2008 (8) TMI 963 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the Trade Tax Tribunal overlooked relevant Notifications and material evidence.
2. Whether the Tribunal correctly classified the product based on its Brand Name.
3. Justification of remanding the matter back to the Assessing Authority.
4. Correctness of the Tribunal's findings.
5. Tribunal's oversight of the Deputy Commissioner's findings.
6. Legality of the Tribunal's decision to remand the matter considering the age of the case.
7. Overall sustainability of the Tribunal's order.

Summary:

Issue 1: Overlooking Relevant Notifications and Evidence
The applicant contended that the Trade Tax Tribunal overlooked relevant Notifications and various decisions and material evidence placed by the applicant-Company in deciding the issue involved in the present case.

Issue 2: Classification Based on Brand Name
The Tribunal recorded that the product manufactured and sold by the applicant-Company is Coconut Oil, which is covered under various notifications. However, it concluded that the goods manufactured are not covered under the head of the definition of "Oils of all kinds" based on the Brand Name used by the applicant Company.

Issue 3: Remanding the Matter
The Tribunal remanded the matter back to the Assessing Authority for fresh investigation. The applicant argued that this was unjustified, especially given the age of the case, which relates to Assessment Years 1981-82 to 1984-85.

Issue 4: Correctness of Tribunal's Findings
The Tribunal's findings were challenged on the grounds that they were not correct in the eyes of the law. The applicant argued that the coconut oil should be taxed as 'oil of all kinds' and not as 'cosmetics and toilet requisites'.

Issue 5: Oversight of Deputy Commissioner's Findings
The Tribunal was criticized for completely overlooking the findings recorded by the Deputy Commissioner, who had decided the matter in favor of the applicant-Company.

Issue 6: Legality of Remanding the Matter
Given that the matter is about 18 years old, the applicant argued that the Tribunal's decision to remand the matter to the Assessing Authority was not legally correct.

Issue 7: Overall Sustainability of Tribunal's Order
The applicant questioned the overall sustainability of the Tribunal's order, arguing that it was not correct in the eyes of the law.

Judgment Details:

Taxability of the Commodity:
The main argument was that the commodity in question is 'coconut oil' and should be taxed as 'oil of all kinds'. The applicant emphasized that coconut oil is an edible oil and should be taxed under Entry No. 31 of Notification No. 5785. The Tribunal, however, noted that the product was advertised and sold as hair oil, not edible oil, and thus should be classified under 'cosmetics and toilet requisites'.

Relevant Notifications:
Entry No. 31 in Notification No. 5785, dated 7th September 1981, covers "Oils of all kinds," while Entry No. 5 of Notification No. 5784, dated 7th September 1981, covers "All kinds of cosmetics and toilet preparations for beautification or care of the face, skin, hair, nails, eyes or brows."

Common Parlance Test:
The judgment emphasized the principle that while interpreting entries in Sales Tax Acts, the popular meaning attached to the commodity by those dealing in it should be adopted. The product in question, 'parachute coconut oil,' was represented as hair oil through advertisements and packaging, and thus should be taxed as 'cosmetics and toilet requisites'.

Previous Assessments:
The Tribunal's earlier judgment for Assessment Years 1979-80 and 1980-81 treated the product as edible oil. However, the current case involved a different question regarding the product's classification as hair oil, which was not addressed in the earlier assessments.

Remand Decision:
The Tribunal's decision to remand the matter to the Assessing Authority was deemed unnecessary. The product was consistently represented as hair oil, and the matter was already significantly old. Thus, the remand order was set aside.

Final Decision:
The Tribunal was justified in holding that Parachute coconut oil is liable to be taxed as 'hair oil' and not under the category of 'oils of all kinds'. However, the remand to the Assessing Authority was not justified. The revisions were allowed in part, setting aside the remand order, but dismissed in all other respects.

Costs:
No order as to costs.