2006 (3) TMI 694 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of tax entry for plastic water tanks - Entry 19 vs. Entry 187 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957.

Analysis:
The case involves a dispute regarding the taxability of plastic water tanks under the Andhra Pradesh General Sales Tax Act, 1957. The petitioner argues that the goods should be taxed under entry 19 of the Act, whereas the revisional authority taxed them under entry 187. Entry 19, modified in 1997, covers packing materials like bottles and containers. The petitioner contends that plastic water tanks fall under sub-entry (iv) of entry 19 as packing material. However, the Revenue argues that since the tanks are used for storage, not carrying water, they should be taxed under entry 187, which includes articles of plastics. The Karnataka High Court previously held that a plastic water tank is a container. Another case involving plastic cups and tumblers concluded that they were containers falling under entry 19. The Supreme Court's judgment on egg trays as containers was cited in support.

The High Court found the impugned orders unsustainable based on previous judgments and the nature of the goods. The court addressed the objection that the orders were appealable and the petitioner should have filed an appeal. While acknowledging the existence of alternative remedies, the court noted that it could entertain the matter under Article 226 of the Constitution of India in cases of manifestly erroneous orders. Consequently, the court allowed the writ petitions, setting aside the impugned orders without imposing costs. The rule nisi was made absolute, granting relief to the petitioner in both cases regarding the tax treatment of plastic water tanks.