2010 (6) TMI 720 - HC - VAT and Sales Tax

Whether sheets, plates, semis, i.e., billets, etc., but not finished goods made from them were covered by the said expression of entry 45(b)? Held that - Having regard to the successive notifications prescribing the situs of aluminium plain sheets and in absence of any overwhelming evidence that the same on the basis of the inputs available can be decisively held to be a finished product emanating from the primary metal aluminium, this court is of the view that for the intervening period February 1, 2000 to February 18, 2002 it ought to be regarded as included in entry 45(b) of Schedule II and taxable at four per cent. The finding of the learned revisional authority to the contrary is unsustainable in law and on facts and is thus adjudged as such. In the face of the determination that aluminium plain sheets during the period in question were installed in entry 45(b) of Schedule II of the Act and encompassed in aluminium , the intervention of the revisional authority, when judged by the parameters judicially recognised as peremptory pre-requisites therefor cannot be upheld. The authorities cited are so obviously consistent on the view as noticed hereinabove that no dilation based on individual facts is warranted.In the result the petition is allowed. The impugned notice dated November 7, 2002 and the order dated October 23, 2003/October 31, 2003 of the Deputy Commissioner of Taxes, Guwahati, Zone B, are quashed

Issues Involved:
1. Classification of aluminium plain sheets and extrusions under the Assam General Sales Tax Act, 1993.
2. Jurisdiction and correctness of the revisional authority's intervention under Section 36(1) of the Act.
3. Interpretation of legislative amendments and notifications concerning tax rates for aluminium products.

Detailed Analysis:

1. Classification of Aluminium Plain Sheets and Extrusions:
The main issue revolves around whether aluminium plain sheets and extrusions marketed by the petitioner-firm fall under entry 45(b) of Schedule II of the Assam General Sales Tax Act, 1993, or should be classified under the residuary Schedule III. The petitioner argued that these items should be taxed at four paise in a rupee as per entry 45(b), which includes non-ferrous metals and their alloys but excludes finished goods. The respondents, however, contended that these items are finished products and should be taxed at eight per cent under Schedule III.

2. Jurisdiction and Correctness of Revisional Authority's Intervention:
The revisional authority, exercising powers under Section 36(1) of the Act, set aside the assessment order dated September 15, 2001, which taxed aluminium plain sheets at four per cent. The authority argued that the assessment was erroneous and prejudicial to the interest of the Revenue, asserting that aluminium plain sheets are finished goods and thus should be taxed at eight per cent. The petitioner challenged this intervention, arguing that the assessment did not suffer from jurisdictional errors and that the conditions for invoking Section 36(1) were not met.

3. Interpretation of Legislative Amendments and Notifications:
The court examined various notifications and amendments, particularly the notifications dated January 27, 2000, and February 15, 2002. The petitioner argued that the inclusion of aluminium plain sheets in entry 10 of Schedule IV by the notification dated February 15, 2002, implied that these sheets were covered under entry 45(b) of Schedule II prior to this amendment. The respondents contended that the absence of aluminium sheets in specific terms in the entries indicated that they were intended to be covered by the residuary Schedule III.

Judgment Summary:

On Classification:
The court determined that aluminium plain sheets and extrusions should be included in entry 45(b) of Schedule II for the period from January 1, 2000, to February 18, 2002. The court noted that the term "non-ferrous metal" in entry 45(b) includes various forms of aluminium and is not limited to its primary state. The court rejected the argument that aluminium plain sheets are finished goods, emphasizing that mere change in form and shape does not render a metal a finished product unless it undergoes a transformation into a new commercial commodity.

On Revisional Authority's Jurisdiction:
The court found that the revisional authority's intervention under Section 36(1) was not justified. The assessment made by the Senior Superintendent of Taxes was correct and did not suffer from jurisdictional errors. The court emphasized that the conditions for invoking Section 36(1) were not met, as the assessment was neither erroneous nor prejudicial to the interest of the Revenue.

On Legislative Amendments and Notifications:
The court held that the successive notifications and amendments indicated a legislative intent to classify aluminium plain sheets under entry 45(b) of Schedule II during the relevant period. The court noted that the inclusion of aluminium plain sheets in entry 10 of Schedule IV by the notification dated February 15, 2002, did not imply that these sheets were never covered under entry 45(b) of Schedule II.

Conclusion:
The court allowed the petition, quashing the impugned notice dated November 7, 2002, and the order dated October 31, 2003, of the Deputy Commissioner of Taxes. The court held that aluminium plain sheets were taxable at four per cent under entry 45(b) of Schedule II for the period from January 1, 2000, to February 18, 2002. The parties were left to bear their own costs.

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