In Brief
This case concerns the correct starting date for a five-year sales tax exemption granted to export-oriented manufacturing units under a Kerala notification (SRO 1727/1993). The unit (AKAY Flavours) argued exemption should begin from when it started production (October 1995), while the revenue argued it should begin from formal approval by the Central Government (October 1994). The Supreme Court held that "approval" means unambiguous written approval by the Central Government, not a preliminary letter of intent. The Green Card issued on 27.10.1994 was the definitive approval. Exemption therefore commenced from that date, not from production commencement. The Court rejected linking exemption to production date as it would inject subjectivity and reward operational delays. Appeals partly allowed accordingly."
The lawyer headnote and full judgment text are available to registered users.