2012 (11) TMI 1062 - HC - VAT and Sales Tax

Whether, raab gur is to be exempted from payment of tax under the Assam General Sales Tax Act? - gur v/s cattle feed Held that - There is no indication in the Assam General Sales Tax Act, 1993 that only a particular kind of merchandise will be treated as cattle feed for the purpose of entry 50. It may be relevant to mention here that the Revenue authorities themselves had once treated raab gur as a cattle feed for the purpose of taxation when the said item cattle feed was not included as an exempted item earlier. Therefore, we are of the view that raab gur being a cattle feed would be liable to be exempted from tax under entry 50 of Schedule I of the Assam General Sales Tax Act, 1993. As a result these writ petitions are allowed. The respondent-authorities are restrained from levying tax on the petitioner in respect of the item raab gur which is a cattle feed , which is covered by entry 50 of Schedule I of the Assam General Sales Tax Act, 1993 and respondentsauthorities are directed to act vis-a-vis the petitioner accordingly.

Summary

Issues Involved:
1. Whether "raab gur" is to be exempted from payment of tax under the Assam General Sales Tax Act, 1993 by treating it as "gur" which is exempted under entry 17 of Schedule I.
2. Whether "raab gur" can be treated as "cattle feed" which is exempted under entry 50 of Schedule I.

Detailed Analysis:

Issue 1: Exemption of "raab gur" as "gur" under entry 17 of Schedule I

The petitioner argued that "raab gur" should be considered as "gur" and thus be exempt from tax under entry 17 of Schedule I of the Assam General Sales Tax Act, 1993. The petitioner supported this claim by referring to the definitions provided in various orders such as the Gur Control Order, 1994, the Gur Movement Control Order, 1963, and the Gur (Regulation of Use) Order, 1968, which include "raab" as a form of "gur."

However, the court noted that definitions from different statutes cannot be imported unless the statutes are pari materia. The court emphasized that the legislative intent in different statutes may vary, and the context of the Assam General Sales Tax Act, 1993, is specifically about tax exemptions. The court observed that the definitions cited by the petitioner relate to the control and regulation of "gur" and are not directly applicable to tax exemption under the Assam General Sales Tax Act, 1993.

The court further noted that entry 17 of Schedule I specifically mentions "gur and molasses" as exempt items, indicating that not all forms of "gur" are exempted. The court concluded that "raab gur," while a form of "gur," is distinct and not specifically included in the Schedule I or any other Schedule for exemption. Therefore, "raab gur" cannot be exempted from tax under entry 17 of Schedule I.

Issue 2: Exemption of "raab gur" as "cattle feed" under entry 50 of Schedule I

The petitioner also contended that "raab gur" should be exempted as "cattle feed" under entry 50 of Schedule I. The petitioner argued that "raab gur" is not fit for human consumption and is primarily used as cattle feed. The Revenue did not dispute that "raab gur" is used as cattle feed but argued that it has other uses as well and that the ultimate use of an item cannot be the sole criterion for classification.

The court disagreed with the Revenue's stance, noting that the primary known use of "raab gur" as cattle feed was not contested. The court referred to the principle of "end user" as an important criterion for classification under excise laws, as seen in the Supreme Court case of Commissioner of Central Excise v. Sharma Chemical Works. The court applied this principle to the present case, concluding that "raab gur" can be treated as cattle feed based on its end use.

The court also noted that the Revenue had previously treated "raab gur" as cattle feed for taxation purposes when cattle feed was not an exempted item. Therefore, the court held that "raab gur" being a cattle feed is exempt from tax under entry 50 of Schedule I of the Assam General Sales Tax Act, 1993.

Conclusion:

The writ petitions were allowed. The court restrained the respondent-authorities from levying tax on "raab gur" and directed them to treat it as a cattle feed exempt from tax under entry 50 of Schedule I of the Assam General Sales Tax Act, 1993.