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TMI Blog2016 (3) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... he C.E. Tariff Act. Therefore the determination of any question under Section 105(2) of the VAT Act, can’t be made, without due application of mind, to the implication of the entries of the C.E. Tariff Act. The item Sodium Silicate as is understood in common parlance (glass frit or compounds of rare earth metals) is also required to be considered in determination on the taxability of the product, as was represented by the manufacturer Association. Deciding the higher rate of tax at the instance of a new manufacturer, who is exempted from tax to make the Ruling applicable to those who are not exempted from tax was not a correct approach. Therefore as the Commissioner gave the ruling at the instance of an exempted party without affording a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the Nilachal Chemical (P) Ltd. (respondent No.5) noted that Sodium Silicate is an unspecified item, which is not covered by any of the 168 entries of the IInd Schedule and hence as a residuary item, is covered by the Vth Schedule of the VAT Act and therefore the product is liable to be taxed @12.5%. 3. When the VAT Act was introduced w.e.f. 1st May, 2005, the Sodium Silicate manufacturers found that their product is not included amongst the numerous items of the industrial inputs category, specified in Part- C of IInd Schedule of the VAT Act. Therefore under the umbrella of the All Assam Sodium Silicate Manufacturer s Association, the representation was made on 6.6.2005 (Annexure-A), to the Commissioner of Taxes for inclusion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the determination made by the Commissioner, Mr. JC Gaur, the learned counsel submits that Sodium Silicate is an alkaline product manufactured from silica sand, soda ash and water and admittedly silica sand is the earth metal and soda ash is an alkaline product. Therefore it is argued that this item should have been included in Entry 35 of the schedule to the VAT Act, which fits in with Entry 28.05 of the C.E. Tariff Act, as it relates to alkaline and the earth metals. 6. Alternately the petitioner contends that the product Sodium Silicate can be included in Entry 71 of the Part- C of IInd Schedule of the VAT Act, as it is a compound of rare earth metal of yttrium or of scandium or a mixture of both these metals. Referring to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contend that an advance ruling on the application of the manufacturer Association should have been given after affording a reasonable opportunity to the applicants and since no such opportunity was afforded to the existing manufacturers, the logic of the applicability of the advance ruling given on the application of the new entrant, which is made applicable for the existing manufacturers, is questioned by the petitioners. 11. On the other hand, Mr. S. Saikia, the learned standing counsel for the Finance (Taxation) Department submits that the item Sodium Silicate is not enlisted against any of the entries in Part- C of IInd Schedule of the VAT Act and therefore it is argued that tax on such unlisted item has to be charged under the Vth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority after taking into account that the item is not covered by any of the listed entries under Part- C of IInd Schedule of the VAT Act, has simply declared that the item is taxable at a higher rate as a residuary item, under the Vth schedule of the VAT Act. 16. The items that are listed as industrial inputs in Part- C of IInd Schedule of the VAT Act do not stand independently but refers to the corresponding entries in the C.E. Tariff Act. Therefore the determination of any question under Section 105(2) of the VAT Act, can t in our view be made, without due application of mind, to the implication of the entries of the C.E. Tariff Act. 17. Moreover the item Sodium Silicate as is understood in common parlance (glass frit or compounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner gave the Ruling on 5.1.2006 (Annexure-C), at the instance of an exempted party without affording any hearing to the existing manufacturers who are impacted by the said decision. Therefore we direct the Commissioner of Taxes to re-determine the classification and the rate of tax for Sodium Silicate, by providing a reasonable opportunity of hearing to the Association, who made the representation on 6.6.2005. But it is made clear that while determining the rate of tax, all relevant parameters such as the implication of classification of the product under the C.E. Tariff Act, the chemical composition of the item and its use as an industrial input which are included under Part- C of IInd Schedule of the VAT Act, how the product is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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