LOTUS ROOFINGS P LTD Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE petitioner, a private limited company, is a regular sales tax assessee, under the provisions of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the Act") and is being assessed regularly to sales tax by the Additional Deputy Commissioner of Commercial Taxes (Assessments), Hassan, and is carrying on business as dealers in red mud plastic sheets. These items are obtained by way of stock transfer from the head office of the company situated at madras. The transactions took place within the State of Karnataka. The assessee was assessed for the assessment year 1992-93 in respect of the above item. The contention of the assessee is that, the item in question was liable to be taxed under entry 7 (ii) of Part "p". of the Second Schedule to the Act as a plastic item, whereas, the stand of the assessing authority is that the above items were liable to be taxed as roofing materials under entry 9 of Part "r" of the Second Schedule to the Act. The pre-assessment notice has been issued to the assessee. The assessee was taxed as per the rate of tax mentioned under entry 9 of Part "r" of the Second Schedule to the Act. Questioning the same, an appeal came to be filed. The same was dismissed on August 30, 1995, by the Joint Commissioner of Commercial Taxes (Appeals), Malnad Division, Shimoga. The matter was carried on in second appeal and the second appeal also came to be dismissed, holding that, since the item has the dominant use of roofing, the same is to be treated as "roofing materials". Therefore, it has to be taxed under entry 78 of the Karnataka Tax on Entry of Goods act, 1979 (hereinafter referred to as "the KTEG Act"), i. e. , the wording in entry 9 of Part "r" of the Second Schedule to the KST Act is quite comparable to the entry 78 of the First Schedule to the KTEG Act.

(2.) THE main contention of the petitioner is, the plastic roofing material is liable to be taxed under entry 70 of the First Schedule [i. e. , entry 7 (ii) of Part "p" of the Second Schedule] to the Act and not under entry 78 of the First Schedule (i. e. , entry 9 of Part "r" of the Second Schedule) to the act. On the other hand, it is contended by the learned counsel appearing for the Revenue that, as the matter is about roofing material, though it is a plastic, it is covered by entry 78 (entry 9 of part "r" of the Second Schedule to the Act ). Even the submission of the petitioner before the tribunal was that the classification of the goods in question has to be made on commercial parlance theory and the items being plastic items have got to be treated for purposes of levy of tax as "plastic articles".

(3.) IN view of the abovesaid contentions, the question that arises for consideration is :