Commodity classification under VAT follows binding precedent, so emulsified bitumen was taxed at the lower rate.

Emulsified bitumen was treated as falling within the existing VAT entry rather than as an unclassified commodity, because the Court applied its earlier binding precedent on the same commodity classification issue. On that basis, the higher rate of tax was rejected and the lower rate under Entry 16, Schedule 2, Part II of the Madhya Pradesh VAT Act was applied. The governing principle stated is that once a commodity classification has been settled by precedent, the same classification must be applied consistently for sales tax and VAT levy.

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Issues: Whether emulsified bitumen is different and distinct from bitumen so as to be taxable at 12.5% as an unclassified item, or whether it falls within the entry attracting tax at 4% under the Madhya Pradesh VAT regime.

Analysis: The question was answered by following the earlier decision of the Court which had already held the same commodity issue in favour of the assessee. On that basis, the commodity was not treated as an unclassified item for the higher rate of tax.

Conclusion: Emulsified bitumen was held liable to tax at 4% under Entry 16, Schedule 2, Part II of the Madhya Pradesh VAT Act, and the challenge to the higher rate failed.

Final Conclusion: The appeal succeeded and the assessee obtained relief from the higher tax classification.

Ratio Decidendi: Where the classification of a commodity has already been determined by binding precedent, the same classification must be applied consistently for levy of sales tax or VAT.

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