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2010] Tropical Flavours (P.) Ltd. v. State of Karnataka (Kar.) 213
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(a) the opening words in Sl. No. 61 of the old IIIrd Schedule as it existed
up to 31-3-2006 under which spices were specified, were ‘spices in all
forms’ followed by enumeration of different types of spices such as
jeera (cumin seeds), methi, poppy seeds (kaskas), etc. and dry chilles.
Thus, dry chillies having not been included in Sl. No. 61, takes
different froms like cut chillies, spent chillies and chilly seeds and
accordingly, it is contended that the Advance Ruling Authority was
in error in holding that the residuary cause is applicable to the
product in question for the period 1-4-2005 to 31-3-2006. It is also
contended that in dry chillies, the outer skin alone is processed to
extract chilly oleoresin or chilly oil and the reminiscence thereafter
which remains after crushing is to be termed as ‘crushed chilly/spent
chilly’ as it consists of the stem, part of the skin and chilly seeds. Thus,
it takes a different form of chilly and which can be sold as such in the
market. It is also contended that with effect from 1-4-2006, the earlier
Entry No. 61 has been amended by insertion of the words “including
cut chillies, spent chillies and chilly seeds” in Entry No. 89 but
“excluding spices in the form of masala powder, instant mixes and
other mixtures containing more than one spice or a spice with other
material” by Amendment Act, 2006 with effect from 1-4-2006 which
in fact includes the present product and thus, the same is also
applicable to the period from 1-4-2005 to 31-3-2006 as the product
which comes out after extraction is an independent product and sold
as such in the market and accepted in common parlance.
6. We have heard Sri Rabinathan, learned counsel appearing for the
assessee and Sri Vedamurthy, learned Government Advocate appearing
for the respondent.
7. Sri Rabinathan, learned counsel for the appellant, in support of his
submissions would press into service the Division Bench decision of this
Court in Habeeb Proteins & Fats Extracts v. CCT 2005 (58) Kar. L.J. 155
particularly drawing our attention to para 26 of the judgment.
7A. Refuting the contentions of the appellant’s counsel, Sri Vedamurthy,
learned Government pleader would submit that order of the Advance
Ruling Authority is in consonance with the relevant entry which was
in existence as on the said date and for the relevant period i.e. 1-4-2005 to
31-3-2006, the cut chillies, spent chillies and chilly seeds not having been
included in Sl. No. 61, the assessee could not claim that the rate of tax
would be at 4 per cent and the authority was justified in holding that it
comes within the ambit of residuary clause as it does not find a place in
Entry No. 61 and accordingly, prays that the appeal be dismissed.
8. Having considered the submissions made at the bar, we find that the
following substantial questions of law arises for consideration in view of
the appeal having been admitted :—
(1) On the facts and in the circumstances of the case of the appellant,
where the opening words of Sl. No. 61 in the Third Schedule as it
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 89