2017 Supreme(AP) 105

In the High Court of Andhra Pradesh
Ramesh Ranganathan and M. Satyanarayana Murthy, JJ.
Godrej Sara Lee Limited – Petitioner
Versus
The Assistant Commissioner (CT) INT LTU, Secunderabad Division – Respondent
W.P. Nos. 23351, 23366, 23373, 23395 of 2008, 32987, 33406 of 2010, 24476, 24490, 25349 of 2011, 4092 of 2013, 8032, 9204, 15982, 15983 of 2014, 6365 of 2016 and T. Rev. C. Nos. 25 of 2015, 4, 8, 10, 11, 12 of 2016
Decided On : 01-06-2017

Headnote:

Insecticides Act - Sections 18, 9, 13, Section 3(e) and 9(3) - Consumer Projects petitioner in W.P. No. 6365 is engaged in the business of manufacture and sale of Mosquito Repellant Instruments Mosquito Repellant Mats Refills Coils and other products like flying insect killers and crawling insect killers Rat Killing Cakes Chalk Pencils for killing cockroaches - They claim to have launched a new product called HIT Anti-Roach Gel intended to kill hidden cockroaches, especially certain species like American and German cockroaches - aerosol can and on the website of the Petitioner crawling insect killer unique seek and kill applicator which kills hidden cockroaches - Petitioner claims that the said product is an insecticide that kills cockroaches. HIT AEROSOL FIK popularly known as Kala Hit is used for killing flying insects such as flies mosquitoes - It is also said to contain the poisonous element d-trans Allethrin that fatally affects the nervous system of the flying insect thereby killing it almost immediately - Rat is a rat killing poison containing Bromadialon - HIT Chalk is a chalk pencil used for killing ants cockroaches and other crawling insects and is said to contain the poisonous chemical Cypermethrin. In the assessment orders impugned in these Writ Petitions assessing authority held that these goods are not pesticides/insecticides falling within the ambit of Entry of the IV Schedule to the VAT Act and they were liable to be taxed at 12.5%/14.5% under Schedule V of the VAT Act as residuary goods - Petitioner also manufactures Mosquito coils Mosquito repellant vaporizers, and mosquito mats - Relating to the three assessment years are filed by M/s. S.C Johnson Products Pvt. Ltd. assailing the common order dated 20.01.2015 passed by the Telangana Sales Tax and VAT Appellate Tribunal, Hyderabad whereby classification of the products manufactured by them, under the residuary entry of the V Schedule to the Telangana Value Added Tax Act referred as the VAT Act was upheld primarily on the ground that Entry of Schedule IV to the VAT Act was limited to goods used for agriculture/horticulture purposes, and insect killers used for house-hold purposes did not fall within its scope – Held, disinfectant which was used for killing would be broadly covered in the word pesticide; disinfectants may be of two types; one to disinfect and other to destroy the germs; the former may not be covered in the expression pesticide, but those products which are used for killing insects by use of substances such as high boiling tar acid have the same characteristic as a pesticide; where the entries are descriptive of the category of goods, they have certain characteristics; therefore, when a question arises whether particular goods are covered in any category or not it has to be examined whether it satisfies the characteristic which go to make it a good of that category and whether in trade circle it is understood as such; if they are goods of technical nature, then whether it technically falls in the one or the other category; and once it is found that the particular goods satisfy the test, then the issue which arises for consideration is whether it should be construed broadly or narrowly. While Item 18, the scope of which fell for consideration in Bombay Chemical Pvt. Ltd. is no doubt similar to the first limb of Entry of Schedule IV of the VAT Act, when the first limb of Entry 20 is read along with the second limb applying the common parlance test it is evident that only pesticides and insecticides used for plant protection would fall within the ambit of the said entry, and not all kinds of pesticides and disinfectants. Even otherwise neither did any Entry, similar to Entry 100 of the IV Schedule fall for consideration nor was the scope of any such entry examined along with Item of the I Schedule to the Central Excise Act. Reliance placed on Pvt. Ltd.14 is, therefore, misplaced - Chemical Fertilizer mixtures, bio-fertilizers, micro nutrients, gypsum, plant growth promoters and regulators; rodenticides, fungicides weedicides and herbicides insecticides or pesticides but excluding phenyl, liquid toilet cleaners, floor cleaners, mosquito coils, mosquito repellants and the, like used for non-agricultural or non-horticultural purposes - APGST Act, or Entry 100(140) of Schedule-IV to the VAT was considered in Consumer Products Limited subject goods therein were, therefore, held to be insecticide killers falling within the word insecticide. The aforesaid decision of the High Court does not therefore persuade us to take a similar view. Reliance placed by the petitioners, on Godrej Consumer Products Limited10, is therefore of no avail - we find no infirmity either in the impugned orders of assessment, or the orders of the VAT appellate Tribunal which are subjected to challenge in the present proceedings by way of revision - Petitions and the TREVCs fail and are, accordingly, dismissed.