By C. B. Thakar | Advocate
G. G. Goyal, Janak Vaghani | Chartered Accountants
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VAT — Rate of tax — Entries in Schedules — Classification — Commodity capable of only single use — User test applicable — De-oiled cake of castor, neem or mahua used only as fertiliser — Covered by entry relating to ‘Organic manure and chemical fertiliser’, Haryana Value Added Tax Act, 2003, Schedule Entry — B-27 and C-6.
Facts
The Sales Tax Officer, Haryana filed writ petition against the decision of the Haryana Sales Tax Tribunal, reversing order of the Commissioner of Sales Tax passed u/s.56(2) of the Act the Tribunal had held that sales of de-oiled cake of castor, neem and mahua is a fertilser and covered by Schedule Entry B-27 and hence as such tax-free.
Held
(1) Schedule Entry B-27 of the Act covers organic manure and chemical fertiliser, whereas Schedule Entry C-6 covers oil-cakes and de-oiled cakes including de-oiled rice bran. A de-oiled cake of castor, neem and mahua is organic manure as it is the offshoot of a living organism, namely, tree-born oil-seeds.
(2) The issue before the Court was whether an item apparently included in a specific wider entry can be held to fall in a more general entry on the ground of its use? Different commodities are classified on the basis of their use and denomination. Generally, a tariff entry is construed by applying common parlance test by considering what sense is to be attributed to an entry in the popular sense by people conversant with the subject-matter. This general principle can be departed from if the context so requires. User test though not determinative of nature of goods is not always ruled out particularly when commodity in question is capable of being put to only one use. Accordingly, the High Court approved the finding of tribunal that items in question will fall under Entry 27 of Schedule B and tax-free.
The High Court dismissed the writ petition filed by the Revenue and confirmed the order of the Tribunal.
