The Supreme Court on Monday ruled that soft drinks major Pepsico India Holding was entitled to sales tax exemption of around Rs 70 crore in Kerala, overturning a Kerala High Court judgment in this regard.
A Bench headed by Justice S B Sinha, while setting aside the Kerala High Court judgment that denied the benefit of sales tax exemption to the soft drinks major, imposed a cost of Rs one lakh on the company for its "conduct" during the hearing of the petition.
Pepsico India Holding had challenged the High Court's ruling that upheld the Deputy Commissioner of Commercial Taxes' order that effectively denied the firm sales tax exemption.
The Kerala government in 1993 had issued a notification that gave sales tax exemption to new small, medium and large-scale industrial units for seven years from the date of commencement of commercial production.
However, the state government withdrew the exemption for all industrial units except those that had taken effective steps to set up new industrial units prior to January 1, 2000, or which had commenced commercial production on or before December 31, 2001.
Pepsico had contended it started production much before the scheduled date.