2009 (3) TMI 989 - HC - VAT and Sales Tax

Summary

Issues involved:
The main issue in this case is whether plastic granules fall under Entry 35 B of the notification issued under section 15 of the HGST Act, 1973.

Issue 1: Interpretation of Entry 35-B of the notification

The High Court considered whether the HDPE and LDPE granules manufactured and sold by the respondent are plastic goods falling under Entry 35-B of the notification. The Court analyzed the clarification issued by the ETC, Haryana, Chandigarh in 1993, stating that HDPE and LDPE are plastic materials. The revenue argued that this clarification was issued before Entry 35-B was enacted and thus not applicable. However, the Court disagreed, emphasizing that HDPE and LDPE granules are finished products made of plastic, aligning with the entry's scope covering all plastic goods except HDPE woven bags. The Court concluded that the granules indeed qualify as plastic goods under Entry 35-B.

Issue 2: Reliance on clarification dated 20.1.1993

Another aspect examined was whether the Tribunal was correct in law in relying on the clarification dated 20.1.1993, Annexure P-4 to entry 35-B of the notification. The Court noted the revenue's contention regarding the timing of the clarification vis-a-vis the enactment of Entry 35-B. However, the Court upheld the relevance of the clarification, emphasizing that HDPE and LDPE granules being finished products made of plastic inherently fall under the purview of the entry. Consequently, the Court ruled in favor of the assessee, rejecting the revenue's argument against the classification of the granules as plastic goods under Entry 35-B.

In conclusion, the High Court's judgment addressed the interpretation of Entry 35-B of the notification under the HGST Act, 1973, affirming that HDPE and LDPE granules are considered plastic goods under this entry. The Court's analysis of the relevant clarification and the nature of the products led to a decision favoring the assessee and dismissing the revenue's contentions.