TaxTMI 
TaxTMI 
2008 (3) TMI 636
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....en manufacturing and marketing household insecticides under licence obtained under the Insecticides Act, 1968 and Rules, 1971. The appellant has been selling mosquito repellents manufactured by the said company. The appellant-firm filed its monthly returns for the months from April 2006 to October 2006. Thereafter, in order to ascertain the correctness or otherwise of the said returns, the department audited its books of account. During the said audit, the department noticed that for the said months the assessee-firm had collected and paid output tax on the sale of mosquito repellents and also petroleum jelly (vaseline) at the rate of four per cent, though the same were liable to be taxed at 12.5 per cent as they were not listed in Schedule III annexed to the KVAT Act. (b) Therefore, the assessing authority issued to the assessee notices under section 39 of the KVAT Act (vide annexures B and B1 to B6) proposing to tax the turnover of the sales of mosquito repellents and petroleum jelly (vaseline) at 12.5 per cent. In response to the said notices, the appellant-assessee submitted its reply stating that the mosquito repellent being insecticide comes within the purview of entry 23 ....
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.... writ petition. It is observed by the Division Bench of this court at para 13 in the said case as under: ". . . Merely because, the proviso given to sub-section (1) of section 3A of the Act, prohibits the Commissioner to give any instructions which interferes with the power of the appellate authority, in our view, it is not possible to even remotely think that the concerned authorities will go against the instructions given by the Commissioner in circular, annexure D, and give scope for any disciplinary proceedings against them. It is necessary to point out that going against the instructions would result in revenue loss to the State, and therefore, no officer can afford, apart from the fact that he is obliged under section 3A(1) of the Act to carry out the instructions of the Commissioner, to go against the instructions of the Commissioner, which may attract disciplinary proceedings resulting in his removal from service. Under these circumstances, in the light of the clear unequivocal instructions/directions given by the Commissioner as stated above, in my view, filing objections before the appellate authorities would be an empty formality. Such a remedy available to the assesse....
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....in declining to interfere with the orders impugned in the writ petition, for the reason that the appellant has got an alternative remedy of appeal, we now have to examine the legality or otherwise of the said orders. Sri Indra Kumar, the learned Senior Counsel appearing for the appellant, strongly contended that the mosquito repellent has been manufactured by the said company by obtaining the licence under the provisions of the Insecticides Act, 1968, and they contain the chemical "allethrin", which is defined as insecticide under clause 3(e) of the Insecticides Act, 1968 and further, insecticides are included in entry 23 of the Third Schedule to the KVAT Act and therefore, the assessing authority was not justified in levying the tax on the sales turnover of mosquito repellents at 12.5 per cent, instead of taxing the same at four per cent only as provided under section 4(1)(a)(ii) of the KVAT Act. Per contra, Sri Gangadhar Sangolli, learned AGA contended that the goods listed under entry 23 of the said Schedule are mainly used for agricultural purposes and therefore, mosquito repellent though could be termed as insecticide could not be held to come within the purview of entry 23 o....
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....ction 3(e) of the Insecticides Act, 1968. It is not in dispute that mosquito repellent contains the chemical allethrin, as one of its constituents and as such, it is an insecticide. Therefore, on combined reading of the above provisions, it is clear that since allethrin is a constituent chemical in mosquito repellent, it comes within the definition of "insecticide" and insecticide finds place in entry 23 of the Third Schedule annexed to the KVAT Act without any further qualification as to its kind. Whether an insecticide is used in agricultural operations for the purpose of killing the insects that attack the agricultural crops or it is used for killing domestic insects, the fact remains that all kinds of insecticides fall within entry 23 of the Schedule annexed to the KVAT Act. Therefore, undoubtedly the mosquito repellent being insecticide falls within entry 23 of the said Schedule. Sri Indra Kumar, the learned Senior Counsel appearing for the appellant, has relied upon the decisions of the Madras and Kerala High Courts in Transelektra Domestic Products Pvt. Ltd. v. Commercial Tax Officer, Porur Assessment Circle, Madras reported in [1993] 90 STC 436 and Transelektra Domestic P....