M P AGENCIES Vs. STATE OF KERALA

JUDGEMENT

(1.) THIS is an appeal filed under Section 62 of the Kerala Value added Tax Act, 2003, hereinafter called the "act" against Annexure 5 order issued by the Commissioner of Commercial Taxes under Section 94 of the Act, clarifying rate of tax on the products distributed by the appellant by name "ujala Supreme" and "ujala Stiff and Shine". The products are manufactured by M/s. Jyothy Laboratories, and appellant is the wholesale distributor of the products in Kerala. While Ujala supreme is a fabric whitener, Ujala Stiff and Shine is a liquid fabric stiffner. The product samples produced by the appellant in bottles contain the description of the products as follows: ujala Supreme: Fabric Whitener-For Supreme Whiteness of Clothes. Ujala Stiff and Shine: Liquid Fabric Whitener for Crisp and Shining Clothes. When the appellant applied for clarification before the Commissioner of Commercial Taxes on the rate of tax applicable to the above two products, the Commissioner clarified that both the products would fall under Entry 27 of Notification, SRO 82/2006 dated 21. 1. 2006 issued under Section 6 (1) (d) of the Act, which is as follows:

(2.) AS already stated, Ujala Supreme is a product in liquid form sold in bottles for use as a fabric whitener. Appellant's main contention is that notification, namely, SRO 82/2006 issued under Section 6 (1) (d)of the Act cannot cover any goods specifically covered by Second or third Schedule to the Act, which attracts tax at the rate provided therein by virtue of Section 6 (1) (a) of the Act. We do not think there can be any dispute on this proposition, because Section 6 (1) (d) itself expressly gives authority to the State Government to issue notification providing for rate of tax at 12. 5 per cent only on goods not falling under clause (a) or (c) of Section 6 (1) of the Act. However, the question to be considered is whether the two items are covered by the specific entries of the Third Schedule claimed by the appellant. Since the items involved are different, though use is similar, we consider the items separately and serially hereunder.

(3.) UJALA Supreme: The appellant's claim is that the item falls under Entry 155 (8) (d) of the Third Schedule with HSN Code No. 3204. 12. 94, which covers "acid Violets". We have to therefore consider whether Ujala Supreme sold by the appellant is an "acid violet" falling under the said Entry and if so, it cannot be treated as covered by notification issued under Section 6 (1) (d) of the Act. Appellant's case is that Ujala Supreme is made by the manufacturer, namely, Jyothy Laboratories by just diluting Acid Violet Paste with water. They have produced test reports, Annexure 7 and 8, issued by sgs India Private Ltd. which show that on analysis of the product, namely, Ujala Supreme, the presence of AV49, that is Acid Violet paste, is only less than one per cent and balance 99% (exactly 99. 01) is water. Annexure 9 is the test report of Acid Violet Paste and Ujala supreme obtained by the appellant from the Institute of Chemical technology, Matunga, Mumbai, wherein they have stated as follows: the acid violet paste (referred as "avp" hereafter) supplied to us confirms to Acid Violet 49, a synthetic dye classified into acid dye class which is used for the colouration of silk/wool at elevated temperatures in the presence of acid. "avp" is uniform and having standard strength which is formulated and prepared as ready for use. The "avp" as well as "ujala" purchased from the market are subjected to instrumental analysis HPTLC (High Performance Think layer Chromatography) and the results are observed as below: