COMMISSIONER OF COMMERCIAL TAX Vs. MODERN AGENCY

JUDGEMENT

(1.) THE decision rendered in this reference shall govern disposal of other connected reference being M. C. C. No. 567 of 1998, because both these references arise between the same parties and involve common questions of law to be answered by this Court.

(2.) THIS is a sales tax reference made at the instance of Revenue, i. e. , Commissioner of Sales Tax (now referred to as Commissioner of Commercial Tax) Under Section 44 (1) of the M. P. General Sales Tax Act, 1958 (since repealed) and replaced by the M. P. Commercial Tax Act, 1994 by the Board of Revenue in reference case Nos. 39 and 40-1/96, dated March 14, 1998 which arises out of an order dated April 23, 1996, passed by Board in Appeal No. 7-2/s/525/ 94 and 7-2/s/191/95 to answer following question of law said to arise out of the aforesaid appellate orders passed by Board: Whether under the facts and circumstances of the case, the A Tribunal was justified in holding that Fevicol MR and Fevicryl acrylic colours are items of stationery and as such taxable under entry 21 of Part IV of Schedule II ?

(3.) THE respondent is a dealer engaged in the business of sale of goods such as talcum powder, fevicol, poster colours, gum tube, B liquid soap, etc. For the period April 1, 1989 to March 31, 1990 and April 1, 1991 to March 31, 1992 the dispute arose before the taxing authorities (assessing authority) in relation to two items (i) Fevicryl acrylic colours and (ii) Fevicol MR" The dispute was as to under which entry these two items, Will fall and secondly, what is the rate c of tax which is applicable to these two items. According to dealer, i. e. , respondent herein, Fevicryl acrylic colour items falls in the category of stationery article and hence liable to be taxed as stationery articles under entry 21 of Part IV of Schedule II at the rate of 6 per cent whereas the case of Revenue for this item was that it falls in entry 20 of Part II of Schedule II and hence, liable to be taxed at the rate of 16 per cent as paints. So far as other item, i. e. , "fevicol MR" (synthetic gum) is concerned, according to dealer it also falls in entry 21 of Part IV of Schedule II and hence, liable to be taxed at the rate of 6 per cent whereas according to Revenue it falls in entry 20 of Part II of Schedule II and after September 20, 1990 it falls in newly amended entry 84 of Part III.