TaxTMI 
TaxTMI 
2021 (1) TMI 926
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....trial Area, Mysore and a warehouse at Hebbal Industrial Area, Mysore. The appellant is engaged in the business of import and sale of certain specialty lubricants such as lubricating oils and grease which are both petroleum and synthetic based. The synthetic based lubricants are imported under Chapter 34 of the Customs Tariff Act, 1975 (hereinafter referred to as 'the 1975 Act' for short) whereas, petroleum based lubricants are imported under Chapter 37 of the 1975 Act. The appellant is also engaged in the business of manufacturing such products in the State of Karnataka and is producing raw materials such as base oils, additives, chemicals and packing materials either locally or through imports. Thus, the appellant undertakes two different business activities in relation to imported lubricants. One of the activities involves pure trading of lubricating oils and grease and the other one involves usage of imported base oil as raw materials for manufacture of lubricating oil and grease. 3. The appellant has been making payment of entry tax in respect of petroleum based lubricating oil in terms of Entry 67 of 3rd Schedule of Karnataka Tax on Entry of Goods Act, 1979 (hereinafter refer....
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.... of Assessment Year 2005-06 also, the Deputy Commissioner of Commercial Tax confirmed the demand of entry tax by an order dated 25.04.2012 to the extent of Rs. 7,34,01,764/- for the Assessment Year 2005-06. The rectification application filed by the appellant was also rejected vide order dated 28.10.2011. 4. The appellants thereupon filed appeals before the Joint Commissioner of Income Tax (Appeals) who by an order dated 12.09.2012 by placing reliance on subsequent clarifications issued by the government regarding entry 'petroleum products' and decision of the Supreme Court held entry tax was not leviable on goods brought into the local area for purpose of re-export outside the local area. It was further held that the demand of tax was unsustainable on purchase of synthetic based lubricating oil, which was a non notified commodity. The appellate authority also granted exemption on the purchase of lubricating oil into the State of Karnataka, which was subsequently re-exported outside the State by way of inter state sales or export sales by relying on the decision of the Supreme Court in 'ENTRY TAX OFFICER, BANGALORE & ORS. VS. CHANDANMAL CHAMPALAL AND CO. AND ORS. , (1994) 4 SCC 46....
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....in and the rates are specified by the State Government by Notification. It is also submitted that levy of entry tax on any product is contingent on fulfillment of two conditions firstly, product has to be specified n First Schedule and secondly, the same has also to be specified in the Notification issued by the State Government. Our attention has also been invited to Entry 67 as well as Entry 103 and the Notification dated 30.03.2002 issued under Section 3 of the 1979 Act providing for rate of tax for each of the goods specified in Entry 67. While inviting our attention to Entry 67 as well as Sl.No.1 of the Notification, it is pointed out that products mentioned therein are petroleum products and the products identified in Entry 67 and Sl.No.1 of the Notification are commonly such products which are classified under Chapter 27 of the 1975 Act. It is also urged that synthetic based lubricating oil classifiable under Section 34 of the 1975 Act is a distinct product from petroleum based lubricating oil classifiable under Chapter 27 of the 1975 Act and synthetic based lubricating oil not being a petroleum product is not covered under the impugned entry. It is also pointed out that the....
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....udice being caused to the revenue. In support of aforesaid submissions, reliance has been placed on decision of this court in 'STATE OF KARNATAKA VS. VASAVA DATTA CEMENTS, ILR 2004 KAR 3036. 10. It is also submitted that the issue with regard to taxability of base oil and grease under the Notification is squarely covered by judgment of the Supreme Court in Indian Aluminum Company supra, which has been followed by division bench of this court in Hyva India supra. It is also urged that in Hyva India, a division bench of this court while relying on Indian Aluminum Company supra has held that the use of words 'tar and others' after the terms specifically mentioned in Sl.No.1(viii) of Notification would refer to petroleum products other than those specifically mentioned in the entry and S.No.1 of the Notification. It is contended that non mentioning of specific product in the entry and Notification does not mean that the petroleum products is not taxable as the words used are 'tar and others'. 11. It is also urged that in the instant case also oil and grease which are admittedly petroleum products do not find specific mention neither in entry 67 nor in Sl.No.1 of the Notification. It....
