TaxTMI 
TaxTMI 
2024 (1) TMI 240
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....llant in relation to classification of the coconut oil sold by the appellant and a bi-monthly publication namely 'Amagram'. 4. It was the case of the appellant that the coconut oil, being sold by it, was rightly classified under Entry No. 25 of the Third Schedule appended to DVAT Act as 'Edible Oils and Oil cake', whereas as per the Revenue, the same is to be classified as a residuary item under Section 4(1)(e) of the DVAT Act. 5. The appellant had also agitated that its bi-monthly publication namely 'Amagram' is to be classified as a periodical within the meaning of Entry No. 5 of the First Schedule appended to DVAT Act. 6. However, the Tribunal has held that the same falls under Entry No. 52 of the Third Schedule of the DVAT Act. For the ease of reference, the classification sought by the appellant and by the Revenue, is reproduced as under: PRODUCT CLASSIFICATION BY THE APPELLANT CLASSIFICATION BY THE RESPONDENT COCONUT OIL Entry No. 25 (Third Schedule): Edible Oils and Oil cake Residuary Entry AMAGRAM Entry No. 5 (First Schedule): Books, periodicals and journals including maps, charts and globes Entry No. 52 (Third Schedule): Printed material including diary, cale....
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....d Additional Commissioner also found Amagram to be a catalogue and taxable at 5%. This was predicated on the finding that any "periodical" in the nature of a "catalogue" would be covered in Entry No. 52 of Third Schedule of the DVAT Act as per the clarifications in Circular No. 2 of 2005-06. The learned Additional Commissioner also observed that Coconut Oil and Olive Pomace Oil could not be treated as edible oils by virtue of them being prominently used and sold for cosmetic purpose. The learned Additional Commissioner observed that the said oils were sold in small quantities and packaging and not in big containers as used for sale of edible oils. It was found that the VAT Officer had made a technical mistake by assessing Central Sales under the provisions of the DVAT Act, therefore, the learned Additional Commissioner remanded the matter to the said officer for appropriate directions. 12. The appellant appealed the order dated 08.01.2018 before the learned DVAT Tribunal. The learned DVAT Tribunal by the impugned judgment upheld the order of the learned Additional Commissioner, OHA, to the extent of taxability of Amagram periodicals at 5% and Coconut Oil at 12.5%. The learned DVAT....
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.... 20. He relied upon the judgment of the Hon'ble Apex Court in the case of Commercial Tax Officer v. Binani Cements Ltd. and Another: (2014) 8 SCC 319, to contend that if a statute contains both a general provision as well as specific provisions, the latter must prevail. 21. He further submitted that in a taxation statute, a strict rule of construction has to be applied, which involves literal or plain meaning test. He contended that nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute. 22. He, thus, submitted that since Entry No. 5 specifically mentions periodicals, Amagram, being a periodical, cannot be classified in the general Entry No. 52 as a printed material. 23. He further submitted that plain reading of Entry No. 5 of First Schedule suggests that it includes all types of books, journals and periodicals and is not restrictive to exclude the periodicals, which may be of commercial use and useful only to a particular section of people. 24. He submitted that wherever the Legislature wanted to give restrictive meaning to an entry, the same is clearly mentioned in the entry itself. 25. The learned Ad....
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....er purposes, cannot be a ground to not classify the same as an edible oil when admittedly the product is a pure coconut oil and is edible. The only test, which requires to be fulfilled for a product to fall in the category of edible oil, is whether the same can be used for edible purposes. The entry is not based upon the usage of the product but on the component of the product. 33. He vehemently contended that the appellant has not claimed that the product should be used for cooking purposes but the argument had always been that the product is edible oil. He relied upon the judgment passed by the Hon'ble Apex Court in the case of Mukesh Kumar Aggarwal & Co. v. State of M.P. : 1988 Supp SCC 232, where it was held that the user test is logical but is also inconclusive and a particular use of an article in the hands of one consumer is not determinative of the nature of the goods. 34. He, therefore, submitted that the coconut oil is a multi-purpose article and is admittedly used as a cooking medium by many households. The product sold by the appellant is labelled as a food grade item in its packaging. He also referred to the declaration on the pack of the product, which describes it ....
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....ducts referred in the First Schedule are exempted from any tax. Entry No. 5 of the First Schedule, as referred above, includes books, periodicals and journals including maps, charts and globes. Other printed material includes calendar and, as clarified in Circular dated 26.04.2005, also includes paper envelopes, diaries, calendars, race cards, catalogues, greeting cards, etc. 44. Clearly, the benefit has been given by the Legislature to goods mentioned in the First Schedule and they are exempted from tax. The dispute, therefore, is whether the product, which is called by the appellant as a periodical and referred as a catalogue by the Revenue, is entitled to exemption and is classified under Entry No. 5 of the First Schedule. 45. The argument of the appellant that the product Amagram is a periodical since it is published periodically, and is a book having collection of number of leaves or sheets or paper, is not persuasive. Even though the product is published periodically, but from the bare glance, the same in the nature of a catalogue, containing list of goods that can be bought from Amway. Though it contains other information like upcoming training schedules, achievement level....
