Plastic raw material classification upheld for Nylon-6 under the sales tax schedule, with prior clarification treated as binding

Polyamide (Nylon-6) was treated as a plastic raw material falling within Entry 51 in Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, because the Tribunal accepted its character as such and the earlier clarification under Section 28A was regarded as binding on the department until withdrawn. The Court found no manifest illegality in that reasoning and held that the commodity was correctly classified under the relevant entry at the material time, attracting tax at 4%. The higher levy was therefore not sustained.

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Issues: Whether polyamide (Nylon-6) was correctly classified as a plastic raw material falling under Entry 51 in Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, and whether the clarification issued under Section 28A of that Act could be applied to the assessment in question.

Analysis: The Tribunal had examined the nature of the commodity and accepted the assessee's case that polyamide-Nylon 6 was a plastic raw material. It also treated the earlier clarification in favour of the assessee as binding on the department until withdrawn. The Court found no manifest illegality in that reasoning and agreed that the commodity fell within Entry 51 in Part B of the First Schedule at the relevant time, attracting tax at 4%.

Conclusion: The classification in favour of the assessee was upheld and the higher levy was not sustained.

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