Tax rate fixed by valid notification must be applied for the relevant period; higher levy on mobile phone chargers was unsustainable.

A taxing authority must apply the rate fixed by a valid government notification in force for the relevant period, and cannot levy tax at a higher rate on the basis of an inapposite precedent. Here, the notification reduced tax on mobile phone chargers to 5.5% from 01.04.2015, and the departmental circular reflected that position. The assessment levying tax at 14.5% for the post-notification period was based on a misreading of the issue and non-application of mind, so it was set aside to that extent and remitted for fresh reassessment at the notified rate.

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Issues: Whether, for the assessment period after 01.04.2015, mobile phone chargers could be subjected to tax at a rate higher than 5.5% despite the State Government notification reducing the rate.

Analysis: The notification issued under the taxing statute reduced the rate of tax on mobile phone chargers to 5.5% from 01.04.2015, and the departmental circular also reflected that position. The assessing authority was bound by the notification and could not ignore it by relying on a precedent dealing with a different question. The order levying tax at 14.5% was therefore based on a misreading of the issue and suffered from non-application of mind.

Conclusion: The levy at 14.5% could not be sustained for the post-notification period, and the assessee succeeded to that extent.

Final Conclusion: The impugned assessment was set aside only on the question of the applicable tax rate for the post-notification period, and the matter was sent back for fresh reassessment in accordance with the reduced rate notified by the State Government.

Ratio Decidendi: A taxing authority must apply the rate of tax fixed by a valid government notification in force for the relevant period and cannot levy tax at a higher rate on the basis of an inapposite precedent.

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