VAT/CST/Excise/Customs : Kerala VAT : Based on HSN classification, 'Ujala Supreme' and 'Ujala Stiff and Shine' are classifiable as 'Synthetic organic colouring matter-Acid Violets' and 'Polymers of vinyl acetate' respectively under List A of Third Schedule to Kerala VAT Act (tax 4%); they cannot be classified under residual entry (tax 12.5%) based on common parlance or end-use based test
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[2015] 55 taxmann.com 420 (SC)
SUPREME COURT OF INDIA
M.P. Agencies
v.
State of Kerala*
DIPAK MISRA AND ABHAY MANOHAR SAPRE, JJ.
CIVIL APPEAL NOS. 1440 OF 2010
4397-4409, 4565, 4610-4616, 4815-4818 OF 2012 & 3015 OF 2015
MARCH 18, 2015
Section 6, read with Second and Third Schedule, of the Kerala Value Added Tax Act, 2003 - Classification - Fabric Whiteners and Stiffeners - Assessee purchased 'Ujala Supreme' and 'Ujala Stiff and Shine' from Jyothi Laboratories who had paid VAT thereon at 4 per cent treating same as 'industrial inputs' under List A of Third Schedule - Assessee sought to classify them under List A of Third Schedule 'industrial inputs' as follows : (a) 'Ujala Supreme' as 'Synthetic organic colouring matter-Acid Violets' under Entry 155(8)(d) ibid with HSN Heading 3204.12.94 and, (b) 'Ujala Stiff and Shine' as 'Polymers of vinyl acetate' under Entry 118(5) ibid with HSN Heading 3905; and accordingly, both liable to tax at 4 per cent - Department argued that said goods were classifiable under 'residual entry No. 103' of Notification 82/2006 issued under section 6 as per common parlance test and liable to tax at 12.5 per cent - HELD : As per section 6 read with Interpretative Rules : (a) where commodities have been given HSN numbers, same meaning would be adopted; (b) for entries without HSN numbers, common or commercial parlance test would apply; (c) in case of inconsistency between meaning of a commodity without HSN number and a commodity with HSN number, classification would be preferred under commodity with HSN number; thus, primacy is given to HSN number classification - Department had not sought to classify said goods under any other Entry in Notification 82/2006; it had merely sought to classify under 'residual entry No. 103' and said residual entry would not apply if classification can be carried out under Third Schedule - Said goods have been held in various judgments of CESTAT to be covered under HSN Heading 3204.12.94 and 3905 respectively and hence, both are covered under Entries 115(8)(d) and 118(5) of List A of Third Schedule and liable to tax at 4 per cent - Hence, classification under residuary entry 103 would not be attracted - Hence, judgment of High Court was set aside but with clarification that payments already made would not be entitled to any refund [Paras 18 to 40] [In favour of assessee]
Circulars and Notifications : Notification SRO 82/2006, dated 21-1-2006 (Entry 27, 103)
Interpretation of Statutes : Harmonized System of Nomenclature v. Common Parlance Test
■■■
[2015] 55 taxmann.com 420 (SC)
SUPREME COURT OF INDIA
M.P. Agencies
v.
State of Kerala*
DIPAK MISRA AND ABHAY MANOHAR SAPRE, JJ.
CIVIL APPEAL NOS. 1440 OF 2010
4397-4409, 4565, 4610-4616, 4815-4818 OF 2012 & 3015 OF 2015
MARCH 18, 2015
Section 6, read with Second and Third Schedule, of the Kerala Value Added Tax Act, 2003 - Classification - Fabric Whiteners and Stiffeners - Assessee purchased 'Ujala Supreme' and 'Ujala Stiff and Shine' from Jyothi Laboratories who had paid VAT thereon at 4 per cent treating same as 'industrial inputs' under List A of Third Schedule - Assessee sought to classify them under List A of Third Schedule 'industrial inputs' as follows : (a) 'Ujala Supreme' as 'Synthetic organic colouring matter-Acid Violets' under Entry 155(8)(d) ibid with HSN Heading 3204.12.94 and, (b) 'Ujala Stiff and Shine' as 'Polymers of vinyl acetate' under Entry 118(5) ibid with HSN Heading 3905; and accordingly, both liable to tax at 4 per cent - Department argued that said goods were classifiable under 'residual entry No. 103' of Notification 82/2006 issued under section 6 as per common parlance test and liable to tax at 12.5 per cent - HELD : As per section 6 read with Interpretative Rules : (a) where commodities have been given HSN numbers, same meaning would be adopted; (b) for entries without HSN numbers, common or commercial parlance test would apply; (c) in case of inconsistency between meaning of a commodity without HSN number and a commodity with HSN number, classification would be preferred under commodity with HSN number; thus, primacy is given to HSN number classification - Department had not sought to classify said goods under any other Entry in Notification 82/2006; it had merely sought to classify under 'residual entry No. 103' and said residual entry would not apply if classification can be carried out under Third Schedule - Said goods have been held in various judgments of CESTAT to be covered under HSN Heading 3204.12.94 and 3905 respectively and hence, both are covered under Entries 115(8)(d) and 118(5) of List A of Third Schedule and liable to tax at 4 per cent - Hence, classification under residuary entry 103 would not be attracted - Hence, judgment of High Court was set aside but with clarification that payments already made would not be entitled to any refund [Paras 18 to 40] [In favour of assessee]
Circulars and Notifications : Notification SRO 82/2006, dated 21-1-2006 (Entry 27, 103)
Interpretation of Statutes : Harmonized System of Nomenclature v. Common Parlance Test
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