High Court · 2012

We have heard learned counsel for the parties. The Commissioner in impugned order observed -

5. (cid:28) & & &. In the present case, the plastic polymers or resins are processed from b asic petro chemical and are used in further manufacture of plastic pipes, tanks etc. by the disputant dealer or other such dealers. Therefore, indisputably, suc h items fall into description of ’Chemicals’ covered by clause (b) above. We may also advert to the following dictionary meanings of the term ’Chemical’. & & & There is no dispute that the substances namely PVC granules, resins or L LDP forming the subject matter of dispute are obtained from the chemical process applied to petrochemical. Even the trading of the item in question take place in markets recognize d as chemical markets by the dealers manufacturers. As regard reference to the C entral Excise Tariff Schedule, it is found that many items like bentonite powder , lime stone, etc. which have been judicially held to be ’chemical’ are not enum erated in chapters 28 & 29 but in separate chapter 25. (cid:29)

6. Learned counsel for the petitioners submit that under Section 2(2) of th e Act, all expressions not defined under the Act will have the same meaning as i n Assam Value Added Tax Act, 2003 and, therefore, expression ’chemical’ should b e treated as per definition in the Assam Value Added Tax Act. This contention ca nnot be accepted. Entry in the schedule is not an expression used under the Act which may call for interpretation. Entry in the schedule has to be interpreted a s per established principles for interpretation of the same and are not normally subject matter of (cid:28)definition (cid:29) clause in an Act.

7. It is next submitted that under the Central Excise (Tariff) Act, 1985, p lastic material was not treated as ’chemicals’. This contention can also not be accepted. Under the different taxing statutes, there can be different scheme of taxing same goods. The fact that plastic material was not ’chemical’ under the C entral Excise Act, cannot be a ground to follow the same pattern for the present statute.

8. It is lastly submitted that applying the common parlance test and the us er test, PVC Granules and PVC Resin may not be covered by the entry ’chemicals (cid:29) as the expression (cid:28)chemicals (cid:29) may include such items as may be used for chemical reaction or chemical effect. Even though no evidence has been led to prove that chemicals in common parlance exclude PVC granules and PVC resins, it is submitt ed that it may be possible to lead such evidence. It is submitted that all produ cts in which chemicals are used may not be classified as (cid:28)chemicals (cid:29). In support of this submission, reliance has been placed on a judgment of the Hon’ble Supre me Court in Mauri Estate India Private Limited -Vs.- State of Uttar Pradesh and another (2008) 5 SCC 680. Reliance has also been placed on a judgment of the Hon ’ble Supreme Court in Chemical and Fibres of India Ltd. -Vs.- Union of India and others (1997) 2 SCC 664 to the effect that distinction may be made between the material used in the production of plastic and the plastic and all goods in whic h plastics were used may not be treated as ’plastics’. Similarly, it is submitte d that all goods in which chemicals is used may not be chemicals.

9. Learned counsel for the State does not dispute that the principles relie d upon on behalf of the petitioners for interpretation of the expression ’chemic als’ by applying the common parlance test and the user test have not been applie d in the impugned order presumably because this submission did not appear to hav e been made. In these circumstances, learned counsel for the Revenue submits tha t the view of the Commissioner may not be treated as conclusive and matter be in dependently gone into by the concerned authorities without being influenced by t he view of the Commissioner.

10. Since the question whether the expression (cid:28)chemicals (cid:29) will include PVC g ranules and PVC resin is primarily a question of fact, without expressing any op inion on merits, on the contention raised on behalf of the petitioners, we consi der it appropriate to direct that the said question may be gone into by the conc erned authority in appropriate proceedings, independently of the view of the Com missioner. Since in some cases remedy of appeal/revision is available, the petit ioners will be at liberty to take their remedies accordingly. It is made clear t hat if limitation for filing an appeal/revision has expired, the petitioners wil l be allowed to file such appeal or revision within one month from today. We are informed that during the pendency of these petitions, notificatio 11. n dated 11th July, 2011 has been issued by the State of Assam exempting entry ta x on entry of PVC Resins, LLDPE and PVC granules for use as raw materials in man ufacture of plastic items for the period from 28.2.2005 to 8.12.2009. We leave i t open to the concerned petitioners to claim the benefit of the said notificatio n for the period in question in appropriate proceedings.

12. The writ petitions will stand disposed of accordingly.