2010 (1) TMI 1108 - HC - VAT and Sales Tax

Summary

Issues:
1. Clarification on the classification of a plastic cover used in the manufacture of electronic choke under the Kerala Value Added Tax Act, 2003.
2. Interpretation of entries 174(1)(a) and 103 of S.R.O. No. 82 of 2006 in relation to the product in question.

Analysis:
1. The appeal challenged the Commissioner's clarification that the plastic cover used in making electronic chokes falls under entry 103 of S.R.O. No. 82 of 2006, taxable at 12.5%. The appellant argued that the product should be classified under entry 174(1)(a) as "similar articles" to plastic containers for audio or video cassettes, cassette tapes, and floppy discs. However, the court rejected this contention, emphasizing that the appellant's cover is an essential component of the choke, providing ventilation, space for electric connections, and attachments for installation. It was deemed a part of the choke used in manufacturing, not falling under the residuary category of entry 174(1)(a).

2. The court then deliberated on whether the product could be classified under entry 103 of S.R.O. No. 82 of 2006, the residuary entry covering goods not specified elsewhere. The Government Pleader suggested it might fit under entry 33(8) due to the choke coils' classification under HSN Code No. 8504.90.90 of the Central Excise Tariff Act. However, the court deemed this consideration unnecessary, as the tax rate of 12.5% remained the same regardless of the specific entry under which the product fell. Consequently, the court dismissed the appeal, upholding the Commissioner's classification of the plastic cover under entry 103 and the corresponding tax rate.