Abdulla vs. Authority For Clarification

Held

The Court held that the amendment introduced through S.R.O. No. 521/2019 has substantially erased the effect of the clarification issued in the order dated August 22, 2017. Therefore, for cases applicable to S.R.O. No. 753/2011 read with S.R.O. No. 521/2019, only the latest amendment is applicable. The Court reasoned that S.R.O. No. 753/2011 remains in effect along with S.R.O. No. 521/2019, and the clarification order dated August 22, 2017, which was based on the original text of S.R.O. No. 753/2011, is superseded for all purposes. The ratio decidendi is that subsequent legislative or executive amendments that alter the basis of a prior clarification render that clarification ineffective.

Facts

The appellant, Abdulla, a registered dealer under the Kerala Value Added Tax Act, 2003, engaged in purchasing raw rubber, filed an appeal challenging 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 tax under the VAT Act, with a 0% CST rate applicable with 'C' Form. It also stated there would be no claim for input tax credit or special rebate, and no 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.

Key Issues

1. Whether the clarification order dated August 22, 2017, issued by the Department of Commercial Taxes, Kerala, has been superseded by the subsequent amendment notification S.R.O. No. 521/2019. Petitioner's Contention: The petitioner, through their counsel, argued that the subsequent amendment notification S.R.O. No. 521/2019 has substantially altered or erased the effect of the earlier clarification order dated August 22, 2017. Therefore, the latest amendment should govern the applicable position. Revenue's Contention: The Government Pleader, representing the respondents, did not present any arguments against the petitioner's contention regarding the superseding effect of the new notification. The judgment notes that the court's attention was invited to the operative portion of the clarification and the subsequent amendment.