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TMI Blog2019 (1) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... mere geometrical alteration of a shape would form part of the Entry. In such a situation, the original Entry itself was comprehensive enough to have included it - In the present case, there is really no chemical change which occurs in the substance as dehydration only reduces the water content and thereafter, it is mixed with additives for the purpose of increasing bonding and other related purposes. Substantively, the character of ‘gypsum’ is not changed in the mechanical exercise of converting it into a board along with, of course, certain chemical processes of heating and mixing, to achieve an ultimate objective. Wherever an expression ‘in all its forms’ is used, it has resulted in an expanded meaning, which is a logical corollary of such an expression being added to the original Entry. To take a view to the contrary in the given situation would amount to giving no meaning to the added expression as there are really not too many possibilities on what could have been included in such an expression. Also, in terms of notification No.S.O.36.No.F.12(59)FD/Tax/2014-14 dated 14th July, 2014, the RVAT was amended to include, in Schedule V, a separate Entry under item No.19(viii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to aforesaid. The Additional Commissioner, vide order dated 27.9.2007, opined that gypsum board , being commercially a different product would not fall under Entry 56 of Schedule IV of the RVAT but would fall under the residuary Entry, making it subject to the 12.5% slab of taxation. The gravamen of reasoning of the Additional Commissioner, as found from the order, is that gypsum board is a separate commercial product using a different name and thus the factum of 95% of the gypsum board being constituted of gypsum is not relevant, as supported by the fact that a long manufacturing process is involved in preparing gypsum board , wherein in addition to the calcination process, additives, paper, foam, water etc., are used, resulting in the formation of a product having uses, quite dissimilar to gypsum. 4. M/s. Lohiya Agencies/respondent No.1, is stated to be a merchant dealing in gypsum board procured from IGL and, thus, came to be assessed by the Commercial Tax Officer for the assessment year 2006-07 and 2007-08 on 25.8.2007, post-inspection of his premises. Since the sale of gypsum board has been made with the VAT rate at 4% despite the said goods not falling under E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e external surfaces covered with paperboard. The result is a three-layer composite composed of paper/gypsum/paper. The primary raw material continues to be gypsum mineral [Calcium Sulphate Dihydrate (CaSO4.2H2O)] and cellulose. 9. A perusal of the material available in public domain on manufacture of gypsum board shows a common thread insofar as methodology is concerned. It will be useful to extract the process from one such material as under:- Gypsum board is manufactured in a two step process. In the first step, finely crushed and ground gypsum [calcium sulphate dihydrate (CaSO4.2H2O)] is heated and partially dehydrated (Calcined) to Calcium Sulphate Hemihydrate (CaSO4. H2O), called stucco in the industry, also popularly known as Plaster of Paris . A unique characteristic of stucco is that when it is mixed with the proper amount of water, it forms a smooth plastic mass which can be molded into any desired shape. When the hardening has been completed, the mass has been chemically restored to its rock-like state. This characteristic has also been used in the development and production of gypsum board. In the second step of manufacturing process stucco is mixed with number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt was concerned with a similar legal conundrum as to whether gypsum board would fall under the Entry C-41 of the Maharashtra Value Added Tax Act which reads as gypsum of all forms and descriptions . The court opined that the legislature having used the phraseology, some meaning would have to be assigned to the words by which there would be an explanation of the terminology. The Division Bench, relying on the case of State of Gujarat v. Sakarwala Brothers (supra) observed that the expression form was used for items with various shapes, sizes as well as uses vis- -vis the original product. It was the chemical composition of the substance in question that mattered for deciding whether it fell within the scope of a particular Entry. Since the main composition of gypsum board continues to be gypsum, which takes the form of the board, gypsum board was held to fall in Entry C-41 of the Maharashtra Value Added Tax Act. (2) Trutuf Safety Glass Industries v. Commissioner of Sales Tax (supra) This judgment has been used as an aid in the impugned order to support the conclusion in favour of the assessee. 12. . The word 'form' connotes a visible aspect such as shape o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This court examined whether glassware manufactured by the assessee could be understood to be a type of glass or glass sheet so as to be taxable at the rate of 3% vide notification S.O No. 25, dated 25.06.2001, issued by the government of Jharkhand. It was observed as under: 22. It is a settled law that in taxing statutes the terms and expressions must be seen in their common and popular parlance and not be attributed their scientific or technical meanings. In common parlance, the two words type and form are not of the same import. According to the Oxford Dictionary, whereas the meaning of the expression types is kind, class, breed, group, family, genus ; the meaning of the word form is visible shape or configuration of something or the style, design, and arrangement in an artistic work as distinct from its content . Similarly, Macmillan Dictionary defines type as a group of people or things with similar qualities or features that make them different from other groups and form as the particular way in which something appears or exists or a shape of someone or something . Therefore, types are based on the broad nature of the item intended to be classified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(i) of the Act in this economic sense. At every stage of production, it is obvious there is consumption of goods even though at the end of it there may not be final consumption of goods but only production of goods with higher utility which may be used in further productive processes. Applying the above test, it has to be held that the assessees had consumed the paddy purchased by them when they converted it into rice which is commercially a different commodity. 24. Applying the reasoning adopted hereinabove, it must be held that when wheat is consumed for producing flour or maida or suji, the commodities so obtained are different commodities from wheat. The wheat loses its identity. It gets consumed and in its place new goods/commodities emerge. The new goods so emerging have a higher utility than the commodity consumed. They are different goods commercially speaking . (emphasis supplied) (6) Alladi Venkateswarlu Ors. v. Govt. of Andhra Pradesh Ors. (1978) 2 SCC 552 Whether parched rice and puffed rice would fall under Entry 66(b) of Schedule I to the Andhra Pradesh General Sales Tax Act,1957 which read rice obtained from paddy that has met tax under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving consideration to the matter in issue, we find that the amended Entry 56 of Schedule IV of the RVAT, read as gypsum in all its forms , would include gypsum board under the term all its forms . 14. We are persuaded to come to the aforesaid conclusion on the basis that, it can hardly be doubted that a meaning has to be given to the Entry made by the legislature, expanding the original Entry from gypsum to gypsum in all its forms . If the object was to include only gypsum , then why would the Entry be changed to gypsum in all its forms ? The corollary would also be as to what is meant by in all its forms , as it is not, as if mere geometrical alteration of a shape would form part of the Entry. In such a situation, the original Entry itself was comprehensive enough to have included it. We have noticed the view taken by the Bombay High Court in an almost identical situation except that the Entry there was of all forms and descriptions . But the discussion was more or less confined to the expression of all forms . This court in Sakarwala Brothers (supra) observed that it was the chemical composition of the substance in question that mattered, to decide whether it wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat take away from the description of gypsum? We think not. Even if the sheets are added, the wide description in all its forms would certainly include gypsum board . 18. In the case of Sakarwala Brothers (supra), the factum of there being the same chemical composition of patasa, harda and alchidana and the ability to convert them back into sugar on being dissolved in water and on being subjected to other appropriate processes , resulted in a finding that they would be included as any form of sugar . In fact, gypsum board, devoid of its top and bottom boards, can be utilized, with some processing, in a similar manner as gypsum. When the meaning of the word form is meant to include visible shape or configuration of something , as observed in State of Jharkhand (supra), we cannot see any reason why gypsum board would not form a part of the expanded terminology in all its forms . 19. In the same line, this Court in Alladi Venkateswarlu (supra), has given an expanded definition to rice obtained from paddy that has met tax under the Act to include parched rice and puffed rice within the term rice as it had not changed its identity so as to not be describable as rice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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