CANDID INDUSTRIES Vs. COMMISSIONER FOR COMMERCIAL TAXES

JUDGEMENT

(1.) This appeal has been preferred under Section 62(1) of the Kerala Value Added Tax Act, 2003 read with Rule 80(1) of the Kerala Value Added Tax Rules, 2005 against the order passed by the Commissioner of Commercial Taxes dated March 2, 2006 holding that super glue imported and marketed by the appellant is taxable at the rate of 12.5 per cent coming under serial number 3(8) of SRO No. 82 of 2006.

(2.) The appellant is importing and distributing Sticko brand super glue, which, according to the appellant, is manufactured from organic chemicals and is mostly used as industrial input particularly in the automobile industry. The appellant has been collecting 12.5 per cent till July 2005 when they have obtained certificate from the Cochin University of Science and Technology stating that the Sticko brand super glue marketed by the appellant is methyl cyano acrylate which is an ester of unsaturated a cyclic monoacid which comes under HSN Code 2916.19.50. The appellant then sent a letter dated July 19, 2005 to the Sales Tax Officer stating that the super glue sticko brand marketed by the appellant is an item falling under item 164(10) "esters of unsaturated a cyclic monoacids not elsewhere specified" of the Third Schedule to the Kerala Value Added Tax Act, 2003 under which tax payable for the sale of the item shall not exceed four per cent. The Sales Tax Officer found no reason to accept the said request which led to the appellant filing W. P. C. No. 1983 of 2006 before this Court. This Court disposed of the writ petition directing the Commissioner to take a decision on the claim raised by the appellant regarding rate of tax on Sticko brand super glue marketed by the appellant. Consequently the matter was considered by the Commissioner. Commissioner took the view that super glue imported and marketed by the appellant is taxable at 12.5 per cent coming under serial number 3(8) of SRO No. 82 of 2006. The Commissioner has however failed to consider the question as to whether the super glue falls under item 164(10) of the Third Schedule to the Kerala Value Added Tax Act, 2003 or not.

(3.) Sri V.M. Kurian, counsel appearing for the appellant, submitted that the item would fall under item 164(10) of the Third Schedule. Reliance was placed on the certificate issued by the Cochin University of Science and Technology. Counsel submitted that even if "super glue" will not fall under item 164(10) the department can demand tax at 12.5 per cent only from the date of the gazette notification, dated January 28, 2006. The amended clause (d) of Sub-section (1) of Section 6 vide Amendment Act 39 of 2005 was notified by the Government in the gazette only with effect from January 28, 2006.