A.M.Rahman vs. Authority For Clarification Under Section 94 Of The Kerala Value Added Tax Act

Held

The Court held that the amendment introduced through S.R.O. No. 521/2019 substantially erased the effect of the clarification order dated August 22, 2017. The Court found that the latest amendment is the applicable position for cases attracted to S.R.O. No. 753/2011 read with S.R.O. No. 521/2019. Therefore, the clarification order No. CT/815/17-C3 dated August 22, 2017, was declared to have been superseded by S.R.O. No. 521/2019 dated August 7, 2019. The reasoning is based on the chronological order of events and the legislative intent behind the amendment, which made the original notification optional. The ratio decidendi is that subsequent amendments to statutory notifications supersede prior conflicting clarifications based on the original text. The appeal was disposed of accordingly.

Facts

The appellant, A.M. Rahman, proprietor of Arecode Traders, filed an appeal against a clarification order dated August 22, 2017, issued by the Department of Commercial Taxes, Kerala. This order, referencing S.R.O. No. 753/2011, clarified that interstate sales of rubber procured from agriculturists should have suffered VAT, with a 0% CST rate applicable with a 'C' Form. It also stated there would be no claim for input tax credit/special rebate or refund of tax paid on purchases. During the pendency of the appeal, the Government issued S.R.O. No. 521/2019 on August 7, 2019, amending S.R.O. No. 753/2011. This amendment made the original notification optional for those who continued to pay tax under sub-section (1) of Section 8 of the Central Sales Tax Act, 1956, for the period up to June 30, 2017, provided 4% or 5% tax remittance was ensured.

Key Issues

1. Whether the clarification order dated August 22, 2017, issued by the Department of Commercial Taxes, Kerala, stands superseded by the subsequent amendment notification S.R.O. No. 521/2019 dated August 7, 2019, concerning the interstate sale of natural rubber. (Question of law) Petitioner's Contention: The petitioner, through their counsel, argued that the amendment notification S.R.O. No. 521/2019 has substantially erased the effect of the earlier clarification order dated August 22, 2017. Therefore, the latest amendment should be the applicable position. Revenue's Contention: The revenue, represented by the Senior Government Pleader, did not record any specific arguments against the petitioner's contention regarding the superseding effect of the amendment. The judgment notes that the court's attention was invited to the operative portion of the clarification and the subsequent amendment.