2016 (4) TMI 1186 - HC - VAT and Sales Tax

Entry No.71 - whether the material which is being purchased and sold by the appellant is rightly excluded from entry No.71? - examination of matter by Advance Ruling Authority - Held that - when we are not satisfied even after examining in detail that the Entry No.71 can be applied to the products or the items which are being dealt with by the appellant, no useful purpose would be served by examining the matter on the ground that there is no detailed discussion or examination by the Advance Ruling Authority - appeal dismissed - decided against appellant.

Summary

Issues: Interpretation of Entry No.71 of Third Schedule of Karnataka Value Added Tax, 2003 for printed materials.

In this judgment, the High Court of Karnataka addressed the issue of interpreting Entry No.71 of the Third Schedule of the Karnataka Value Added Tax Act, 2003, concerning the tax rate applicable to printed materials. The appellant, engaged in printing hoardings and banners, contested the exclusion of their materials from Entry No.71, which would have subjected them to a lower tax rate. The appellant argued that their products should fall under Entry No.71, attracting a tax rate of 5.5%. However, the Advance Ruling Authority prescribed a separate rate, leading to the appeal before the High Court.

The Court analyzed the language of Entry No.71, which includes printed materials other than books for specific stationary articles. The Court emphasized that the printed material must be on stationery paper to fall under this entry. The judges further interpreted the term "printed material" in conjunction with other listed items to determine the scope of inclusion. They highlighted that the specified items, such as account books and envelopes, are distinct from posters and banners used for public information dissemination. The Court emphasized the difference in use and material between items listed in Entry No.71 and the appellant's products like posters and banners.

The Court rejected the appellant's argument that all printing materials should be included in Entry No.71, as it would render other entries redundant. The judges emphasized that commercial understanding and statutory interpretation do not support the inclusion of items like banners and hoardings under Entry No.71. The Court also dismissed the appellant's contention that the Advance Ruling Authority did not provide a detailed examination, stating that such examination would not alter the conclusion regarding the applicability of Entry No.71 to the appellant's products.

Moreover, the Court addressed the appellant's reliance on previous court decisions, stating that those cases were not applicable to the present scenario. The judges found no grounds for interference, deeming the appeal meritless and dismissing it. The judgment underscores the importance of interpreting tax statutes meticulously and considering the specific language and intent behind statutory provisions to determine the appropriate tax treatment for different types of goods and services.