2010 (1) TMI 1134 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Taxability of the item "Double Mazza" under the West Bengal Sales Tax Act, 1994.
2. Applicability of additional excise duty and its impact on sales tax.
3. Legal correctness of the orders passed by the assessing, appellate, and revisional authorities.

Summary:

1. Taxability of "Double Mazza":
The primary issue was whether "Double Mazza," sold in a pouch containing both "tobacco" and "pan masala," is a taxable item. The assessing authority determined that since the item is sold as a whole and cannot be segregated by the customer, it should be taxed under Schedule IV of the 1994 Act. The appellate authority upheld this view, stating that "pan masala" is not "zarda" or tobacco and falls under Schedule IV, making it taxable. The revisional authority also confirmed this, concluding that "pan masala" with "tobacco" does not fall within entry 82 of Schedule I to the 1994 Act.

2. Applicability of Additional Excise Duty:
The applicant argued that since additional excise duty was paid, sales tax should not be levied. However, the Tribunal noted that there is no exact correlation between the liability to pay additional excise duty and the levy of sales tax, as established by the Calcutta High Court in Prime Impex Limited v. Assistant Commissioner of Commercial Taxes [2002] 127 STC 23 (Cal).

3. Legal Correctness of Orders:
The Tribunal examined the orders of the assessing, appellate, and revisional authorities. It was observed that the item "Double Mazza" retains the distinct identity of "tobacco" and "pan masala" within the pouch. The Tribunal concluded that it would be unjustified to treat the entire item as an unspecified item. Therefore, the sale prices of "zarda" included in "Double Mazza" should merit exemption under entry 82 of Schedule I to the 1994 Act.

Conclusion:
The Tribunal remanded the matter back to the assessing authority for fresh assessment, instructing them to consider the observations made and allow reasonable opportunity to the applicant. The applicant must disclose the basis of determining the sale price of the disputed item to facilitate a fair assessment. The petition was disposed of with no order as to costs.