PIDILITE INDUSTRIES LTD. Vs. COMMISSIONER OF COMMERCIAL TAX

JUDGEMENT

(1.) The present writ petition has been filed by the petitioner under Article 226 of the Constitution of India assailing the legality, validity and propriety of the order dtd. 31/8/2010 passed by the Commissioner of Commercial Tax, Madhya Pradesh, Indore whereby the petitioners product "Steel Grip Insulating Tape" has been classified under the residuary entry in Entry No.1 of Part IV of Schedule II of the Madhya Pradesh Value Added Tax Act, 2002 (herein after referred as "the MP VAT Act") attracting a higher rate of tax and has also challenged the consequential assessment notices issued thereafter by the respondent authorities for recovery of differential tax.

(2.) The petitioner is a public limited company incorporated under the provisions of the Companies Act, 1956 engaged in the business of manufacture and sale of a variety of consumer products and speciality chemicals. It operates multiple manufacturing units in the States of Maharashtra, Gujarat, Daman and Himachal Pradesh.

(3.) Shri P.M. Choudhary, Learned Senior Counsel appearing for the petitioner submitted that the impugned determination order is unsustainable as it is based on an erroneous understanding of the nature and use of the commodity in question i.e. Steel Grip Insulating Tape. The product is solely designed and used as an insulator to prevent the flow of electrical current and to protect against electric shock, and thus ought to have been classified under the specific entry applicable to "insulators" carrying a lower rate of tax rather than under the residuary entry attracting a higher rate.