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Case Law Details

Case Name : Koluthara Exports Ltd. Vs Union of India (Kerala High Court)
Appeal Number : WP(C) No. 6830 of 2021
Date of Judgement/Order : 28/09/2021
Related Assessment Year :
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Koluthara Exports Ltd. Vs Union of India (Kerala High Court)

In the case of Koluthara Exports Ltd. vs Union of India, the Kerala High Court addressed a significant issue regarding the obligation of authorities to adhere to binding decisions and the legal implications of failing to do so.

Case Background: The petitioner, Koluthara Exports Ltd., challenged two main documents: Ext.P7, an order, and Ext.P9, a communication from the third respondent rejecting a rectification petition against Ext.P7. The company is engaged in processing raw fish and manufacturing frozen fish for export. Believing that their activities qualified as manufacturing and thus were not subject to service tax, the petitioner did not register under the Central Excise Act.

Initial Dispute: On April 16, 2007, the petitioner received a show-cause notice proposing to classify their activities as a service subject to service tax. The adjudicating authorities upheld this classification despite the petitioner’s objections. The petitioner appealed these decisions to the Appellate Tribunal, which ruled in their favor on February 24, 2020 (Ext.P1), determining that their activities constituted manufacturing and were thus exempt from service tax.

Subsequent Proceedings: Despite this ruling, the respondents initiated new proceedings for the financial years 2015-16 and 2016-17, raising the same issue. On February 18, 2019, the assessing authority reaffirmed the demand for service tax. The petitioner then appealed these assessments (Appeals No. 50/2019 and 51/2019) to the third respondent, expecting adherence to the Tribunal’s prior ruling (Ext.P1).

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July 2024