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TMI Blog2024 (1) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... TR No. 14/2022 and in STR Nos. 17-21/2022: "(a) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in ignoring the fact that the assessment order passed by the respondent Assistant Commissioner under Section 25 of Rajasthan Value Added Tax Act, 2003 was passed merely on a change of opinion and there was no reason to believe that the petitioner has avoided or evaded tax or has not paid tax in accordance with law or has availed input tax credit wrongly? (b) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in ignoring/overlooking the fact that Memory Cards are IT products covered under Entry No. 3 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 per cent on 'Computer system and peripherals, computer printers excluding multifunctional devices & electronic diaries'?" In STR Nos. 114-115/2020 and in STR Nos. 1-6/2023: "(a) Whether the 'Memory Cards' are not 'Prepared unrecorded media' as per entry no. 10 of Schedule-IV of RVAT Act-2003 made available since introduction of RVAT in the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad determined that the goods in question, i.e. the memory cards, were not covered under any of the specific entries and hence liable to be taxed at the residuary rate of 14/14.5 percent. Consequently, the assessment order dated 15.12.2015 was passed wherein additional tax, interest and penalty was imposed upon the petitioner-assessee. The Appellate Authority, vide order dated 29.03.2016, upheld the levy of tax and interest but set aside the penalty. The Tax Board, vide order dated 15.12.2021, had also maintained the levy of additional tax and interest. 4. Learned counsels for the petitioner-assessee contends that the petitioner-assessee was rightly classifying the goods in question as 'I.T Products', as specified in Entry No. 65 of Schedule IV to the RVAT Act and accordingly discharging its VAT liability by treating the same as 'prepared unrecorded media', as classifiable under Entry 10 of Part A of Schedule IV of the RVAT Act. Learned counsels further contends that all the authorities below have erred in law by classifying the goods in question under the residuary head and not the specific head and therefore erroneously imposed additional tax and interest upon the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for 'recording sound or similar recording or other phenomena'. The term 'media' contained in Entry No. 10 of Part A of Schedule IV to the RVAT Act, as per the Major Law Lexicon, is defined to mean the material on which data is copied, written or recorded. The memory cards traded by the petitioner-assessee are capable of recording data, information, sound, as well as video and hence memory cards qualify to be 'media', which are capable recording sound and images. 4.3. The third submission of learned counsel for the petitioner-assessee is that the Entry No. 10 of Part A of Schedule IV to the RVAT Act is inclusive and not exhaustive. The 'inclusive clause', specifies that various products such as Compact Disc (for short "CD") and Digital Versatile Disc (for short "DVD") shall be included in the said entry. It is submitted that the inclusive clause cannot be interpreted to restrict the scope of entry to only CD or DVD as the purpose of the inclusive clause is to include all such products which are capable of 'sound recording or similar recording of other phenomena', within the scope of the said entry. 4.4. The fourth submission of learned counsel for the petitioner-assessee is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified as an I.T Product. Thus, the product in question, i.e. memory card can also be classified under Entry 3 of Part A of Schedule IV to the RVAT Act which read as "Computer system and peripherals, computer printers excluding multifunctional devices, and electronic diaries". It is submitted that Part A of Schedule IV, which germinates from Entry No. 65 of Schedule IV, lays out a comprehensive list of I.T. products, for which a lower rate of tax is prescribed. It is submitted that different I.T. products may get classified under one or more items specified in Part A as entries in Part A are not water-tight or mutually exclusive. This is more so when the product is capable of being used in a fungible manner like in the case of memory cards. Reliance is placed on Gauhati High Court judgment of Sterlite Optical Technologies Ltd. Vs. Oil India Limited & Ors. reported in [(2008) 14 VST 9 (Gauhati)], Madras High Court judgments of State of Tamil Nadu vs. CMC Limited reported in [(2014) 75 VST 413 (Mad.)], Canon India Pvt. Ltd. vs. State of Tamil Nadu reported in [(2015) 80 VST 483 (Mad.)], and judgment of this Court in Compuage Infocom Limited and Ors. vs. The Assistant