STATE OF KERALA versus M/S AKAY FLAVOURS AND AROMATICS LTD.

STATE OF KERALA versus M/S AKAY FLAVOURS AND AROMATICS LTD.

The Supreme Court held that the letter dated 16.12.1993 was a conditional permission/letter of intent and that clear and unambiguous approval by the Central Government was given on 27.10.1994 by issuance of the Green Card; therefore the five-year exemption under SRO 1727/1993 is to be reckoned from 27.10.1994 and not from the date of commencement of production.

Parties
Appellant/revenue: State of Kerala; Respondent/assessee: M/s Akay Flavours and Aromatics Ltd.
Jurisdiction
India
Judgment Date
02 February 2023
Procedural Posture
Civil Appeal / Judgment of the Supreme Court on Appeal
Outcome
Appeals partly allowed
Legal Topics
Exemption Notification SRO 1727/1993, Date of Approval by Central Government, Commencement of Exemption, Interpretation of Government Permission/letter of Intent
Taxation Administrative Law Statutory Interpretation Exemption Notification SRO 1727/1993 Date of Approval by Central Government Commencement of Exemption Interpretation of Government Permission/letter of Intent

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Parties

State of Kerala

Appellant/revenue

M/s Akay Flavours and Aromatics Ltd.

Respondent/assessee

Procedural Posture

Civil Appeal / Judgment of the Supreme Court on Appeal

Legal Issues

  1. 1 Whether the five year exemption under SRO 1727/1993 commences from the date of approval by the Central Government or from the date of commencement of production
  2. 2 Whether the letter dated 16.12.1993 constituted approval by the Central Government or was only a permission/letter of intent
  3. 3 Whether the appropriate reckonable date for the exemption in this case is 27.10.1994

Ratio Decidendi

The Supreme Court held that the letter dated 16.12.1993 was a conditional permission/letter of intent and that clear and unambiguous approval by the Central Government was given on 27.10.1994 by issuance of the Green Card; therefore the five-year exemption under SRO 1727/1993 is to be reckoned from 27.10.1994 and not from the date of commencement of production.

Court Disposition

Appeals partly allowed

Orders

  • Date of approval for the purposes of SRO 1727/1993 held to be 27.10.1994
  • The assessee could avail the five-year exemption from 27.10.1994