2024 (2) TMI 7 - HC - VAT and Sales Tax

Classification of goods - granite stone block and pieces sold by the dealer - taxable under entry no.109 of the Schedule II Part A as per notification No.KANI-2-421/XI-9(1) dated 31.03.2011 or not - HELD THAT - On an interpretation of the intention of the Legislature, the glazed stone, marble and marble chips have been specifically excluded from the definition of stone in Entry No.109. If the Legislature wanted to exclude granite stone, the same could have very well been done by the amendment carried out on March 31, 2011. If one were to agree with the submission made by the revenue, one would have to exclude several items that would ordinarily be termed as stone , which is not permissible in law. Upon perusal of the order passed by the Tribunal, one finds that the Tribunal has held that stones that have not been processed in any manner, would be included in Entry No.109 whereas processed stones that have gone through some kind of procedure would be excluded. The above finding is in consonance with the fact that glazed stone has been specifically excluded from Entry No.109. There is no scope of interference in the well reasoned order passed by the Tribunal, and accordingly, this revision petition is dismissed.

Summary

Issues involved: Classification of granite stone for tax purposes under Entry No.109 of Schedule II Part A

Classification of granite stone under Entry No.109:
The revision petition was admitted to determine whether the Tribunal was justified in taxing granite stone block and pieces at 5% under Entry No.109 of the Schedule II Part A, despite granite stone not being explicitly mentioned in the said notification. The revenue argued that since Entry No.109 does not include granite stone, it should be taxed at 14.5%.

Interpretation of Entry No.109:
The argument presented by Mr. Pandey was that Entry No.109 includes substances of lower value like sand, gitti, bajri, kankar, and stone, suggesting that expensive items like granite stone were not intended to be included. However, Entry No.109 explicitly includes "stone" while excluding glazed stone, marble, and marble chips.

Legislative intent and exclusion of granite stone:
The judge interpreted the legislative intent behind the exclusion of glazed stone, marble, and marble chips from the definition of "stone" in Entry No.109. It was noted that if the Legislature intended to exclude granite stone, it could have done so through an amendment. Excluding granite stone based on its value would lead to excluding other items considered as "stone," which is impermissible in law.

Tribunal's findings and reasoning:
The Tribunal held that unprocessed stones fall under Entry No.109, while processed stones that have undergone some form of treatment are excluded. This aligns with the exclusion of glazed stone from Entry No.109. The judge found no grounds to interfere with the Tribunal's well-reasoned decision and dismissed the revision petition accordingly.