TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 258
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.... are reflective in nature making them visible at night also. The petitioner has been declaring the product as falling under entry 42A of II Schedule to the Gujarat Value Added Tax Act, 2003 ('the VAT Act' for short), which entry pertains to "Industrial Inputs or Agricultural Inputs as may be specified by the State Government by notification in the Official Gazette." This entry carries tax liability of 4% plus 1% additional duty i.e. total 5% of tax. The petitioner relies on Government Notification dated 31.03.2006 specifying various goods mentioned in the schedule appended to the Notification as "Industrial Input" for the purpose of entry 42A. Item 145 thereof is "rosin and resin acids and derivatives thereof; rosin spirit and rosin oils; run gums." This entry is under heading No.38.06. 3. The petitioner has been filing tax returns accordingly, and we are informed that for the past two years such declarations were also accepted by the VAT authorities. However, the authorities are holding a prima facie belief that the product that the petitioner deals in does not fall under entry 145 of the said notification and correspondingly it cannot be classified as "industrial input" ....
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....erest of the revenue, it is necessary to place the properties of the petitioner under provisional attachment. 5. It appears that subsequently the petitioner provided a Bank Guarantee to the tune of Rs. 1.82 crores, in lieu of which, the authority lifted the orders of attachment. 6. Learned counsel Shri Soparkar vehemently contended that the Commercial Tax Officer has no power under Section 45 of the VAT Act to impose any such attachment. The product is correctly classified under entry 42A. Counsel took us to the various documents on record to contend that the classification as declared by the petitioner is correct. He submitted that the State authorities are labouring under a mistaken belief in law and facts. At a stage where such issues are yet to be gone into by the assessing authority, order of attachment cannot be passed. He submitted that the petitioner has a strong prima facie case to contend that the product falls under entry 42A of the II Schedule. 7. On the other hand, learned AGP Shri Jaimin Gandhi opposed the petition contending that the petitioner has alternative remedy of appeal. The department has sufficient material to prima facie demonstrate that the product does....
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....rther appeals, typically first before the Commissioner and thereafter before the VAT Tribunal and the High Court. At all such appellate stages there are powers for granting stay or waiving requirement of pre deposit if statute so provides. Therefore, to contend that mere pendency of assessment or reassessment proceedings would clothe the authority to pass order of provisional attachment would be wrong. Pendency of such proceedings would be a pre requirement for exercising such powers. But the additional requirement would be that it is necessary to do so to protect the interest of revenue. 9. While, therefore, not accepting the contention of the counsel for the petitioner of total lack of power of the authority to pass order of provisional attachment, we must examine whether in the present case, such powers could have been exercised. We are conscious that such powers are in the discretionary nature, and as long as such discretion is exercised bona fide, and that sufficient material is available on record permitting exercise of such discretion, the Court would not ordinarily interfere in such orders. However, when the nature of power is drastic, the Court's scrutiny in the suffi....
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.... may be, tariff item, is shown as "other", then interpretation as provided in Note 2 shall apply." 11. In short, as per these notes, unless anything there is inconsistent under the notification with respect to any commodity, the description of such commodity for the purpose of central excise would be accepted. We notice that the same product "rosin and resin acids and derivatives thereof; rosin spirit and rosin oils; run gums" is classified under entry 38.06 under Central Excise Tariff Act. We notice that the manufacturer from whom the petitioner procures such product, classifies the product for the purpose of central excise under entry 38069090. This is also the classification and description, the petitioner's invoices contained. 12. Thus, there is sufficient material for the petitioner to contend prima facie that its declaration of the product falling under entry 42A of the II Schedule is correct. The tax already collected is sufficient to meet with the petitioner's tax liability. 13. The respondents have raised three fold objections, such objections are yet to be gone into. The petitioner's opposition to the points raised by the Department would require a detailed....