9911796707
TMI Blog1996 (4) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... so remitted the said amount to the department. But the assessing authority has taken the view that "fenoklin" is a commodity falling under entry No. 42 of the First Schedule to the Kerala General Sales Tax Act, 1963 taxable at 8 per cent. This was confirmed by the Deputy Commissioner (Appeals), Agricultural Income-tax and Sales Tax, Ernakulam. On second appeal before the Kerala Sales Tax Appellate Tribunal, Additional Bench, Ernakulam, the Appellate Tribunal took the view that fenoklin cannot be treated as a chemical taxable at 8 per cent. But the Appellate Tribunal without going into the further question as to the rate of tax applicable to this commodity simply allowed the appeal. It is against this, the department has come up in revision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that the identity of an article is associated with its primary function. 4.. To put it differently, the test would be as to how a commodity is understood by the trade and the consumer and that it is by its functional character that the product is so identified. If the question before us is considered in the light of the test laid down by the Supreme Court, we will find that none of these authorities has approached the question keeping in mind the above principles. The assessing authority in the assessment order has stated that in common parlance or commercial parlance, "fenoklin" is known as a chemical used for cleaning such as sanifresh, odopin, etc. It further observed that the necessity to probe into the qualities and ingredien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as a chemical, such as sanifresh and odopin without considering the matter independently took the view that considering the nature of the produce and its use, a different view on this issue is not possible. In other words, he also affirmed the view that fenoklin is a chemical falling under entry No. 42 of the First Schedule to the Act attracting levy of tax at 8 per cent. The Sales Tax Appellate Tribunal, on the other hand, has taken the view that fenoklin is not an item coming under entry No. 42 of the KGST Act and is not taxable at the rate of 8 per cent as a "chemical". The reason for taking the above view is found in paragraph 4 of the appellate order as follows: "This is a disinfectant fluid used for domestic hygiene hospitals, nur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iples to be applied in deciding the question as to whether fenoklin is a commodity falling under any of the entries in the First Schedule to the KGST Act, 1963. All the authorities including the Tribunal had considered the question as to whether fenoklin is a chemical only. None of these authorities have considered the question as to whether fenoklin falls under any of the other entries in the Schedule, such as entry No. 2-all acids. Entry No. 139-pesticides, fungicides and plant protection chemicals, etc. It is also seen that though the authorities have stated that in common parlance, fenoklin is understood to be a chemical, they have not established by applying the test laid down by the Supreme Court as to how this commodity can be clas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc., mainly for destroying harmful micro-organisms or inhibit their growth and that it is applicable to only on increments objects. Though this literature was available on records, none of these authorities have made any effort to understand the nature of the commodity with reference to the same and to decide as to under which entry this commodity falls by applying the principles laid down by the Supreme Court. 8.. We think that the proper course to be adopted in this case is to quash and set aside all the orders on this point and to direct the assessing authority to consider the question regarding the rate of tax applicable to fenoklin in the light of the observations contained in this judgment and in accordance with law. 9.. We accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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