MYSORE POLYMERS & RUBBER PRODUCTS LTD. Vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-2 AND ORS.

JUDGEMENT

(1.) Heard the learned counsel for the petitioner and the learned Government Advocate.

(2.) The petitioner is a Company engaged in the manufacture and sale of automotive tubes and other rubber products at its factory in Mysore. It is a registered dealer under the provisions of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as the "KVAT Act", for brevity) and also under the Karnataka Tax on Entry of Goods Act, 1979 (hereinafter referred to as the "KTEG Act", for brevity). It has filed monthly returns in Form VAT -100 declaring value of goods liable to entry tax and paid the tax as admitted therein. The 1st respondent is said to have verified the statement of accounts produced and concluded the re -assessment under Sec. 6(1) of the KTEG Act dated 30.06.2015 in respect of the year 2009 -10 by considering that Rubber Process Oil of the value of Rs. 2,86,59,985/ - as being liable to entry tax at 5%. Similarly, in respect of the year 2010 -11, assessment is concluded under Sec. 5(4) of the KTEG Act dated 30.06.2015 and levied entry tax at 5% on the value of Rubber Process Oil of Rs. 2,80,60,569/ -. The 1st respondent, according to the petitioner, has without any independent application of mind, merely referred to and relied upon the clarification issued by the 2nd respondent dated 05.12.2012 to the effect that Rubber Process Oil, which is used as a lubricating agent in the manufacture of rubber products was liable to entry tax at 5% under notification No. FD 11 CET 2002(I) dated 30.03.2002. The 1st respondent has also levied and demanded interest. The said assessment orders are enclosed.

(3.) It is the argument of the Counsel for the petitioner that the tax under the KTEG Act on the value of goods that are listed under the First Schedule to the said Act are at the rates specified in the notification issued. The Rubber Process Oil purchased by the petitioner and used by it as an input is one of the goods listed in the First Schedule to the KTEG Act and is not covered by Government Notification No. FD 11 CET 2002 (I) dated 30.03.2002 at Annexure 'C'. The levy of entry tax at 5% on the value of Rubber Process Oil is lacking in jurisdiction and opposed to law and therefore, the impugned assessment orders lack jurisdiction and are opposed to law.