In M/S. L.G Electronics India v. The Assistant Commissioner (Assessment), Department Of Commercial Taxes, the Kerala High Court held that concessional rate of tax under the provisions of the Kerala Value Added Tax is not applicable to goods supplied to Unit-run canteens from the assessment year 2014-15.
The petitioners, in the instant case, claimed that they are entitled to the benefit of concessional rate of tax in respect of the supply of products effected by them to canteens run by units of the Military, Navy and Air force.
The department took a view that the benefit of concessional rate of tax was not available in respect of the supplies effected to the Unit run canteens.
According to the petitioners, as per the statutory provisions, the benefit of concessional rate of tax is applicable, not only in respect of supplies effected to the Canteens Stores Department, but also in respect of supplies effected to the Unit run canteens of the Military, Navy and Air Force.
Justice Jayasankaran Nambiar analyzed the provisions of s. 6(1) of the KVAT Act and said that “taking note of the distinction between a sale effected directly to the Canteen Stores Department and sales effected directly to Unit-run canteens of the Military, Navy, Air force etc., the State Government decided to depart from the earlier practice of granting concessional rate of tax even in respect of supplies effected to Unit-run canteens and confined the benefit of concessional rate of tax only to supplies effected to the Canteen Stores Department. The amendment, however, was to take effect only from the assessment year 2014-15, and for the prior period, it was felt not necessary to interfere with the benefit of concessional rate of tax, that was already extended to unit run canteens.”
Quashing the assessment orders, the Court said that they were passed without taking note of the amendment which came into effect only from the assessment year 2014-15.
However, the Court clarified that the petitioner will not be entitled to the benefit of the concessional rate of tax in respect of supplies effected to Unit-run canteens.
Read the full text of the Judgment below.
