1998 (7) TMI 674 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of plastic roofing material for tax assessment under the Karnataka Sales Tax Act, 1957.

Analysis:
The petitioner, a private limited company, was being assessed for sales tax on plastic roofing sheets obtained through stock transfer within Karnataka. The dispute arose regarding whether the sheets should be taxed as plastic items under entry 7(ii) of Part "P" or as roofing materials under entry 9 of Part "R" of the Second Schedule to the Act. The assessing authority taxed the petitioner under entry 9, considering the dominant use of the sheets for roofing. The petitioner contended that the sheets should be taxed under entry 7(ii) as plastic roofing material. The matter proceeded to appeals, where the Tribunal upheld the tax assessment under entry 9, leading to the current dispute.

The main issue for consideration was whether the plastic roofing sheets fell under entry 70 of the First Schedule (entry 7(ii) of Part "P") or under entry 78 of the First Schedule (entry 9 of Part "R") of the Second Schedule to the Act. The relevant entries were examined, with entry 7(ii) covering all forms of plastic products and entry 9 encompassing various roofing materials. The Court noted that corrugated translucent sheets used as roofing material were made of plastics. The interpretation of the entries was crucial to determine the tax classification.

The Court emphasized that all plastic products fell under entry 70, automatically excluding them from entry 78. It highlighted the legislative intent to cover all plastic articles under entry 70, ensuring full effect to the words "all articles made of plastics." The Court cited a previous decision to support its interpretation, emphasizing that full effect should be given to all words in taxing statutes. It concluded that the plastic roofing sheets were taxable under entry 7(ii) as plastic articles, not under entry 9 as roofing materials.

In contrast to a previous judgment cited by the opposing counsel, the Court found the facts of the current case distinct. The judgment in question did not apply to the present circumstances. Consequently, the Court allowed the revision petitions, holding that the plastic roofing sheets were classified under entry 7(ii) of Part "P" of the Second Schedule to the Act for tax assessment purposes.