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TMI Blog2014 (12) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, being of the view that the appellate order was erroneous and prejudicial to the interest of the Revenue. 3. In these appeals, we are concerned with only the rate of tax at which the subject goods, namely, "artificial flower petals" which was being bought and sold by the appellant-dealer was required to be taxed. 4. The bone of contention between the dealer and the Department is that while the dealer claimed that the particular goods which the dealer was trading in, is an item that is covered by entry 78 of the Third Schedule to the Act and reading as under: "78. Readymade garments, clothing accessories and other made up textile articles.- (1) Clothing accessories including socks, stockings, gloves, shawls, scarves, mufflers, mantillas, veils, ties, bow-ties, knitted or crocheted. (2) Clothing accessories, not knitted or crocheted, including hand-kerchiefs, shawls, scarves, mufflers, mantillas, veils, ties, bowties, cravats, gloves-headbands (3) Blankets and travelling rugs (4) Bed linen, table linen, toilet linen and kitchen linen and other made ups (5) Curtains (including drapes) and interior blinds; curtain and bed valances (6) Other furnishing articles." as it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 12. It is thereafter that the assessing authority had issued notice to the dealer under section 39(1) of the Act indicating that the commodity known as "artificial flower petals" does not fit into any of the entries in the Third Schedule and therefore it necessarily has to be taxed at the general rate of 12.5 per cent and not at four per cent as had been claimed by the dealer. 13. The assessee-dealer had responded affirming its claim that the subject artificial flower petals necessarily comes within entry 78 as it fits into description of other clothing accessories or other made up textile articles and had asserted that it has to be taxed only at four per cent. 14. The assessing authority have rejected this claim of the assessee-dealer and proceeded to adjudicate the show-cause notice opining that the subject goods known as artificial flower petals has to be taxed only as an item not covered under the Third Schedule, but is one which is taxable in general in terms of section 4(1)(b) of the Act. 15. The assessee being aggrieved by this order had preferred an appeal to the Joint Commissioner of Commercial Taxes (Appeals) and met with success. The assessee's claim that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith other garments opined that it does not fit into this description and rejected the claim of the assessee and set aside the view taken by the Joint Commissioner of Commercial Taxes (Appeals) and opined that the appellate order was erroneous and therefore revised the same and restored the assessment order. 18. It is in this background, the present appeals by the dealer. 19. We have heard extensive arguments of Sri Kamath, learned counsel for the appellant and Smt. S. Sujatha, learned Additional Government Advocate appearing for the respondent-Revenue. 20. Sri Kamath, learned counsel for the appellant, has raised a preliminary objection on the validity of the order on the premise that the authority who has passed the order on reopening lacked jurisdiction, particularly, on a reference made by the Joint Commissioner of Commercial Taxes (Appeals) who had authorized the visiting officials to the premises of the assessee and the person who had passed the reassessment order had not been authorized by the Commissioner to become a prescribed authority in terms of the provisions of the Act; that it was only the Commissioner who had the competence to nominate a prescribed authority and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entries in the Schedule or otherwise. 25. Sri Kamath has also submitted that artificial flower petals are basically from out of textile material and is only a piece of a textile material cut into pieces in the shape of a flower petal and therefore it has lost the character of textiles and has become a different product, but nevertheless, base is textile and a reading of entry 78 in the Third Schedule to the Act indicates that it only contains such of those items which are made out of textile material, particularly, readymade garments and other described items such as clothing accessories like handkerchiefs, shawls, scarves, mufflers, etc., in entry 78 and therefore submits that the description being not exhaustive but including other made up textile articles which is made from out of textile material artificial flower petals, traded by the assessee are covered within entry 78 and submits that view taken by the Commissioner is not correct to opine that the artificial flower petals do not fit into the entry. 26. Mr. Kamath also submits the fact that the artificial flower petals are also used for preparing badges and labels is also a circumstance to indicate that it is one whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore submits that there is absolutely no need to disturb the order passed by the revisional authority restoring the order of the assessing authority. 28. We have perused the orders of the Appellate Commissioner and the revisional authority. We have been taken through the relevant portions of the orders by the learned counsel for the parties. We have also looked into the records and perused a sample item of artificial flower petals available as part of the record of the case and have bestowed our consideration to the submissions made at the Bar. 29. Descriptive item No. 7 in entry 78, which is only woven labels, badges and the like, which leaves the scope for fitting into this item goods like artificial flower petals is by way of an amendment in terms of Act No. 4 of 2006 and which has come into effect only from April 1, 2006 and therefore we do not propose to examine the present appeals with reference to this item in entry 78. Arguments advanced are not per se examined by taking into consideration this item No. 7 in entry 78. 30. Assessee is a dealer who buys and sells this item as "assessee" is not one manufacturing this item or in any way using this for producing any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) in respect of any goods subject to such restrictions and conditions as may be specified in the notification. (4) Notwithstanding anything contained in sub-section (1), subject to such conditions as may be prescribed, a registered dealer, if he so elects, may pay tax on the sale of goods specified in Sl. No. 60 of the Third Schedule, on the maximum retail price indicated on the label of the container or pack thereof or on such maximum retail price reduced by an amount equal to the tax payable." 32. The assessee being a registered dealer, liability is on the assessee in respect of any taxable turnover and the rate at which a particular goods is taxed as given in section 4 of the Act. Section 5 of the Act indicates that the goods specified in the First Schedule and any other goods so notified through a notification issued by the State Government, is exempt from tax payable under the Act. 33. Charging sections 3 and 4 indicate that in respect of goods mentioned and figuring in Second, Third and Fourth Schedules levy is at different rates of tax as is stipulated and if any goods does not fit into any one of these three Schedules and is also a goods not figuring in First Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... textile articles. 37. A perusal of the items mentioned therein and the manner in which the very entry is mentioned indicates that the entry is of a general nature to include all readymade garments in general or clothing accessories or even made up textile articles and not exhaustive by the description. If the particular product which is having its origin in textiles or fabrics, but is marked in the shape of artificial flower petals is not so either shaped or marked, but sold as fabric and it remains as an exempted item. But, it has lost its characteristic of "cloth" and fabric or textile, because of being marketed as artificial flower petals and in a particular shape, though made of textiles or fabric. 38. In this background and with entry 78 being so worded to include such items or goods which can possibly fit into general description and not to understand illustrations given in items 1 to 6 as exhaustive. It is in this background, a submission is made on behalf of the assessee that it could be taken as clothing accessory, etc. 39. Items mentioned in entry 78(2), which is clothing accessories, not knitted or crocheted including handkerchiefs, shawls, scarves, mufflers, mantilla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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