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....ral meanings; in its wider sense it means a writing and a collection of sheets of paper, blank, written or printed, strung or bound together and a diary would come within this meaning. In the restricted sense it means that which we may read and find instructions or lessons, a literary composition. A diary would not come within this restricted meaning because primarily it is meant to be written on and not to be read. That there is some writing printed on it which is intended to be, and can be, read does not make it a book because it is not primarily intended to be read like a book. The diaries in question are primarily meant for keeping a daily record and have spaces with printed dates for daily memoranda and jottings. Though a sloka from Bhagwat Gita is printed at the top of each page, they are not to be treated as Bhagwat Gitas and nobody intending to purchase a copy of Bhagwat Gita will buy such a diary. Though there is some printed material of general information and knowledge, these diaries are not meant to be used like books for acquiring general knowledge. Using them for information on certain matters would only be an incidental use. 5. It seems that the word "books" in sec....
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....book" because the word "exercise book" though it may not be printed book for purpose of imparting information, reference, or recreation it certainly belongs to the category of that stationery which facilitates education. When we say "exercise books" the concept which comes to our minds is sheets of paper bound together and intended for providing mental exercise to a learner because it provides him with material for effective exertion. Exercise books, therefore, have been apparently exempted by the Legislature with intent to advance learning Periodical journal is intended to include those newspapers which are periodically printed for the purpose of disseminating information or providing recreation to the reading public. It is also saved from the unwelcome hand of taxation. In this context therefore if we examine the printed roll registers we find that they fail to fulfil requisite qualification. They are merely printed sheets of paper conveniently arranged to record the performance of the candidates at a given examination and only to be used by the examining bodies. They may indirectly advance education. They however do not directly assist it and therefore they escape exemption." 5....
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.... cannot be treated even as periodical or journal. In this view of the matter, the contentions urged on behalf of the University must be rejected. We are in agreement with the view taken by the Tribunal that the sale of prospectus and application forms would fall under Entry 71 of the Third Schedule. Thus, the questions raised in these revision petitions are answered against the petitioner-University and in favour of the respondent-State. The revision petitions are accordingly dismissed. However, there shall be no order as to costs." 54. In the appellant's own case in M/s Amway India Enterprises v. Commissioner of Commercial Tax (supra), the Hon'ble Allahabad High Cout had considered whether the brochures sold by the appellant would be exempted from tax in Entry No. 7 of the First Schedule of the Uttar Pradesh Value Added Tax Act, 2008, in the category of books or should be classified as printed material attracting tax at the rate of 4%. The Hon'ble High Court noted that even though the brochure, in a wider sense, can be termed as book but the same is rightly classified in a category of printed material. It was held as under: "20. From the reading of Section 7 of the VAT Act, it ....
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....oard or Council. Simultaneously, Schedule-II Part-A is the list of goods which are to be taxed @ 4% and Entry 100 is of printed materials including diary and calendar. The argument of revisionist counsel to the extent that books include brochure cannot be accepted, as brochures are nothing but promotional and advertising material, which provide multiple information and have been rightly held by the Tribunal to be covered under the category printed material." 55. In the present case also, the product sought to be classified as periodicals by the appellant, is essentially in the nature of catalogue containing information in relation to the products being offered for sale. No doubt, certain other information and news in relation to events, being organized, is also mentioned for the purpose of the consumption of its dealers. The same, however, in our opinion, cannot be held to be a periodical as referred in Entry No. 5 of the First Schedule. Moreover, it is not disputed that 'Amagram' is in the nature of a 'catalogue', which has specifically been included in Entry No. 52 of the Third Schedule by Circular No. 2 dated 26.04.2005. 56. It is settled law that a person claiming exemption....
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....r in which it is used. It states 'Warm the oil slightly. Apply to the scalp, massage well, and leave it overnight. Wash off with mild shampoo in the morning.' The product is also listed in the category of 'hair care'. 62. The Hon'ble Allahabad High Court, in the case of M/s Bombay Oil Industries (P) Ltd. v. Commissioner of Trade Tax, Uttar Pradesh (supra), was considering classification of 'parachute coconut oil'. It was claimed that the product falls under the entry 'oils of all kinds' and not under the entry 'cosmetics and toilet requisites' under the U.P. Trade Tax Act. 63. The Hon'ble Court noted that the product is sold in packing of 200 and 500 ml, which is not purchased by the trader dealing in edible oil but is sold to small consumers at a much higher rate than the prevalent rate of edible oil. It is also advertised in T.V. and other media as hair oil and not as edible oil. 64. The Hon'ble Court applied the popular Intention Test and held that the product 'parachute coconut oil' ought not to be classified as 'oils of all kinds'. 65. In the case of State of Madhya Pradesh v. Marico Industries (supra), the Hon'ble Supreme Cout considered whether the product 'Mediker', whi....