9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 250 - HC - VAT and Sales TaxDenial of exemption claim - Classification of goods - Rate of levy of duty @4% or 10% - Classification of marker ble Apex Court 2008 (9) TMI 1 - SUPREME COURT as also definition of marker and highlighter as given above in my view marker as well as highlighter will literally fall in the category of all types of pens and accordingly in my view the Tax Board has rightly considered the said issue in favour of the assessee and against the revenue and I accordingly hold the same Claim of the assessee is well justified as in the notification dt.26/03/1999 the category is All kinds of paper stationery greeting/wedding and other printed cards and therefore in my humble view all three items will fall within the category of stationery. The sales tax enactment is one which touches the common man and his everyday life. Therefore the terms in the said enactment must be in the manner in which the common man will understand them. In other words the test is as to what a common man viewing or dealing with the article will understand it to be. In doing so the particular use to which a particular customer may put in should be eschewed from consideration. Thus in common parlance (i) carbon paper (ii) stamp pad (i) marker ble Apex Court in the case of HPL Chemical Ltd. (2006 (4) TMI 1 - SUPREME COURT OF INDIA) has held that classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify the goods under a particular heading or sub-heading different from that claimed by the assessee the Department has to adduce proper evidence and discharge the burden of proof. I notice that in the present case except that the Revenue claims that it falls in residuary/general clause nothing has been brought on record so as to come to the conclusion that these items are not items of stationery burden was on the Revenue. - Decided against Revenue.
Issues Involved:
1. Classification of marker & highlighter as pens. 2. Classification of carbon paper as stationery. 3. Classification of stamp pad & ink of stamp pad as stationery. 4. Classification of covert (eraser) as stationery. Detailed Analysis: 1. Classification of Marker & Highlighter as Pens: The primary issue was whether markers and highlighters fall under the category of "pens" as per the notification dated 07/03/1994. The Assessing Officer (AO) argued that markers and highlighters are not pens and should be taxed at a general rate of 10%. The Deputy Commissioner (Appeals) (DC(A)) and the Tax Board concluded that markers and highlighters fall within the definition of pens, referencing the expanded definition in the notification which included "all types of pens including parts and accessories thereof, drawing materials and poster colours." The High Court upheld this view, citing the Hon'ble Apex Court's decision in Camlin Limited v. CCE, which recognized markers and highlighters as instruments of writing. The court referred to dictionary definitions to support this interpretation, concluding that markers and highlighters are indeed types of pens and should be taxed accordingly. 2. Classification of Carbon Paper as Stationery: The AO contended that carbon paper should not be classified as stationery and should be taxed at a higher rate of 10%. The DC(A) and the Tax Board classified carbon paper as stationery, subject to a lower tax rate. The High Court supported this classification, referencing the MP High Court's decision in Modern Agency, which emphasized a pragmatic view of the term "stationery" to include items commonly used in offices and by students. The court distinguished the Hon'ble Apex Court's decision in Kores (India) Ltd., which addressed whether carbon paper is "paper" rather than "stationery." The court concluded that carbon paper falls within the common parlance understanding of stationery. 3. Classification of Stamp Pad & Ink of Stamp Pad as Stationery: The AO argued that stamp pads and their ink should be taxed at a general rate of 10%. The DC(A) and the Tax Board classified these items as stationery, subject to a lower tax rate. The High Court upheld this classification, referencing the MP High Court's decision in Modern Agency and emphasizing the common parlance understanding of stationery. The court noted that these items are typically found in stationery shops and used in offices, supporting their classification as stationery. 4. Classification of Covert (Eraser) as Stationery: The AO contended that erasers should be taxed at a general rate of 10%. The DC(A) and the Tax Board classified erasers as stationery, subject to a lower tax rate. The High Court supported this classification, emphasizing the common parlance understanding of stationery and referencing the MP High Court's decision in Modern Agency. The court noted that erasers are commonly used by students and professionals and are typically found in stationery shops. Conclusion: The High Court dismissed both revision petitions by the revenue, upholding the Tax Board's decision. The court concluded that markers and highlighters fall within the category of "all types of pens," and carbon paper, stamp pads & their ink, and erasers fall within the category of "stationery." The court emphasized the importance of common parlance understanding and the burden of proof on the revenue to classify items under a different heading. The question of law was answered in favor of the assessee and against the revenue.
|