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....pport of aforesaid submission, reliance has been placed on 'CARL BECHEM LUBRICANTS (INDIA) PVT. LTD. VS. STATE OF KARNTAKA AND ORS.', 2013 (76) KAR. LJ 374 (HC) (DB) I and decision of the Supreme Court in 'COLLECTOR OF C.EX. CALCUTTA VS. ALNOORI TOBACCO PRODUCTS', 2004 (170) E.L.T. 135 (SC). 14. We have considered the submissions made by learned counsel for the parties and have pursued the record. Section 3 of the 1979 Act is the charging Section, which mandates that there shall be levy and collection of tax on entry of any goods specified in First schedule into a local area for consumption, use or sale therein at such rates not exceeding 5% of the value of goods as may be specified retrospectively or prospectively by the State Government by a Notification. The aforesaid Section further provides that different dates on different rates may be specified in respect of different goods or different classes of goods or different local areas. First Schedule to the Act specifies the items or goods, on which tax is levied. Entry 11 of the Schedule applicable upto 30.04.1992 reads as under: Entry 11: All petroleum products, that is to say,' Petrol, diesel, crude oil, lubricating oil, ....
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....blished rule of interpretation of taxing statutes in words of Lord Simonds that subject is not to be taxed without clear words for that purpose and that every Act of Parliament must be read according to natural construction of its words. The aforesaid principle was referred to with approval by Supreme Court in 'MEMBER SECRETARY, ANDHRA PRADESH STATE BOA RD FOR PREVENTION AN!) CONTROL OF WATER POLLUTION VS. ANDHRA P.RADESH RAYONS LTD., AIR 1989 SC 611, 'SARASWATI SUGAR MILLS VS. HARYAFVA STATE BOARD, AIR 1992 SC 224, 'INDIA CINE AGENIES VS. COMMISSIONER OF INCOME TAX, MADRAS, (2008) 17 SCC 385, 'MAMTA SURGICAL COTTON INDUSTRIES, RAJASTHAN VS. ASSISTANT COMMISSIONER (ÀNTI EVASION), BHILWARA, RAJASTHAN. (2014) 4 SCC 87. It is equally well settled legal position that in a taxing Act, one has to look at merely what is clearly said. There is no rule for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing has to be read in, nothing is to be implied, one can only look fairly at the language used. [See: 'UNION OF INDIA VS. IND- SWIFT LABORATORIES LTD.', (2011) 4 SCC 635 AND 'BANSAL WIRE INDUSTRIES LTD. VS. STATE OF UTTAR PRADESH', (2011) 6 SCC 5....
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....al. It is equally well settled legal position, that court should not place reliance on a decision without discussing as to how the factual situation fits in with the fact situation of the decision, on which reliance is placed. [See: 'DELHI ADMINISTRATION (NCT OF DELHI) VS. MANOHAR LAL, AIR 2002 SC 3088 and 'HARYANA FINANCIAL CORPORATION VS. JAGADAMBA OIL MILLS', (2002) 3 SCC 496]. It is well settled in law that observations of the courts are neither to be read Euclid's theorems nor as provisions of a statute and should not be taken out of their context. The observations must be read in the context, in which they appear to have been stated. The Judges interpret statutes and they do n3t interpret judgments. [See: 'BHARAT PETROLEUM CORPORATION LTDD VS1 NRRIVÂIRAMANI, (2004) 8SCC 479). 22. The aforesaid words were referred to by Supreme Court in 'COLLECTOR OF CENTRAL EXCISE VS. ALLUPY TOBACCO PRODUCTS 2004 (170) E.L.T. 135 (SC) and it has been held that courts should not place reliance on the decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed and observations of the courts are neither to be re....