9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 550 - HC - VAT and Sales TaxClassification of goods - Multi Function Printers - sale during the period January to March, 2007 - whether liable to tax at 12.5% and not at 4% in spite of amendment by way of substitution of Sl.Nos.28 and 29 in Notification No.FD 116 CLS 2006 (9), Bangalore, dated 31.03.2006 with Sl.Nos.28, 29 and 30 with effect from 1- 1-2007 by Notification No.FD 238 CSL 07, dated 7-7-2007? - falling under Central Excise Tariff Entry 8443.31.00 or under Entry No.8443.32 of Central Exercise Tariff Act? - interpretation of the notifications. HELD THAT - It is well settled that the substitution in the notifications has two steps. First, the old provision is made seized to exist and next, the new provision is brought into existence in its place. Both these steps are taken simultaneously thereby replacing old provision with the new provision. The notification dated 07.07.2007 would certainly indicate that the substitution has been made to Sl.Nos. 28 and 29 and entries relating thereto, existing in the notification dated 31.03.2006. Thus, it could not be said gainsaid that this notification has to be given prospective effect. However, it is observed that the notification dated 31.03.2006 was amended by notification dated 04.04.2007 by giving effect to the entries at Sl.Nos.28 and 29 with effect from 01.01.2007, this notification dated 07.07.2007 with respect to item Nos. 28 and 29 came into effect from the 01.01.2007. These aspects though have been analysed by the Tribunal and benefit has been denied under this notification dated 07.07.2007, on different ground altogether, which was not the subject matter of the appeal. Hence, there are no hesitation to hold that the Tribunal has exceeded its jurisdiction in adjudicating upon other issues which were not considered by either the Assessing Authority or Appellate Authority for denying the benefit of notification dated 07.07.2007 or in other words, to levy taxes under the residual entry on these MFPs for the periods in question. The questions of law is answered in favour of the assessee and against the revenue - petition allowed.
Issues Involved:
1. Tax Rate Applicability on Multi-Function Printers (MFPs). 2. Classification of MFPs under Central Excise Tariff. 3. Retrospective Application of Notification Amendments. Detailed Analysis: 1. Tax Rate Applicability on Multi-Function Printers (MFPs): The primary issue is whether MFPs sold by the petitioner during January to March 2007 should be taxed at 12.5% or 4%. The Tribunal upheld the 12.5% tax rate, classifying MFPs as unscheduled goods under Section 4(1)(b) of the KVAT Act, due to the absence of specific entries in the relevant notifications during the period in question. The petitioner contended that the relevant notifications were amended to include MFPs under a lower tax bracket of 4%. 2. Classification of MFPs under Central Excise Tariff: The petitioner argued that MFPs fall under Central Excise Tariff Entry 8443.31.00, which should be taxed at 4%. The Tribunal dismissed this, stating that the petitioner failed to prove the classification under Entry 8443.31.00. The petitioner further argued that the Tribunal should have considered MFPs under Entry 8443.32, which was covered by the notification dated 31.03.2006, as amended. 3. Retrospective Application of Notification Amendments: The notifications dated 31.03.2006 and 07.07.2007 were central to the dispute. The Tribunal held that the notification dated 07.07.2007 could not be applied retrospectively as it was not issued under Section 30 of the KVAT Act. The petitioner argued that the notification should be given retrospective effect from 01.01.2007, as it was a substitution of the earlier notification, which should be interpreted as replacing the old provisions with new ones. Judgment Summary: 1. Tax Rate Applicability on MFPs: The Court found that the Tribunal erred in holding that MFPs should be taxed at 12.5%. The relevant notifications, when interpreted correctly, indicated that MFPs should be taxed at 4% under Entry 53 of the Third Schedule of the KVAT Act. The Court directed the Assessing Authority to re-compute the tax at 4% for the periods in question. 2. Classification of MFPs under Central Excise Tariff: The Court observed that the Tribunal exceeded its jurisdiction by delving into the classification issue, which was not contested before the lower authorities. The Court held that MFPs should be classified under Entries 8443.31 and 8443.32, as per the amended notifications, and thus eligible for the lower tax rate. 3. Retrospective Application of Notification Amendments: The Court held that the notification dated 07.07.2007, which substituted entries in the notification dated 31.03.2006, should be given retrospective effect from 01.01.2007. The Court cited various judgments, including the Supreme Court's decision in Government of India vs. Indian Tobacco Association, to support the interpretation that substitution implies retrospective application unless explicitly stated otherwise. Conclusion: The Court allowed the revision petition, setting aside the orders of the lower authorities and the Tribunal. It directed the Assessing Authority to re-compute the tax on MFPs at 4% for the tax periods January, February, and March 2007, thereby granting the petitioner the benefit of the amended notifications. The judgment emphasizes the importance of correct interpretation of statutory notifications and the principle that substitution in legislative terms generally implies retrospective application unless clearly specified otherwise.
|
