JOGINDER SINGH Vs. STATE OF JHARKHAND & ORS.

JUDGEMENT

(1.) Heard Mr. J.C. Gaur, the learned counsel appearing for the petitioner. Also heard Mr. S. Saikia, the learned standing counsel for the Finance (Taxation) Department, appearing for the respondent Nos. 1-4. But none appears for the M/s. Nilachal Chemical (P) Ltd. (respondent No. 5), who were impleaded on 7.1.2015.

(2.) The petitioner produces Sodium Silicate which is used as an ingredient in manufacture of soap, detergent, cement and other such products. They claim that Sodium Silicate should be subjected to tax @4% under the Assam Value Added Tax Act, 2003 (hereinafter referred to as the 'the VAT Act'), by treating it as industrial input under Part-'C' of IInd Schedule of the VAT Act. With such contention, the petitioner challenges the order dated 5.1.2006 (Annexure-C), whereby the Commissioner of Taxes, on the application of the Nilachal Chemical (P) Ltd. (respondent No. 5) noted that Sodium Silicate is an unspecified item, which is not covered by any of the 168 entries of the IInd Schedule and hence as a residuary item, is covered by the Vth Schedule of the VAT Act and therefore the product is liable to be taxed @12.5%.

(3.) When the VAT Act was introduced w.e.f. 1st May, 2005, the Sodium Silicate manufacturers found that their product is not included amongst the numerous items of the industrial inputs category, specified in Part-'C' of IInd Schedule of the VAT Act. Therefore under the umbrella of the All Assam Sodium Silicate Manufacturer's Association, the representation was made on 6.6.2005 (Annexure-A), to the Commissioner of Taxes for inclusion of the product, to make it taxable at the lower rate. The Association contended that Sodium Silicate is covered by sub entry 2839.10, under the Entry 28.05 of the Central Excise Tariff Act, 1985 (hereinafter referred to as the 'the C.E. Tariff Act') and since the entries under the Central Act is made the basis for inclusion of the items in the IInd Schedule of the State Act, the manufacturers requested for inclusion of Sodium Silicate as an industrial input, under the Part-'C' of IInd Schedule of the VAT Act. The ingredients of Sodium Silicate were mentioned and reference was also made that this product used mainly as an ingredient by the soap manufacturers, is charged to tax @4% in the neighbouring States of West Bengal and Bihar. Therefore the Commissioner was requested to clarify under which entry, the product Sodium Silicate is to be taxed, under the VAT Act.