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of <h1>High Court Upholds Tax Classification for HDPE Woven Sacks</h1> The High Court determined that the product sold by the petitioner was classified as HDPE woven sacks under Entry-136 in the OST Rate Chart, subject to an ... Classification of goods - rate of tax - HDPE Bags or HDPE Woven Sacks - exigible to tax @ 4% or 8% respectively or not? - to be classified under Entry-129 of List-C of the OST Rate Chart - HELD THAT:- Entry 136 specifically talks of HDPE woven sacks. Merely because the last portion of Entry No.136 states 'and other plastic goods except those specified elsewhere in this notification', it would not exclude HDPE woven bags and HDPE woven sacks from Entry 136 - What is included in Entry No.129 is HDPE bags and as held by this Court in State of Orissa v. M/s Auro Plastics [2015 (9) TMI 1456 - ORISSA HIGH COURT], HDPE bags and HDPE woven sacks are not the same product. With there being no doubt that what was sold by the Petitioner was HDPE woven sacks, which is clearly specified as such in Entry 136, there is no scope to bring it within the ambit of Entry 129. There is no scope therefore for applying the rule of 'purposive construction'. Here we are concerned with a taxing statute where the principle of ‘strict construction’ has to be applied. In Hansraj Gordhandas v H. H. Dave, Assistant Collector [1968 (9) TMI 112 - SUPREME COURT], the Supreme Court explained: “It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words.” In the case on hand, there is no ambiguity whatsoever as regards the products included in Entry 129 or Entry 136. Equally, there is no ambiguity that the product sold by the Petitioner is HDPE woven sacks which is included as such in Entry 136 - The commodity sold by the Petitioner for the period in question, is HDPE woven sacks and it is exigible to tax at 8%. The impugned order of the Tribunal and the consequent fresh assessment order of the Assessing Officer dated 23rd November 2020 do not call for any interference - Revision petition disposed off. Issues:Classification of product for tax purposes - HDPE Bags or HDPE Woven Sacks; Interpretation of relevant entries in the OST Rate Chart.Detailed Analysis:Issue 1: Classification of product for tax purposes - HDPE Bags or HDPE Woven Sacks- The petitioner, engaged in manufacturing HDPE/PP woven fabrics, bags, sacks, and tapes, filed sales tax return for the period 2003-04 declaring GTO and TTO.- Dispute arose whether the product sold by the petitioner should be taxed at 4% or 8%.- Petitioner claimed product should be classified under Entry-129 for packing materials taxed at 4%, while the State argued for Entry-136 taxed at 8%.- STO issued notice under OST Act and assessed GTO and TTO at higher amounts, levying tax at 8%.- Petitioner appealed to JCST, which partly allowed the appeal, reducing the enhancement but upheld the tax rate at 4%.- Appeals were filed by both parties before the Tribunal, which remanded the matter to the DCST for fresh assessment.- DCST passed a fresh assessment order raising a tax demand of &8377; 16,13,968/-.- The High Court considered submissions from both parties and analyzed the product description and relevant entries in the OST Rate Chart.- High Court found no ambiguity in the product description and concluded that the product sold by the petitioner was HDPE woven sacks, falling under Entry-136 taxed at 8%.- Court cited previous judgments emphasizing strict construction in taxing statutes and ruled in favor of the State's classification.- The Court upheld the Tribunal's decision and the fresh assessment order by the DCST, disposing of the revision petition with no costs.Issue 2: Interpretation of relevant entries in the OST Rate Chart- The Court analyzed the specific entries in the OST Rate Chart, distinguishing between HDPE bags and HDPE woven sacks.- Emphasized the importance of clear meaning in taxing statutes and cited relevant case laws to support the principle of strict construction.- Reiterated that in cases of tax exemption interpretation, the benefit of doubt should go to the revenue.- Concluded that there was no ambiguity in the classification of the product under Entry-136 as HDPE woven sacks, subject to 8% tax.- Answered the question framed by the Court in favor of the State's classification.- Directed parties to utilize the order available on the High Court's website due to COVID-19 restrictions.This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, the Court's interpretation of relevant legal provisions, and the final decision rendered by the High Court.
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