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of <h1>High Court affirms Tribunal's classification of Harpic and Lizol as insecticides, subject to 4%/5% tax rate</h1> <h3>The Commissioner, Commercial Tax Versus M/s Racket Backizer India Ltd.</h3> The Commissioner, Commercial Tax Versus M/s Racket Backizer India Ltd. - [2019] 60 G S.T.R. 199 (All), 2018 (19) G. S. T. L. 596 (All.) Issues Involved:1. Classification of Harpic and Lizol under the UP VAT Act.2. Determination of applicable tax rate for Harpic and Lizol.3. Validity of the Tribunal's decision to classify Harpic and Lizol as insecticides/pesticides.4. Consideration of judgments from other High Courts and the Supreme Court regarding similar issues.Detailed Analysis:1. Classification of Harpic and Lizol under the UP VAT Act:The core issue in the case was whether Harpic and Lizol should be classified under Entry 20 of Part-A of Schedule II of the UP VAT Act as insecticides/pesticides, subject to VAT at 4%/5%, or under the residual entry in Schedule V, subject to VAT at 12.5%.The Tribunal, in its impugned order, classified Harpic and Lizol under Entry 20, Part-A of Schedule II to the UP VAT Act, which includes 'Chemical fertilizers, micro-nutrients, plant growth promoters and regulators, herbicides, rodenticide, insecticide, weedicide and pesticides.'2. Determination of applicable tax rate for Harpic and Lizol:The Assessing Authority initially treated Harpic and Lizol as unclassified items, imposing a tax rate of 12.5%. This was upheld by the Additional Commissioner (Appeals). However, the Tribunal reversed this decision, classifying the products under Entry 20 and applying a tax rate of 4%/5%.3. Validity of the Tribunal's decision to classify Harpic and Lizol as insecticides/pesticides:The Tribunal's decision was supported by multiple legal precedents and expert opinions. The Supreme Court in Bombay Chemicals Pvt. Ltd. v. Collector of Central Excise (1995) held that disinfectants could be classified as insecticides/pesticides. The Tribunal also considered test reports certifying that Harpic and Lizol kill germs, supporting their classification as disinfectants.4. Consideration of judgments from other High Courts and the Supreme Court regarding similar issues:The Tribunal relied on judgments from the Andhra Pradesh High Court, Gauhati High Court, and Rajasthan High Court, which had classified Harpic and Lizol as insecticides/pesticides under their respective VAT laws. The Supreme Court dismissed the SLP against the Rajasthan High Court's decision, further strengthening the Tribunal's stance.Conclusion:The High Court upheld the Tribunal's decision, dismissing the revision petition filed by the department. It concluded that Harpic and Lizol are covered under Schedule-II, Part A, Entry No. 20 of the UP VAT Act, classifying them as insecticides/pesticides and subject to a tax rate of 4%/5%. The High Court found no error in the Tribunal's judgment and emphasized that the classification was consistent with legal precedents and expert opinions.
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