2019 (6) TMI 1202 - HC - VAT and Sales Tax

Classification of imported goods - Multifunction Printers having the additional functions of Photo copying, Scanning, Fax etc. - HELD THAT - The classification of MFDs is settled for good. There is no disputation before this Court that the aforesaid clarification / order of the Advance Ruling Authority dated 02.09.2014 is now governing the field. If that be the case, in the absence of any disputation that the relevant list i.e., the list of Information Technology products as notified by the Government vide Notification No.II(1) / CTR / (a-6) / 2007 in G.O.Ms.No.3, CT R(B1) Department dated 1st January 2007, does not make any distinction between old / used and new products as far as MFDs are concerned, it follows as an inevitable and indisputable sequitur that the impugned order deserves to be set aside and therefore, the impugned order is set aside insofar as it is misread the clarification, Ruling of the Advance Ruling Authority dated 02.09.2014. The respondent is directed to redo the assessment obviously in the light of the clarification / order of the Advance Ruling Authority dated 02.09.2014 bearing in mind that there is no distinction between old / used products and new products as far as MFDs, which find place in Entry namely Serial No.68 in Part-B of First Schedule read with Item 22(a) in the List of Information Technology Products are concerned - Petition disposed off.

Summary

Issues:
Challenge to Assessment Order under CST Act - Misreading of Advance Ruling Authority's Order - Distinction between old and new MFDs - Compliance with Court's Directions

Analysis:
The writ petition challenged an Assessment Order dated 30.11.2018 under the CST Act. The petitioner, a dealer in Information Technology Products, imported Multifunction Printers (MFDs) and sold them locally and inter-state. The dispute arose regarding the tax rate applicable to MFDs. The previous litigation resulted in an order directing assessment based on an Advance Ruling Authority's decision dated 02.09.2014, which clarified a 5% tax rate for MFDs. The petitioner contended that the impugned order misinterpreted the distinction between old and new MFDs, which was not recognized in the relevant list of Information Technology products. The Court acknowledged the settled classification of MFDs based on the Advance Ruling Authority's order.

The Court held that since there was no distinction between old and new MFDs in the relevant list, the impugned order misread the Advance Ruling Authority's clarification. Consequently, the Court set aside the impugned order and directed the respondent to redo the assessment in line with the 02.09.2014 ruling, emphasizing the absence of differentiation between old and new MFDs. The Court mandated the reassessment to be completed within three months, ensuring compliance with legal procedures.

In conclusion, the writ petition was disposed of without costs, and the connected miscellaneous petition was closed. The judgment clarified the correct tax treatment of MFDs based on the Advance Ruling Authority's decision, highlighting the importance of adhering to legal interpretations in tax assessments.