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of <h1>Court rules soda maker taxable at 5%, clarifies tax authority's independence.</h1> The Court affirmed that a 'soda maker' is not a plastic product and should be taxed as an unclassified item at 5%. Reassessment based on an ... - Issues:1. Classification of 'soda maker' for tax purposes under the Kerala General Sales Tax Act, 1963.2. Validity of reassessment based on a Government order issued under section 59A of the Act.3. Interpretation of the statutory provisions by the taxing authorities in light of Government clarifications/circulars.4. Assessment of tax liability based on the nature of the product.Analysis:1. The case involved a dispute regarding the classification of 'soda maker' for tax assessment purposes. The assessing officer, first appellate authority, and the Tribunal concluded that a soda maker is not a plastic product and, lacking a specific entry in the Act, should be taxed as an unclassified item at a rate of 5 per cent. The Tribunal specifically noted the presence of a metallic gas cylinder in the soda maker, leading to the determination that it does not qualify as a plastic product. The Court agreed with this assessment, affirming that the soda maker cannot be considered an article made entirely of plastic.2. The reassessment of tax liability was challenged by the assessee, arguing that it was based on a Government order issued under section 59A of the Act, which had been previously held unconstitutional and violative of article 14 of the Constitution. The Court referenced previous judgments on the matter, emphasizing that actions taken pursuant to the invalidated provision were unsustainable. Upon examination of the original records, it was found that the Government order dated April 16, 1988, was not the foundation for initiating the reassessment, as the notices issued and the assessment orders did not reference this order. The Court dismissed the argument that the reassessment was based on the unconstitutional provision.3. The interpretation of statutory provisions by the taxing authorities in light of Government clarifications and circulars was also a point of contention. The Court clarified that such clarifications and circulars, while communicated to dealers, do not bind the quasi-judicial functioning of the authorities under the Act. The authorities are bound by law, not administrative instructions, opinions, or circulars. The Court highlighted that the understanding of the Government, whether favorable or unfavorable to the assessee, is merely an opinion and does not dictate the legal interpretation by the authorities. The Court referenced precedents to support this position.4. Ultimately, the Court dismissed the revision applications, affirming the Tribunal's conclusion that the soda maker is not a plastic product and should be taxed as an unclassified item at a rate of 5 per cent. The Court found no merit in the applications and upheld the decision regarding the tax liability of the assessee based on the nature of the product.In conclusion, the Court's judgment clarified the classification of the soda maker for tax purposes, addressed the validity of reassessment based on an unconstitutional provision, discussed the interpretation of statutory provisions in light of Government clarifications, and determined the tax liability based on the nature of the product, ultimately dismissing the revision applications.
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