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1995 (3) TMI 462 - HC - VAT and Sales Tax
Issues:
1. Exemption on sales turnover of dry green garlic as vegetable. 2. Taxation of turnover on sales of salt petre as a chemical. Issue 1: Exemption on sales turnover of dry green garlic as vegetable In this case, the department filed revision petitions challenging the Tribunal's grant of exemption on the sales turnover of dry green garlic, treating it as a vegetable. The Tribunal based its decision on the interpretation that even if the garlic is dried but not dehydrated, it qualifies as a vegetable under the relevant notification and is exempt from tax. The High Court, after considering previous decisions, including one related to garlic exemption, upheld the Tribunal's decision, stating that the order was in line with the earlier decision of the Court. Therefore, the Court found no reason to interfere with the Tribunal's order granting exemption on the sales turnover of garlic. Issue 2: Taxation of turnover on sales of salt petre as a chemical The second issue revolved around the taxation of sales turnover of salt petre, with the assessing officer considering it a chemical and levying tax at 8%. However, the Appellate Assistant Commissioner and the Tribunal disagreed, assessing it at 4% multi-point, based on a previous decision. The Court heard arguments from both sides, with the department asserting that salt petre falls under the definition of a chemical and should be taxed at 8%. The assessee argued that salt petre is used as an intermediary in manufacturing processes and cited chemical properties from a dictionary. The Court analyzed various decisions, including those from Allahabad and Gujarat High Courts, and concluded that salt petre qualifies as a chemical under the relevant schedule. Therefore, the Court set aside the Tribunal's order and restored the assessing officer's decision to tax salt petre at 8%. In summary, the High Court upheld the exemption on sales turnover of dry green garlic as a vegetable, following previous decisions. Additionally, the Court ruled that salt petre should be taxed as a chemical at 8% based on its properties and relevant legal interpretations, setting aside the Tribunal's decision to tax it at 4%.
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