Classification of water purification plant and mandatory Form H proof governed reassessment and exemption under CST.

A classification decision for a water purification plant was found unsustainable because the assessing authority had not given a reasoned examination of the equipment's nature or technical features before departing from the clarification relied on by the taxpayer; the matter required fresh consideration. The exemption claim under the CST regime was treated as dependent on production of Form H, and exemption could not be granted without that declaration. The assessment was set aside and remitted for fresh adjudication with a personal hearing and consideration of the relevant materials, while the exemption issue was left open subject to production of Form H.

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Issues: (i) whether the classification adopted for the water purification plant was sustainable; (ii) whether exemption could be granted without production of Form H declaration.

Issue (i): whether the classification adopted for the water purification plant was sustainable.

Analysis: The classification was challenged on the ground that the product did not fall within the entry applied by the assessing authority. The order did not disclose a reasoned examination of the nature of the equipment or a proper basis for departing from the clarification relied on by the petitioner. Where the authority proposes to distinguish the product from an earlier clarification, it must examine the product and its technical features before recording a conclusion.

Conclusion: The classification adopted in the assessment order was held to be unsustainable and required fresh consideration.

Issue (ii): whether exemption could be granted without production of Form H declaration.

Analysis: The claim for exemption depended on production of Form H by the exporter. The record showed that the declaration had not been produced, and the Court treated such production as mandatory for availing the exemption.

Conclusion: Exemption could not be granted unless Form H declaration was produced.

Final Conclusion: The assessment order was set aside and the matter was remitted for fresh adjudication after affording personal hearing and consideration of the relevant materials, while the exemption claim was left open to be considered on production of Form H.

Ratio Decidendi: A classification determination must rest on a reasoned examination of the goods and relevant technical material, and exemption under the CST regime cannot be allowed without the mandatory Form H declaration.

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