10. Haryana and Another, VAT App. No. 73 Of 2011, Dated 27th October, 2016 (P&H).

Facts

The appellant engaged in the business of manufacture and sale of tissue paper, napkin, toilet paper rolls, kitchen wipes and facial tissues filed application u/s. 56(3) of the Haryana Value Added Tax Act,2003 to the State Government for clarification, as to under which Entry the aforesaid goods being manufactured by the appellant would fall and the rate of tax leviable thereon. The Financial Commissioner and Principal Secretary to the Government of Haryana, Excise and Taxation Department, vide order dated 18.1.2010, opined that the goods being manufactured by the appellant were not forming part of Entry 57 of Schedule ‘C’ of the Act. Hence, it would be taxable @ 12.5%, being unclassified goods. The order was challenged before the Tribunal. The Tribunal, vide order dated 29.7.2011, dismissed the appeal. The Company filed appeal before the Punjab and Haryana High Court against the impugned order of the Tribunal.

Held

Entry 57 in Schedule ‘C’ only prescribes ‘paper’, ‘paper board’ and ‘newsprint’. It does not provide for any inclusions or exclusions. It further does not provide for any user test. The word ‘paper’ used in the Entry is in generic form, which will include all types of paper, which has its essential characteristics. It is not in dispute that even the tissue paper, napkin, toilet paper rolls etc. retain the essential characteristics of paper. It is only that it is in different strength and is used for different purposes. There is no competing entry to find out whether product falls in entry ‘A’ or ‘B’. The residuary entry is to be invoked in case, with liberal construction to the specific entry, the product could not be found to be forming part thereof. Accordingly, the High Court allowed the appeal and held that the tissue paper, paper napkins etc. are covered by entry 57 of the Schedule C of the act within the expression paper and liable to 4% tax.