2016 (11) TMI 1262 - HC - VAT and Sales Tax

Levy of tax - Eraser Scale and Glass Marking Pencils - stationary items - Held that - the controversy relating to the similar items being sold by the respondent-assessee came up for consideration before this Court in the case of Assistant Commissioner Anti Evasion Rajasthan-I Jaipur Vs. M/s Camlin Limited & anr. 2015 (4) TMI 250 - RAJASTHAN HIGH COURT where it was held that these are essentially stationary items and would fall in the exempt category. Petition dismissed - decided against Revenue.

Summary

Issues:
1. Interpretation of tax exemption notifications for stationary items.
2. Determination of whether certain items fall under the category of stationery for tax purposes.

Analysis:
The High Court judgment pertains to petitions filed by the Revenue against an order passed by the Rajasthan Tax Board in favor of the assessee for Assessment Years 2002-03 to 2005-06. The core issue revolved around the taxability of Eraser, Scale, and Glass Marking Pencils sold by the assessee, claiming exemption under state government notifications for stationary items. The Assessing Officer disagreed, levying tax, interest, and penalty. The Deputy Commissioner (Appeals) upheld this decision, leading to an appeal before the Tax Board, which ruled in favor of the assessee, citing exemption under a specific notification from 2005.

The Court noted a previous judgment involving similar items, where it was held that such products are essentially stationary items and qualify for exemption. The Revenue's counsel failed to distinguish this precedent. The Court referenced the earlier judgment's observations, emphasizing the common understanding of terms like "stationery" and the everyday use of the items in question. The judgment highlighted that items like marker, eraser, stamp pad, etc., are commonly found in stationery shops and are considered stationery items in commercial understanding. Therefore, the Court concluded that the issue in the present petitions aligns with the previous judgment, leading to the dismissal of the Revenue's petitions based on the precedent's application.

In conclusion, the Court's decision was based on the interpretation of tax laws and notifications regarding the classification of items as stationery for tax exemption purposes. The judgment emphasized the common understanding and commercial usage of the products in question to determine their categorization as stationery items. By aligning with a previous ruling on similar matters, the Court dismissed the Revenue's petitions, affirming the assessee's entitlement to exemption for the specified items.