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2006 (2) TMI 603 - HC - VAT and Sales TaxClassification of goods - Clarification of the rate of tax applicable - vacuum flask, kerosene wick stove and utensils - Karnataka Value Added Tax Act, 2003 ( the KVAT Act ) - whether the word utensils includes a stove and flask? - HELD THAT - A vessel in a kitchen without a stove is of no use. Similarly, a stove without a vessel is also of no use in a kitchen. They are complementary to each other. Only when both of them are put to use each one of the goods would be useful to a common man. A kitchen without a stove is unthinkable. Irrespective of the strata to which a person belongs every house will have a kitchen and every kitchen will have a stove to cook the food. It is of common use. If we go by the dictionary meaning, a tool or an implement serving a useful purpose, especially for domestic, that is used in a kitchen is a utensil. All utensils are not vessels. But all vessels are utensils. However, the word utensil includes a vessel and all other tools and implements which are of use for domestic purpose and in a kitchen. If the legislative intent is kept in mind and the meaning of the word utensil as gathered from the aforesaid definition is taken into consideration and the way the entry is worded namely all utensils including and when what is excluded from this definition is expressly stated it is clear that a stove whether it is a LPG stove or kerosene wick stove would fall within the words all utensils and falls within entry No. 5 of the Third Schedule to the Act. In so far as stainless steel vacuum flask is concerned, there should not be any difficulty as it is a vessel which is used for storing beverages like coffee, tea, milk, etc., at a particular temperature which is used by common man in the house or even outside the house. Merely, because a stove or flask is used outside the house also and in hotels and restaurants and in commercial enterprises, it cannot be said that it does not fall within the word utensil . Having regard to the use of a stove or a flask in kitchen by a common man, the use of those items commercially outside the house is negligible. That cannot be the determining factor. Thus, the findings recorded by the authority that stoves have a general purpose use both domestic and commercial, it cannot be called as kitchen utensil for purposes of the KVAT Act and that the vacuum flask has a general purpose and they are not only used in household and in commercial establishments, hospitals, etc., for carrying a liquid it cannot make flask a kitchen utensil do not stand to reason. Therefore, the said ruling by the authority holding that the stoves and flasks are to be taxed u/s 4(1)(b) of the Act at 12.5 per cent is hereby set aside. Hence, we are of the view that the phrase utensils used in entry No. 5 includes the stainless steel LPG stove, kerosene stove and vacuum flask which are of common utility in a household and the same fall within entry No. 5 and liable to be taxable only at four per cent. Thus, order dated September 30, 2005 is modified to the extent indicated above and the appeal is allowed.
Issues:
Interpretation of the term "utensils" under the Karnataka Value Added Tax Act, 2003 for tax rate determination on stainless steel LPG stove, kerosene wick stove, and stainless steel vacuum flask. Analysis: The appellant, a registered dealer under the KVAT Act, challenged the Authority's order levying a 12.5% tax rate on stainless steel LPG stove, kerosene wick stove, and stainless steel vacuum flask. The appellant believed these items fell under the definition of utensils and should be taxed at 4%. The Third Schedule of the Act previously included aluminum utensils but was amended to include "all utensils including pressure cookers and pans." The appellant argued that stoves should be considered utensils as they are kitchen appliances. The Authority, however, held that stoves are not utensils as they are appliances for kitchen use, not tools or instruments. The court analyzed various dictionary definitions of "utensil" and concluded that stoves and flasks are utensils due to their common utility in households, falling within the definition of entry No. 5 of the Third Schedule. The court emphasized the legislative intent behind the tax rates, noting that utensils are commonly used items in households. It highlighted the complementary nature of stoves and vessels in a kitchen, emphasizing their common use. The court also referred to previous judgments emphasizing that taxing statutes should be understood in ordinary parlance and commercial usage. It rejected the Authority's narrow interpretation and ruled that stoves and flasks are utensils, taxable at 4%, not 12.5%. The court modified the Authority's order, allowing the appeal without costs.
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