2011 (8) TMI 1050 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of goods under entry 29 of the Notification dated February 17, 2000 for tax purposes.
2. Interpretation of "waste product" under the law.
3. Application of the law laid down in the case of J & J Enterprises regarding waste products sold to manufacturers.

Detailed Analysis:
1. The primary issue in this case revolves around the classification of goods for tax purposes under entry 29 of the Notification dated February 17, 2000. The appellant, a dealer, sold fibre glass sheet cuttings to manufacturers of various products. The appellant contended that the goods fell under entry 29 and should be taxed at 5%, while the Department argued that the goods were unclassified and not waste products, justifying a tax rate of 10%.

2. The court examined the definition of "waste product" as per entry 29 and referred to the case of J & J Enterprises, which distinguished between "waste product" and "waste material." The court highlighted that waste products are those that become waste during the manufacturing process for the manufacturer. It was emphasized that waste products retain their original character even when sold to another manufacturer, as clarified in the case of J & J Enterprises.

3. Applying the legal principles established in the case of J & J Enterprises, the court concluded that the sale of fibre sheet glass cuttings by the appellant to manufacturers of various items constituted a sale of waste products. Therefore, the goods did not lose their original character as waste products, and the Trade Tax Tribunal's decision to tax them at 10% was deemed unjustified. Consequently, the court quashed the Tribunal's order and allowed the trade tax revision in favor of the appellant.