V.C MATHEW Vs. THE STATE OF KERALA

JUDGEMENT

(1.) These writ petitions give rise to a common issue and hence heard and decided together.

(2.) Petitioners used to purchase timber and firewood from the depots of forest department. The depot officers were charging Value Added Tax (VAT) on firewood at the rate of 5%. Subsequently, they started charging tax at 14.5%. It is challenging the higher rate of tax that the above writ petitions are filed.

(3.) According to the petitioners, as per the Third Schedule to the Kerala Value Added Tax Act, 2003 (hereinafter referred to as the Act), rate of tax prescribed for firewood is only 5%. There is no other entry in the Act prescribing a different rate on firewood. Petitioners approached the 4th respondent, Divisional Forest Officer seeking for appropriate clarification in the matter. The 4th respondent replied as per Ext.P2 letter (produced in WP(C) No. 7952/2014) and Ext.P3 Circular issued by the Principal Chief Conservator of Forests wherein it is stated that tax on firewood and billets is at the rate of 14.5%. Petitioners also produced a reply from the Commissioner of Commercial Taxes as Ext.P5 in answer to a query under the Right to Information Act. In the said reply, it was stated that firewood is taxable @ 12.5 %. It is stated that Entry 47 of the Third Schedule prescribes firewood but the HSN Codes given in the Entry do not mention HSN Codes 4401.10, 4400.10.10 which covers fuel wood in billets, twigs and faggots. Therefore, according to the Commissioner, twigs and billets used as firewood are taxable @ 12.5%. Petitioner therefore contends that Ext.P3 Circular of the Principal Chief Conservator of Forests is not sustainable which is contrary to the clarification issued by the Commissioner of Commercial Taxes as per letter dated 5/6/2010 (Ext.P5).