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214 Goods & Services Tax Cases - Reports [Vol. 1
existed up to 31-3-2006 under which spices were specified were
‘spices in all forms’ the Authority for Clarification and Advance
Rulings was right in having held that crushed chilly/spent chilly
which are different forms of dry chillies were not within the meaning
of ‘dry chilles’ in Sl. No. 61 and therefore, in respect of the period prior
to 1-4-2006, the goods were liable to tax under section 4(1)(b) at 12.5
per cent ?
(2) On the facts and in the circumstances of the case of the appellant,
whereby an amendment made with effect from 1-4-2006 the
expression ‘dry chillies’ in Sl. No. 89 of Third Schedule to KVAT Act,
2003 was expanded to include ‘cut chillies’, spent chillies and chilly
seeds’ and the amendment being clarificatory was applicable for
construing the expression ‘dry chillies’ in the old Sl. No. 61 of Third
Schedule as existed up to 31-3-2006 to include cut chillies, spent
chillies and chilly seeds for the said goods to be eligible for levy of tax
at 4 per cent, the Authority for Clarification and Advance Rulings was
right in having held otherwise and issued the clarification that for the
period prior to 1-4-2006 ‘cut chillies, spent chillies and chilly seeds’
were liable to tax under section 4(1)(b) at 12.5 per cent ?
(3) On the facts and in the circumstances of the case of the appellant,
where according to common parlance understanding cut chillies,
spent chillies and chilly seeds are also regarded as dry chillies and
therefore, were within the scope and ambit of the expression ‘dry
chillies’ in the old Sl. No. 61 of Third Schedule to KVAT Act, 2003 as
it existed up to 31-3-2006 to be eligible for levy of tax at 4 per cent, the
Authority for Clarification and Advance Ruling was right in having
held otherwise and issued the clarification that for the period prior
to 1-4-2006, cut chillies, spent chillies and chilly seeds were liable to
tax under section 4(1)(b) at 12.5 per cent ?
9. In order to consider the contentions raised by the respective counsel, it
would be of necessary to extract the relevant provisions of the Act viz.
section 4(1)(b) and Schedule III of the Act which came to be amended with
effect from 1-4-2006. Insofar as Sl. Nos. 61 and 89 as it stood for the period
1-4-2005 to 6-6-2005 and 1-4-2005 to 31-3-2006 has already been extracted
herein supra.
S.4 : Liability to tax and taxes thereof
(a) Every dealer who is or is required to be registered as specified in
sections 22 to 24, shall be liable to pay tax, on his taxable turnover.
(b) in respect of other goods, at the rate of 12.5 (twelve and one half) per
cent.
10. It is seen that in Entry No. 61, spices in all forms including the dry
chillies finds a place. The Legislature in its wisdom having introduced by
incorporating Sl. No. 89 by Amendment Act, 2006 enlarged the scope of the
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 90
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