Commissioner, Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022, decided on 11.09.2023; Neutral Citation: 2023/RJJP/19647). SUBMISSIONS OF RESPONDENT-REVENUE 5. Per contra, supporting the concurrent findings of the authorities below, learned counsels for the revenue submits that no question of law worth consideration arises in the present STRs. Learned counsel for the revenue submits that the specific entry where the assessee was classifying the goods in question was limited to media used for sound recording and other recording of like nature. It is contended that the said entry is specific and extended meaning cannot be given to the same to include data storage devices. It is further submitted that data storage devices, including memory cards, were only inserted in Part A of Schedule IV to the RVAT Act with effect from 08.03.2016 and the said amendment was not stated to be retrospective in nature. Learned counsel for the revenue submits that the notification dated 08.03.2016 was consciously silent on the retrospective application of the amendment and as per settled position of law, an amendment is always prospective in nature unless expressly stated otherwise. Reliance in this regard is placed on Apex Court judgment of Eureka Forbes Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V to the RVAT Act. 9. It is noted that the standard practice followed by the petitioner-assessee, since inception, was classifying the goods in question as 'I.T. products' taxable as per Entry 10 of Part A of Schedule IV to the RVAT Act. The petitioner-assessee was regularly filing the returns as required under law and the jurisdictional assessing authority had accepted said classification for several years. It was only after the survey, which was conducted on 08.10.2015, that the opinion of the respondent-revenue changed - after about 9 years - only on account of the determination order dated 15.09.2015, passed under Section 36 of the RVAT Act by the Commissioner, Commercial Taxes Rajasthan, and the long-accepted classification was abandoned. On perusal of the impugned orders, it is apparent that the authorities merely relied on the determination order while adjudicating the claim of the petitioner-assessee. 10. Since the genesis of the entire controversy is the determination order dated 15.09.2015, it is considered necessary to adjudge the same, especially since the validity of the same is also challenged in some of the STRs. It is also deemed necessary to consider the context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2325;ार उक्त प्रविष्टी से स्पस्ट है कि CD, DVD, Magnetic Tape Cassette for Sound recording इस प्रविष्टी में आच्छादित होने के कारण 5 प्रतिशत कि दर से कर योग्य है | किन्तु Memory Card, (Micro S.D & S.D Card) Video Cassette उक्त श्रेणी में शामिल नहीं है | इसी प्रकार Recorded CD, Recorded DVD भी उपरोक्त श्रेणी में शामिल नही ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2340;ा है | इसी प्रकार मेमोरी कार्ड/एस.डी कार्ड का विभिन्न उपकरणों में अलग-अलग उपयोगिता होने के कारण अधिनियम कि अनुसूची IVA के क्रम संख्या 28 (Parts and Cassette..) में आच्छादित नहीं है | अतः मेमोरी कार्ड/एस.डी कार्ड भिन्न-भिन्न उपकरणों ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #2381;रतिशत से कर योग्य है | अतः यह अभिनिर्धारित किया जाता है की CD, DVD, Magnetic Tape Cassette for Sound recording राजस्थान मूल्य परिवर्दित कर अधिनियम, 2003 कि अनुसूची IVA के प्रविष्टी संख्या 10 आच्छादित होने के कारण 5 प्रतिशत की दर से कर योग्य है तथा मेमोरी कार् ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in computer system to expand the capabilities of computer system. Be that as it may, since the revenue has not discharged its burden to show that the good in question, i.e. memory cards, which is undisputedly 'media' which can record 'sound' and other phenomena, would not be covered under the specific entry of either Entry No. 10 or Entry No. 3 of Part A to Schedule IV to the RVAT Act, the levy of additional tax and interest, merely on the basis of determination order passed by the Commissioner, cannot be sustained. 12. Even otherwise, the order(s) impugned of the learned Tax Board and all the authorities below deserves to be quashed and set aside for the following additional reasons:- 12.1. Because the reliance placed by all the authorities below on the determination order dated 15.09.2015 is onerous. The Appellate Authority and the Tax Board are discharging quasijudicial/judicial functions and no departmental circular, clarification or determination order is binding on such bodies when exercising quasi-judicial/judicial functions. Reliance in this regard can be placed on Apex Court judgment of Orient Paper Mills Ltd. vs. Union of India: AIR 1969 SC 48. 12.2. Because the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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