AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 144
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....l people, and emphatically declared: "I have no doubt that true 'Swadeshi' consists of encouraging and reviving home industries". 2. We are reminded of the teachings and vision of the Mahatma because, the issues for our consideration relate, albeit indirectly, to the sustainability of village industries and the support they require to exist in highly globalised markets and hyper-urbanised world. 3. The proximate cause that brings these matters before us, revolves around whether the products of recognised Village Industries are eligible for exemption from Value Added Tax; but, the decision of them may even impact the capacity of such industries to remain self-sufficient and viable. 4. We are considering these petitions together, since the constitutive questions are the same and the issues projected are analogous, if not, identical. 5. The petitioner in these petitions is stated to be a Co-operative Society, registered under the provisions of the Kerala Co-operative Societies Act, 1969 (Co-operative Act, for short); and to be financed and recognized by the Kerala Khadi and Village Industries Board ('Khadi Board'). They say that the 'Khadi Board' is a statutory en....
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....nits approved by the various Boards. He vehemently contended that, when 'pottery' is one of the items included in Entry No. 55 of the First Schedule, it can only be construed to take into its ambit all objects made of 'clay and hardened by heat'; and consequently, to never exclude 'earthen roofing tiles,' which his clients are now manufacturing. 10. Sri. A. Kumar, thereafter, asserted that the mentation of the learned Tribunal, in the impugned orders - both the original and the rectification, is that, since 'Kiln-burnt flooring, roofing and earthen tiles' is a specific item in Entry No. 18 of the Third Schedule, shown to be attracting Harmonized System of Nomenclature (HSN) number 6901.00.30, the articles manufactured by his client would fall into its purlieus; and resultantly not in the widened concept of 'pottery'. He argued that this view travels wholly contrary to the view taken by a Bench of the Tribunal in Palakkad, in TA(VAT)No.41/2015 and connected matters, which had concluded affirmatively - and which is now without any challenge or assail - that the articles produced by the Manufacturing Units approved by the 'Boards', would have the protection of the Entry No. 55 ....
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....ishment of Board.- (1) With effect from such date as the Government may, by notification in the Gazette, appoint in this behalf, there shall be established for the purposes of this Act, a Board by the name of the Kerala Khadi and Village Industries Board. The Board shall be a body corporate having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to contract and do all things necessary for the purposes of this Act, and may by the said name sue and be sued. 15. Thereafter, the 'Khadi Act' provides, as being the functions and powers of the 'Board', ut infra: 15. Functions of the Board.-(1) It shall be the duty of the Board to organize, develop and regulate khadi and village industries 3[and to assist the local authorities in implementation of the schemes for the development of Khadi and Village Industries] and perform such functions as the Government may, prescribe from time to time. (2) Without prejudice to the generality of the provisions of sub-section (1), the Board shall also in particular discharge and perform all or any of the following duties and functions namely:- (1) to ....
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....mission;] (ii) to incur expenditure and undertake works in any area in the State of Kerala for the framing and execution of such schemes as it may consider necessary for the purpose of carrying out the provisions of this Act or as may be entrusted to it by the Government [or local authorities] subject to the provisions of this Act and the rules made thereunder. 16. It is, consequently, unmistakable that the primary function of a 'Board' is to organize, develop and regulate Khadi and Village Industries and to assist and run such; with the singular objective of providing deserving persons to gain employment, through the organization of such industries. 17. The social engineering unexpendables behind the afore, can ill be lost sight of - it being to peril, if one were to do so - namely, to support and develop 'Khadi' and 'Village Industries', which otherwise, would face ingurgitation from global competition and state-of-the-art mechanized manufacturing. 18. It is pertinent - as being unequivocally admitted - that the petitioner is recognized and financed by the 'Board', as evident from Annexure A produced in each of these cases; and that the 'Board' has specifically ....
