2012 (12) TMI 959 - HC - VAT and Sales Tax

Summary

Issues involved: Classification of product as fertilizer for taxation under Uttarakhand Value Added Tax Act.

Summary:
The High Court considered two revisions concerning the classification of a biodynamic preparation product as fertilizer for taxation purposes. The product was marketed as a catalyst for compost heap conversion into fertilizer. The Department disputed its classification as fertilizer, citing the lack of a specific definition in the Uttarakhand Value Added Tax Act. Despite evidence of the product being purchased and used as fertilizer, the Department maintained its stance based on the representation of the product as a catalyst. The first appellate authority set aside the Department's order for further inquiry. The Tribunal ruled in favor of the assessee, considering the market perception of the product's use. However, the High Court disagreed with the Tribunal's decision, emphasizing the product's packaging representation and directed the assessing officer to investigate if the product could increase soil fertility. Consequently, the High Court allowed the revisions, upheld the first appellate authority's order, and instructed further inquiry into the product's soil fertility impact.