2017 (7) TMI 1106 - HC - VAT and Sales Tax

Classification of goods - insecticides and pesticides commercially know as Dhanuvit - whether the product is classified and covered under entry no. 48 of Government notification dated 23 November 1998 which reads as follows washing soaps and other materials used for washing purposes ? - Held that - the sample of the product was produced before the appellate authority for the first time. Revenue was not given an opportunity to rebut the objections raised by the revisionist. The tribunal at the best should have remanded the matter or instead, thereof, the matter should have been decided after giving opportunity to the Revenue - revision allowed by way of remand.

Summary

Issues: Classification of a product under entry 48 of a government notification for tax assessment.

The judgment involves a revision arising for the assessment year 2000-01 against an order enhancing tax on a product named "Dhanuvit" manufactured by a company registered under the Companies Act, 1956. The assessing authority initially classified the product as an unclassified item and taxed it at 10%. The revisionist challenged this classification, citing entry no. 48 of a government notification dated 23 November 1998, which covers "washing soaps and other materials used for washing purposes." The revisionist argued that the product, primarily composed of Alkyl Benzene Sulphate, is used for washing surfaces before pesticide application, hence falling under the mentioned entry for tax purposes. The Tribunal, however, upheld the initial classification as unclassified, leading to the revisionist's appeal.

During the proceedings, the revisionist contended that the assessing authority erred in unclassifying the product despite its composition and purpose falling under entry 48 of the notification. The revenue's counsel argued that they were not given a fair chance to address the objections raised by the revisionist, suggesting that the matter should have been remanded for further consideration. Ultimately, on consent of both parties, the Court remanded the case to the Tribunal for a fresh decision, setting aside the previous order. The Tribunal was directed to reevaluate the classification of the product under entry 48 after providing an opportunity for the Revenue to present their case, with the revisionist agreeing to provide a sample of the product for examination. As a result of this remand, the revision was allowed, pending the Tribunal's fresh determination.