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.... ridges 6807 (5) Cement bricks including hollow bricks 6810.11.10 (5A) Cement paving blocks ****** (6) Others 6901.00.90 23. Concededly, the petitioner is manufacturing 'earthen roofing tiles'; and the crucial question is whether it ought to be taken to subscribe to the classification of 'Kiln-burnt flooring, roofing and earthen tiles' as available in Entry 18 of the Third Schedule; or if it would fall within the concept of 'pottery', as available in Entry 55 of the First Schedule. 24. It is of acme relevance in these cases that Entry No. 55 of the First Schedule to the 'KVAT Act' is drafted in a very specific tenor: namely, to cover products that are manufactured by Units approved by the 'Board'. This luculently is a well thought of protection offered to such Units, particularly because they are either governed, or approved, or financed, by the 'Boards' within the umbra of the 'Khadi Act.' In contradistinction, Entry 18 of the Third Schedule thereof applies to every manufacturer of an article that falls within its definitions and meanings; but not specifically to Units like the petitioner - who, as said above, are supported by the 'Boards'.....
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..../2015 and connected matters, when seized of the same issue, has held as under: 5. It is true that bricks of all kinds are covered by Entry No. 18 of Third Schedule and sub-clause one of the entry covers bricks of silicous earth having HSN Code 6901.00.10. We are also aware that as per the rules of Interpretation if any inconsistency is observed between the meaning of a commodity without HSN No. and that of a commodity having HSN No., the commodity should be Interpreted by including it in that entry which is having the HSN No. Yet, we also notice that the appellant is an industrial cooperative society of tile workers, engaged in the manufacture of bricks of clay as admitted in the notes. Appellant has submitted photo copies of certificates issued by the Director of Village Industries on behalf of Secretary of the Board (Kerala Khadi and Village Industries Board) whereby it is certified that the appellant is financed and recognised by the Board for the development of brick manufacturing unit under village pottery Industry. It is also mentioned in the certificates that those were issued for the purpose of getting exemption from payment of VAT as the commodity is notified unde....
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.....O. must be interpreted... The exemption was granted in terms of 1993 G.O. the thrust of which was to increase the Industrial development in the State'. 34. The learned Tribunal in these cases, however, has differed from the view afore, holding that the article manufactured by the petitioner - namely, 'earthen roofing tiles' - associate most proximally to 'Kiln-burnt flooring, roofing and earthen tiles', available in Entry No. 18 of the Third Schedule of the 'KVAT Act'. 35. We are afraid that this opinion wholly militates against and disregards the pivotal purpose for which Entry No. 55 of the First Schedule of the 'KVAT Act' has been brought into force. 36. We are fortified in our opinion by the tenor with which the word 'pottery' has been defined by the Hon'ble Supreme Court in several cases, one such being, South Gujarat Roofing Tiles Manufacturers Association v. State of Gujarat [1976 (10) TMI 147 (SC)]. The Hon'ble Court has declared therein that, in a general semantic sense, "'pottery' is an expression of a very wide import, embracing all objects made of clay and hardened by heat." (sic) 37. In Sivaya Gramodyog Sansthan v. Commissioner of Sales Tax, U.P., Lucknow ....
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....n the one hand from porcelain and stoneware and on the other from brick and tile. 11. In the case of South Gujarat Roofing Tiles Manufacturers Association v. State of Gujarat AIR 1977 SC 90 the honourable Supreme Court has observed as follows: "Pottery is an expression of a very wide import, embracing all objects made of clay and hardened by heat." The aforesaid notification of 1979 has been amended by Notification No. ST-2-7037/X-7(23)/83-U.P.Act-XV-48-order-85, dated January 31, 1985. The said notification reads as follows: "In exercise of the powers under clause (b) of section 4 of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act No. XV of 1948), read with section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904), and in supersession of all previous notifications issued under the aforesaid clause, the Governor is pleased to exempt, with effect from February 1, 1985 the sale or purchase of the goods mentioned in column 2 of the Schedule hereunder by the persons or the class of persons mentioned therein, from tax under the said Act of 1948, subject to the conditions, if any, specified in column 3 thereof. 38. ....