news round up - Taxmann

212 Goods & Services Tax Cases - Reports [Vol. 1
Karnataka Value Added Tax Act, 2003 (hereinafter referred to as ‘the Tax’
for brevity).
2. The facts leading to the filing of this appeal are that the appellant is
having an industrial unit at Kodigehalli village, Doddaballapur Taluk
engaged in extraction of chilly oleoresin from dry chillies. It was contended
by the appellant before the Advance Ruling Authority that, by
virtue of the process carried out for the extraction of oleoresin, parts of the
dry chilly that remains thereafter is termed or called in common parlance
as dry chillies, skinned/cut chilly and crushed chilly or spent chilly.
3. It was the contention of the appellant that under section 3 of the Act, is
the charging section, sub-section (1) prescribes that tax is to be levied on
every sale of goods in the State by registered dealer or dealer liable to be
registered in accordance with the provisions of the Act and section 4 of the
Act prescribes, the liability to tax as also the rate of tax. It was contended
that as per section 4(1)(a)(ii) of the Act, the rate of tax applicable to the
goods specified in the IIIrd Schedule is 4 per cent and goods which are not
specified in the Schedule or in respect of which no notifications are issued
either granting exemption attracts tax at 12.5 per cent. It was contended
that, IIIrd Schedule as it stood originally incorporated in the Act with
effect from 1-4-2005 specifying categories of goods at Sl. Nos. 1 to 81 and
with reference to the product in question, the entry is at Sl. No. 61 which
reads as under :—
“61. Spices in all forms including jeera (cumin seeds), methi, poppy seeds
(kaskas), Corriander (dhaniya), Shajeera, somph, katha, azwan, kabab chini,
bhojur phool, tejpatha, japatri, nutmeg (marathamoggu), kalhoovu, anised,
turmeric, cardamom, pepper, cinnamom, dal chinny, cloves, tamarind and
dry chillies”.
4. It was submitted that IIIrd Schedule was substituted by new Schedule
with effect from 1-4-2006 and the spices are specified at Sl. No. 89 which
is the enlarged version of Sl. No. 61 as extracted above and the said entry
at Sl. No. 89 reads as under :—
“89. Spices in all forms including jeera (cumin seeds), methi, poppy seeds
(kaskas), coriander (dhaniya), Shajeera, somph, katha, azwan, kabab chini,
bhojur phool, tejpatha, japtri, nutmeg (marathamoggu), kalhoovu, aniseed,
turmeric, cardamom, peppar, cinnamon, dal chinny, cloves, tamarind and dry
chillies including cut chillies, spent chillies and chilly seed, but excluding
spices in the form of masala powder, instant mixes or other mixtures
containing more than one spice or a spice with any other material, wet dates,
hing (asafoetida).”
5. The appellant herein submitted an application on 21-4-2006 before the
Authority for clarification on the rate of tax applicable and said authority
held cut chillies, spent chillies and chilly seeds attracts 12.5 per cent tax
under section 4(1)(b) of the Act for the period 1-4-2005 to 31-4-2006 and
with effect from 1-4-2006, the above goods are eligible to be taxed at the
rate of 4 per cent in view of Entry No. 89 of the Act. It is this order which
is assailed in appeal by the appellant contending as follows :—
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 88
A
B
C
D
E
F
G