The Supreme Court today refused to grant an exemption to the Eveready Industries India Ltd under the KST Act. The appellant is a registered dealer under the Karnataka Tax on Entry of Goods Act, 1979. The Department of Revenue rejected the claim of the Appellants for exemption.from payment of entry tax on raw material under Notification/Government Order No.CI.92.SPI.1997 dated 25.06.1997 for the three assessment years, i.e. 1997-1998, 1998-1999 and 1999-2000. On appeal, the Tribunal also confirmed the said order. Aggrieved by this, the appellants have challenged the legality and validity of the order dt.12.01.2005 before the High Court of Karnataka. The High Court took the view that the appellant is liable to pay the tax under the provisions of the KST Act and is not entitled to exemption from payment of entry tax on raw material under Notification/Government Order No.CI.92.SPI.1997 dated 25.06.1997. The appellants, therefore, filed an appeal before the Supreme Court challenging this.
The Supreme Court, while dismissing the appeal, affirmed the impugned order and held that the appellants are not entitled to the exemption claimed. In the words of Sikri. J., “It is a different matter that once the conditions contained in the exemption notification are satisfied and the assessee gets covered by the exemption notification, for the purpose of giving benefit notification has to be construed liberally. However, in the present case, the appellant has not been able to cross the threshold and to find the entry under notification dated 31.03.1993 for the reasons mentioned above. Therefore, we have no option but to hold that the appellant was not entitled to exemption from entry tax.”
Read the full text of the Judgment here.
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