MRF Limited Vs State of Kerala (Kerala High Court)
Summary: The Kerala High Court allowed the writ petition filed by M/S. MRF Limited concerning its entitlement to sales tax exemption for “compound rubber” under S.R.O. No.1729/1993. The petitioner, which was running a Medium-Scale Industrial Unit engaged in the manufacture and sale of tyres, tubes, tread rubber, etc., had claimed exemption in respect of additional investments and modernization carried out in its unit. Eligibility certificates were issued by the Director of Industries and Commerce in respect of the additional investment and modernization, following which orders granting exemption were issued. However, insofar as “compound rubber” was concerned, the benefit was restricted up to 14.01.1998 by relying on the amendment to S.R.O. No.1729/1993 made through S.R.O. No.38/1998 with effect from 15.01.1998. The State Level Committee rejected the petitioner’s appeal, resulting in the present writ petition.
The petitioner relied upon S.R.O. No.1729/1993 and the negative list introduced by S.R.O. No.38/1998 and contended that a Division Bench of the Kerala High Court had already examined a similar exclusion contained in S.R.O. No.642/1981, as amended by S.R.O. No.1516/1990, in State of Kerala v. M.R.F Limited., [(2016) 90 VST 304 (Ker)]. According to the petitioner, the Division Bench had specifically considered the manufacturing process of compound rubber and held that it could not merely be treated as a product subjected to processing so as to deny the exemption. The State contended that the notification examined in the earlier Division Bench judgment and S.R.O. No.1729/1993 involved in the present proceedings were different and, therefore, the earlier ruling could not govern the present claim.
