9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 351 - HC - VAT and Sales TaxRate of tax - Classification of goods - plastic trays, containers, box and bowls - whether fall under Entry 174 of List A of Third schedule bearing HSN Code 3923 and are taxable at the rate of 5% - Held that - The containers, trays and bowls made of plastic cannot be said to be either a tin, bag or cover. The plastic containers, trays and bowls having not been included in any of the entries and the specific eight digit HSN Code 3923.90.90 under the Customs Tariff Act also having not been included under Entry 174, it cannot be said that the containers, trays and bowls which fall under the Tariff Entry 3923 as against eight digit HSN Code 3923.90.90 is also included under Entry 174 of List A of Third Schedule under the KVAT Act. The main heading under Entry 174 is not aligned to the four digit HSN Code and the eight digit HSN Code under 3923.90.90 is not aligned against any of the sub-entries under Entry 174. The Commissioner has correctly found that the said goods do not come under either Sl.No.3 or 3A - We have extracted those goods which come under Sl.No.3 or 3A herein above, which do not include either of the goods now arising for our consideration in the appeal; being containers, trays and bowls. The said commodities do not also fall under Entry 174 packing materials and hence necessarily the same has to be taxed under the residuary entry of SRO 82/2006. The impugned order in the above case being a continuation of the proceedings under Section 94, there can be no prospectivity declared for the same. Appeal dismissed - decided against Appellant.
Issues Involved:
1. Jurisdiction of the Commissioner under the Kerala Value Added Tax Act (KVAT Act) post-repeal. 2. Validity of the suo motu revision powers exercised by the Commissioner. 3. Applicability of the tax rate on plastic containers, trays, and bowls under the KVAT Act. 4. Prospective application of the impugned order. Detailed Analysis: 1. Jurisdiction of the Commissioner under the KVAT Act Post-Repeal: The appellant contested the jurisdiction of the Commissioner of State Taxes under the Kerala Goods and Services Tax Act (KGST Act) to issue the notice and pass the order. The court clarified that the Commissioner of State Taxes, who was also the Commissioner of Commercial Taxes under the KVAT Act, retained the authority to invoke powers under Section 94(7) of the KVAT Act. Despite the repeal of the KVAT Act by Section 174 of the KGST Act, the previous operations, rights, privileges, obligations, or liabilities under the repealed Act were preserved. Therefore, the invocation of suo motu powers under Section 94(7) was valid even after the repeal. 2. Validity of the Suo Motu Revision Powers Exercised by the Commissioner: The appellant argued that the Commissioner should not have invoked suo motu powers based on the Local Audit Report (LAR) by the Accountant General. The court held that the Commissioner was not influenced by the LAR but independently considered the issue. It was within the Commissioner's rights to notice irregularities pointed out in the LAR and invoke suo motu powers under Section 94(7). The court emphasized that the suo motu powers could be invoked upon noticing any irregularity, whether brought to the Commissioner's attention by an audit party or any concerned person. 3. Applicability of the Tax Rate on Plastic Containers, Trays, and Bowls: The appellant contended that their products should be taxed at the concessional rate of 5% under Entry 174 of the Third Schedule-List A of the KVAT Act, which covers packing materials. The court examined the amendments and specific exclusions under the KVAT Act and found that the items in question (plastic containers, trays, and bowls) were not included under Entry 174. The court noted that the eight-digit HSN Code 3923.90.90, which covers these items, was not aligned with any sub-entries under Entry 174. Consequently, the court held that these items should be taxed under the residuary entry of SRO 82/2006, not at the concessional rate. 4. Prospective Application of the Impugned Order: The appellant argued that the impugned order should have only prospective application, citing the precedent in Sreedhareeyam Ayurvedic Medicines (P) Ltd. & Ors. v. State of Kerala & Ors. The court distinguished the present case from the cited precedent, noting that the impugned order was a continuation of proceedings under Section 94(2) of the KVAT Act. Therefore, the court found no basis to declare the order as having only prospective effect. Conclusion: The High Court dismissed the appeal, upholding the jurisdiction of the Commissioner and the validity of the suo motu revision powers exercised. The court confirmed that the plastic containers, trays, and bowls should be taxed under the residuary entry of SRO 82/2006 and not at the concessional rate of 5%. The court also ruled out the prospective application of the impugned order.
|
