Craft Polymers vs Sales Tax Officer on 23 December, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

WA.No. 2562 of 2009()


1. CRAFT POLYMERS, REPD. BY MANAGING
                      ...  Petitioner

                        Vs



1. SALES TAX OFFICER,
                       ...       Respondent

2. THE COMMISSIONER, DEPARTMENT OF

3. STATE OF KERALA, REPD. BY

                For Petitioner  :SRI.M.K.DILEEP KUMAR

                For Respondent  :GOVERNMENT PLEADER

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice P.Q.BARKATH ALI

 Dated :23/12/2009

 O R D E R
                     C.N.RAMACHANDRAN NAIR &
                             P.Q.BARKATH ALI, JJ.
                ....................................................................
                         Writ Appeal No.2562 of 2009
                ....................................................................
               Dated this the 23rd day of December, 2009.

                                       JUDGMENT

Ramachandran Nair, J.

Question raised is whether stainless steel fan hooks made by the

appellant which is a small scale industrial unit, from stainless steel rods

attract tax at 12.5% under Entry 103 of Notification SRO 82/006 or

whether it is an item falling under sub-entries 21 or 22 of Entry 43 of

the IIIrd Schedule to the KVAT Act as claimed by the appellant. We

have heard counsel for the appellant and Government Pleader for the

respondent.

2. Counsel for the appellant first submitted that all other dealers

in stainless steel fan hooks are assessed at the rate of 4% treating the

item as one falling under Entry 43 of the IIIrd Schedule. A

clarification issued by the Commissioner in the case of another party

vide order No.C7.58114/05/CT dated 28.7.2006 is produced in court.

Among the items on which rate of tax is clarified, one item is hooks

and eyes which is made taxable at 12.5%. The contention of counsel

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for the appellant is that hooks and eyes go together and those items are

attachments to windows and the hooks referred to therein is not fan

hook. We find force in this contention because items clarified by the

Commissioner vide order abovereferred are fittings for door, window

etc. Fan hook is not specifically covered under the clarification, even

though MS Clamp for fan fittings is covered by Entry 14. The two

items covered by sub-entries 21 and 22 of Entry 43 of the IIIrd

Schedule are the following:

————————————————————————————-

Sl.No. Description of goods HSN Code

————————————————————————————-
(21) Bars and rods, hot-rolled, in irregularly 7221
wound coils, of stainless steel

(22) Other bars and rods or stainless steel; angles, 7222
shapes and sections of stainless steel: Bars
and rods, not further worked than hot-rolled,
hot-drawn or extruded.

————————————————————————————-

The contention of counsel for the appellant is that stainless steel

products are covered by the above two entries. His further contention

is that fan hook is nothing but stainless steel rod cut to sizes and bent

3

on either side without any manufacturing activity. We find force in the

contention that the manipulation done on steel rod to make it hook is a

simple work of bending by hand or mechanically. Admittedly semi-

finished steel products and angles, shapes, bars and rods of stainless

steel products are covered by Entries 21 and 22. Since stainless steel

fan hook is not specifically covered by the entry, it is for the

Commissioner to clarify whether such products are intended to be

covered by sub-entries 21 and 22 of Entry 43. We are in agreement

with the assessee’s contention that hooks and eyes referred to in the

clarification abovereferred do not include fan hooks. Admittedly

stainless steel fan hook is not covered even under Notification SRO

82/2006 except under the residuary entry of the notification, namely,

Entry 103, if the item is not covered by any other Schedule entry or

under any other Entry of the Notification. Counsel also pointed out

that value added product like stainless steel nails under the above

clarification is subject to tax only at 4%. Since the item is not

specifically covered by any of the entries or under the Notification, we

direct the Commissioner to clarify on the rate of tax on stainless steel

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fan hooks on an application to be filed by the appellant along with copy

of this judgment, which the appellant is directed to do within ten days

from the date of receipt of copy of this judgment. The Assessing

Officer will modify the rate of tax in the assessment, if the

Commissioner issues clarification on rate of tax at variance with the

rate applied by the officer. There will be direction to the respondents

not to recover the excess rate of tax assessed from the appellant for two

months from now. The Commissioner is directed to pass orders on the

clarification application within one month from the date of receipt of

the application. Recovery thereafter will depend on the orders of the

Commissioner in the clarification application to be filed by the

appellant.

C.N.RAMACHANDRAN NAIR
Judge

P.Q.BARKATH ALI
Judge
pms