of learned Counsel for the Assessee before us is that veneer as envisaged by Entry 180 and Entry 5 in the First and Fifth Schedule respectively, are the same commodity. This submission cannot be accepted, inasmuch as, Entry 5 of the fifth Schedule refers to veneer plywood and not the veneer simpliciter. Entry 180 of the First Schedule refers to veneer simpliciter. From the notification, it is amply clear that only the manufacturers of splints and veneers together are entitled to exemption. The Assessee, admittedly, manufactured one of the items and not bath, and we ate, therefore, of the considered view that the Assessee is not co vered under the notification. The cardinal principle of law is that entries in fiscal statute should be construed strictly. It is also trite that the words and phrases used by the Legislature should be read as such without substracting from and adding into them any foreign words. It is well-settled that every word used by the Legislature is to be attached sigmiicance, inasmuch as no word which is irrelevant, supprfluous or redundant is used by the Legislature. The expression: "manufacturers of splints and veneers", occurring in the notification, is to be construed strictly and on the face of it. The manufacturers of splints and veneers and the manufacturer of one of the items cannot be equated, and the two arc different. Admittedly, the Assessee is not a manufacturer of splints and veneers and, therefore, it will not be covered by the notification.

Relying on Southern Veneers and Wood Works Ltd. v. State of Kerala (1997) 104 S.T.C. 114, learned Counsel for the Assessee urged that the veneer in the manufacture of which the Assessee is engaged, falls under Entry 180 of the First Schedule and, therefore, the Assessee is entitled to exemption. In Southern Veneers and Wood Works Ltd. (1997) 104 S.T.C. 114 (supra), a Division Bench of this Court held that the Assessee was engaged in the manufacture of veneers and, therefore, took the view that that was covered by Entry 94 of the First Schedule, analogous to Entry 180 of the First Schedule. It is on that premises, the Division Bench held that the case of the Assessee in that authority was covered by Entry 94 of the First Schedule and not by Entry 95 of the First Schedule, which is analogous to Entry 5 of the Fifth Schedule. The case of Southern Veneers and Wood Works Ltd. (1997) 104 S.T.C. 114(supra) in which the Division Bench held that the Assessee was engaged in the manufacture of veneers and not in the manufacture of veneer plywood, cannot be an authority for the purpose of the case at hand in which a consistent finding has been recorded by the assessing officer and the appellate authorities that the Assessee was engaged in the manufacture of veneer plywood, covered by Entry 5 of the Fifth Schedule. Moreover, in Southern Veneers and Wood Works Ltd. (1997) 104 S.T.C. 114 (supra) interpretation of the notification granting exemption was not involved and for that reason also the decision in Southern Veneers and Wood Works Ltd.(1997) 104 S.T.C. 114 (supra) cannot be pressed into service by the Assessee.

For these reasons, we are of the view that the Assessee is not entitled to exemption on the purchase turnover of softwood, used by the Assessee for the manufacture of veneer plywood, falling under Entry 5 of the Fifth Schedule.

In the result, the Revision Petition fails and is dismissed.