9911796707
TMI Blog2015 (1) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... sh the proceedings of the 2nd respondent dated 25.01.2008 and to forbear the 2nd respondent from levying or recovering tax under the Tamilnadu Value Added Tax, Act 2006 over and above 4% on the sales of Women's Horlicks covered by Sl.No.82 of the Part B of the First Schedule to the Act. The impugned proceedings dated 25.01.2008 is a clarification issued by the 2nd respondent, Commissioner of Commercial Taxes, Chennai. The petitioner filed an application dated 04.10.2007 requesting for clarification with regard to the rate of tax of Women's Horlicks. An opportunity of personal hearing was granted to the petitioners in which it appears that the petitioners have placed all the materials in support of their contentions. The 2nd respondent by the impugned order clarified that Women's Horlicks is not a milk product and they are made of milk along with other ingredients and liable to tax at the rate of 12.5% under Entry No. 69 (Code No.301) of Part C of the First Schedule to the Tamilnadu Value Added Tax Act, 2006. 4.Aggrieved by the same, the petitioners have independently filed the writ petitions. The petitioners have been marketing the product Women's Horlicks by charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench in the case of H.M.M. Limited as stated supra. The 2nd respondent failed to take note of the fact that if milk predominated by weight and value, the goods will remain milk or milk product , the 2nd respondent cannot state that goods are taxable at 12.5% under the residuary entry when there is specific entry which prevails over a residuary entry. 8.Further it is submitted that when the goods are primafacie classifiable as milk product and milk food preparation , resort to the residuary entry is ex facie illegal and without jurisdiction. The petitioners were compelled to approach this Court challenging the clarification, since the clarification having been issued by the Commissioner would bind the assessing officer through out the state and cause irreparable hardship to the petitioners as well as its distributors. 9.The respondents in their counter affidavit submitted that the goods namely, Women's Horlicks which is branded is liable to be taxed at 12.5% as per Part 'C' of the First Schedule. In the beginning, no goods were listed out under Part 'C' of the First Schedule and subsequently an amendment was passed with effect from 12.07.2007 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, the petitioner has placed for consideration before the authority as regards the constituent of the product. The petitioners' case is that milk is constituted at 58.8% by weight in caramel flavour and 56.4% by weight chocolate flavoured Women's Horlicks and in terms of the value in the finished product, it constitutes 76.11% and 69.8% respectively. 13. Further the petitioners would state that Women's Horlicks is registered under Clause 5 of the Milk and Milk Products' Order, 92 and certificate has been issued by the Government of India dated 13.08.2005 under Section 2(g) of the said Control Order. The Milk product means cream, malai, curd, yogurt, skimmed milk, butter, deshi butter, ghee or butter, oil and includes any other substances containing on a dry weight basis not less than fifty percent of milk solids (excluding added sugar), or any other substance declared by the Central Government notification as a milk product . Therefore, it is their case that Women's Horlicks is classifiable as a milk product . In the petitioner's own case, which was filed by the erst while company, which has now been amalgamated with the present petitioner, the question ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to interfere with the decision of the High Court. The question is confined to a period of interregnum between 198* and 1991 whereafter the examination itself was done away with, so far as these goods are concerned. Secondly, the first respondent asserts that it has, during the interregnum, collected tax only at 4 percent, and that any interference in the order of the High court would expose the first respondent to an unforeseen liability. We direct the first respondent to file an affidavit to the effect that taxes higher than 4 percent were not so collected. This may be done within four weeks. The special leave petitions, in so far as the first respondent is concerned, are dismissed. However, if the Revenue has grounds to assail the correctness of the affidavit, it is at liberty to do so and mention. So far as the 2nd respondent is concerned, the question in relation to the product 'Spert' will be considered separately. Call after 3 weeks." 15.Though, the petitioners have placed the above details before the 2nd respondent, the 2nd respondent without adverting to any of the facts has passed a non-speaking order (clarification) solely on the ground that the product contains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material or component which gives to the product their essential character. Though these decisions were rendered under other central laws, could be very well applied to the cases on hand as we are concerned with classification of the product in question. 16. The 2nd respondent has not adverted to any of those issues, nor applied the proper tests, failed to ascertain the essential character of the product and merely stated that some other ingredients is also added, which is not milk . The decision in the case of H.M.M. Limited, supra, which has been confirmed by the Hon'ble Supreme court has also not been dealt with by the 2nd respondent. Therefore, this Court is convinced that the impugned clarification is devoid of reasons and arbitrary and to be held to be bad in law. Accordingly, issue no.2 is held in favour of the petitioners. In the light of the above, this Court is of the view that Issue No.1 need not be decided by this Court, since it requires examination into factual contention raised by the petitioners. The 2nd respondent is required to apply the proper tests, ascertain the essential character of the product bearing in mind the certificate filed by the petitioners un ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
