2007 (1) TMI 523 - HC - VAT and Sales Tax

Issues Involved:
1. Taxability of "aluminium foils" under the notification dated December 31, 1975.
2. Difference between "aluminium foil" and "aluminium sheets" in commercial parlance.
3. Taxability of laminated and printed aluminium foils.
4. Finality of the Commissioner's determination under section 12A of the Rajasthan Sales Tax Act, 1954.
5. Clarification of the notification dated December 31, 1975 by the notification dated June 13, 1985.
6. Relevance of the functional character/end-use of a commodity for tax purposes.
7. Classification of "aluminium foil" under the tax schedule.
8. Admission of additional evidence by the Rajasthan Tax Board.
9. Waiver of objection by the department regarding additional evidence.
10. Legality and correctness of the findings recorded by the Rajasthan Tax Board.

Detailed Analysis:

1. Taxability of "aluminium foils" under the notification dated December 31, 1975:
The core issue in these revision petitions is whether "aluminium foil" falls under the term "non-ferrous sheets" as per the notification dated December 31, 1975, making it taxable at a concessional rate of one percent. The court noted that the matter had been previously remanded for evidence to determine how "aluminium foil" is understood in trade and common parlance.

2. Difference between "aluminium foil" and "aluminium sheets" in commercial parlance:
The court emphasized that the term "sheet" should be understood in its common and trade meaning. The Tribunal's approach to remand the matter for evidence to determine the popular meaning of "sheet" was upheld by the court.

3. Taxability of laminated and printed aluminium foils:
The court examined whether laminated and printed aluminium foils would still be considered "aluminium foil" under the notification and thus taxable at the concessional rate. The Commissioner had previously determined that laminated and printed foils remain "aluminium foils" and are taxable at one percent.

4. Finality of the Commissioner's determination under section 12A of the Rajasthan Sales Tax Act, 1954:
The court acknowledged that the determination made by the Commissioner under section 12A had attained finality. However, it was open for the department to challenge the taxability of laminated and printed aluminium foils as packing material.

5. Clarification of the notification dated December 31, 1975 by the notification dated June 13, 1985:
The court considered whether the notification dated June 13, 1985, which prescribed the tax rate on "aluminium foil," clarified the earlier notification dated December 31, 1975.

6. Relevance of the functional character/end-use of a commodity for tax purposes:
The court examined whether the functional character or end-use of a commodity is relevant for determining its classification under the tax schedule.

7. Classification of "aluminium foil" under the tax schedule:
The court needed to decide whether "aluminium foil" should be classified as a "sheet," "packing material," or under a residuary entry for tax purposes.

8. Admission of additional evidence by the Rajasthan Tax Board:
The court found that the Tax Board committed material illegality by admitting additional evidence produced by the assessee without giving the Revenue an opportunity to rebut it. The Tax Board did not pass any order admitting the additional evidence, nor was the Revenue given a copy of the application or documents submitted by the assessee.

9. Waiver of objection by the department regarding additional evidence:
The court rejected the assessee's argument that the department waived its objection by not raising it earlier. The court held that the department could not be denied the opportunity to rebut the evidence produced by the assessee at the second appellate stage.

10. Legality and correctness of the findings recorded by the Rajasthan Tax Board:
The court concluded that the findings of the Tax Board were materially influenced by the additional evidence produced by the assessee without proper procedure. Therefore, the order dated February 8, 1999, and subsequent orders based on it were set aside.

Conclusion:
The court allowed the revision petitions, set aside the order dated February 8, 1999, and remanded the matter back to the Tax Board to decide the appeals afresh, considering the evidence produced by both parties. Both parties were directed to appear before the Tax Board on February 19, 2007.

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