2014 (9) TMI 913 - HC - VAT and Sales Tax

Classification of goods - Rate of tax - Scented Supari or Meethi Supari - Joint Commissioner, based upon the report of the Mobile Squad, a finding of fact has been recorded that on the pouches the contents were mentioned as Pooja Sugnadhit Supari and ingredients was mentioned as Betel Nut, Cardamom, Clove, contains added flavor . The Tribunal held that if it was Meethi Supari then it ought to have an element of Sugar or some sweetener and the same would have been mentioned on the pouch as a sweet ingredient but in the absence of any such mention of any sugar or sweetener and the fact that the on the pouch itself it was described as Pooja Scented Supari, the consignment was held to be Scented Supari which being an unclassified item was liable to tax at 14%. This being a finding of fact based upon the nature of the ingredients and its contents mentioned on the consignment itself, I do not find any error in the finding of fact recorded by the Tribunal. Value of consignment - Held that - it was the stand of the revisionist that the goods were valued at ₹ 1,17,000/- and even in the memo of appeal he has taken a plea in ground no.5 that the value of the consignment was 1,17,000/-. The Joint Commissioner, Assessing Authority as well as the Tribunal have all noted this fact and yet come to the conclusion that the value of the consignment was ₹ 2,70,000 and on this value a demand of security of ₹ 1,08,000/- has been made. It has not been discussed any where either by the Assistant Commissioner, the Joint Commissioner or by the Tribunal as to how it has come to this conclusion so far as the value of the goods is concerned, whether the invoice were examined and disbelieved or whether that was not examined at all by the authorities below - findings of the Tribunal as well as the Joint Commissioner and the Assistant Commissioner cannot survive and deserve to be quashed. - Decided partly in favour of assessee.

Summary

Issues:
1. What was the value of the consignment?
2. What was the nature of consignment, whether it was Meethi Supari or whether it was Scented Supari?

Analysis:
Issue 1: The revisionist claimed the consignment's value was Rs. 1,17,000, while authorities assessed it at Rs. 2,70,000, demanding a security of Rs. 1,08,000. However, the basis for this assessment was not explained by any authority. The court found no justification for the higher valuation and set aside the findings, remitting the matter for reassessment by the Assessing Authority.

Issue 2: Regarding the nature of the consignment, the Tribunal relied on the description on the pouches which mentioned "Pooja Sugandhit Supari" with ingredients like betel nut and cardamom. As there was no mention of sugar or sweetener, and the consignment was labeled as Scented Supari, it was classified as an unclassified item liable to 14% tax. The court upheld this finding, considering it a factual conclusion based on the evidence provided.

In conclusion, the court partially allowed both revisions, quashing the orders related to the valuation of the consignment and remanding the matter for reassessment. The classification of the consignment as Scented Supari for tax purposes was upheld based on the evidence presented on the pouches.