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2013 (4) TMI 198 - HC - VAT and Sales TaxClassification - fishing ropes made up of HDPE/PP - the dispute in question is whether any tax is payable in so far as the commodity dealt with by the petitioner. - Held that - the dispute being one covered under Section 94(1) (d) of the KVAT Act and it is up to the petitioner to make an application to the authority and if such an application is made, it is up to the authority to issue appropriate clarification in the manner as laid down in the Act. It will be open to the petitioner to make such an application and if such application is made within 10 days from today, the authority under Section 94 of the KVAT Act will consider the same in accordance with law and issue appropriate clarifications.
Issues:
1. Whether the petitioner is entitled to exemption from sales tax on fishing ropes made of HDPE/PP. 2. Whether the department should forward samples for analysis and obtain details from the Central Excise authorities. 3. Whether the petitioner is entitled to adduce evidence to support his case in compliance with principles of natural justice. 4. Whether burden of proof lies on the petitioner as per Sections 9 and 25 of the KVAT Act. 5. Whether the dispute regarding tax liability falls under the purview of Section 94(1)(d) of the KVAT Act. Analysis: Issue 1: The petitioner, a registered dealer under the KVAT Act, claimed exemption from sales tax on fishing ropes made of HDPE/PP, asserting they are non-taxable. The department issued pre-assessment notices contending otherwise. The petitioner sought clarification that the item falls under HSN Code No.5607.49.00, not 5607.90.90 as claimed by the department, and requested samples be tested by the Central Institute for Fisheries Technology. Issue 2: The petitioner filed a writ petition to compel the department to forward samples for analysis and obtain details from the Central Excise authorities. The court noted that the dispute falls under Section 94(1)(d) of the KVAT Act, which provides for the constitution of an authority to issue clarifications on tax liabilities. The court directed the petitioner to make an application under Section 94 within 10 days for the authority to consider and issue appropriate clarifications. Issue 3: The petitioner argued for the right to adduce evidence in support of his case, emphasizing the need for an analysis report and details from the Central Excise department to disprove the department's claim that the commodity is not a fishing rope. The court acknowledged the petitioner's right to present evidence in compliance with principles of natural justice. Issue 4: The respondents contended that the burden of proof lies on the petitioner as per Sections 9 and 25 of the KVAT Act. They argued that since the petitioner claims the commodity is a fishing rope, it is their responsibility to substantiate it with evidence. Issue 5: The court held that the dispute regarding tax liability falls under Section 94(1)(d) of the KVAT Act, making it the petitioner's responsibility to seek clarification from the authority constituted under Section 94. The court directed the assessment proceedings to be kept in abeyance for two months pending the clarification process. In conclusion, the court disposed of the writ petition by directing the petitioner to apply under Section 94 of the KVAT Act for clarification on the tax liability issue, emphasizing the need for adherence to the statutory provisions for resolving disputes related to tax payments.
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