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IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
HON’BLE MR. JUSTICE KARDAK ETE, J.
M/s Eastern Infratech – Petitioner
Versus
The State of Assam and Others – Respondents
WP (C) Nos. 5642, 5644, 5646, 5647, 5651, 5661, 5670, 5671, 5672, 5673, 5718 of 2015
Decided On : 28-06-2024
ENTRY TAX - ASSAM ENTRY TAX ACT, 2008 - Sections 51, 55(e), 55(f), 55(g) - The court examined the classification of 'PET Reisin' and 'PVC Granuels' under the Assam Entry Tax Act, 2008, specifically under Entry 51 which refers to 'Chemicals'. The court emphasized the application of the common parlance test for interpretation, rejecting the scientific and internet meaning tests applied by the authorities. The court concluded that since the items in question are not recognized as chemicals in common usage, they do not fall under the taxable category as defined in the Act. The strict interpretation of tax laws was upheld, leading to the quashing of the tax assessments against the petitioners.
Fact of the Case:
The petitioners challenged the imposition of Entry Tax on 'PET Reisin' and 'PVC Granuels' under the Assam Entry Tax Act, 2008, arguing that these items are not listed in the Schedule as taxable goods. The authorities classified them as 'Chemicals' under Entry 51, leading to contested assessment orders.
Finding of the Court:
The court found that the authorities failed to apply the common parlance test, which is crucial for interpreting terms in tax legislation. The court noted that both the appellate and revisional authorities acknowledged that the items are not found in chemical shops, yet did not apply this understanding in their decisions.
Issues: The primary issue was whether 'PET Reisin' and 'PVC Granuels' can be classified as 'Chemicals' under Entry 51 of the Assam Entry Tax Act, 2008, making them subject to Entry Tax.
Ratio Decidendi: The court held that in the absence of a statutory definition for 'Chemicals' in the Assam Entry Tax Act, the common parlance meaning must be applied. The court emphasized that the interpretation should favor the taxpayer when ambiguity exists.
Final Decision: The court quashed the assessment orders and ruled that 'PET Reisin' and 'PVC Granuels' do not fall under the definition of 'Chemicals' as per the common parlance test, ordering the refund of any tax paid by the petitioners.
JUDGMENT :
KARDAK ETE, J.
1. Heard Ms. N. Hawelia, learned counsel for the petitioners. Also heard Mr. B. Gogoi, learned standing counsel for the respondent Finance and Taxation Department.
2. Since issue involved in all the writ petitions is identical on facts and law, same are disposed of by this common judgment and order.
3. The petitioners have challenged the levy of Entry Tax under the Assam Entry Tax Act, 2008 on “PET Reisin” and “PVC Granuels” on the ground that the said items are nowhere mentioned in the Schedule attached to the Assam Entry Tax Act, 2008 to make the same taxable. The Respondent Authorities have imposed Entry Tax on import of the items “PET Reisin” and “PVC Granuels” by referring them as “Chemicals” which is mentioned at Entry No. 51 of the Schedule attached to the Assam Entry Tax Act, 2008. Challenge is also to the consequent assessment orders passed by the respondent authorities levying Entry Tax on “PET Reisin” and “PVC Granuels” treating the same as Chemicals as well as the orders passed by the Appellate and Revisional Authrities confirming the same against the petitioners.
4. The petitioners are engaged in the business of manufacturing and sale of PET Pre-form within and outside the State of Assam. Raw materials required are procured from outside the State of Assam for the manufacturing purpose. Amongst other materials utilized for manufacturing, the petitioners imports “PET Reisins” and “PVC Granuels” into the State of Assam.
5. In WP(C) 5642/2015 and WP(C) 5644/2015, the challenge made is to the impugned order dated 08.06.2015 passed by the Additional Commissioner of Taxes, Assam, impugned order dated 29.04.2014 passed by the Deputy Commissioner of Taxes (Appeals), Guwahati and the assessment demand notice dated 06.08.2013 issued by the Superintendent of Taxes, Unit-B, whereby, tax has been levied on the item “PET Reisin” imported from outside the State of Assam as “Chemicals” for the assessment year 2011-2012 and 2012-2013 respectively.
6. In WP(C) 5646/2015 and WP(C) 5647/2015, the challenge made is to the impugned order dated 06.06.2015 passed by the Additional Commissioner of Taxes, Assam, impugned order dated 29.04.2014 passed by the Deputy Commissioner of Taxes (Appeals), Guwahati and the assessment demand notice dated 05.08.2013 issued by the Superintendent of Taxes, Unit-B, for the assessment year 2009-2010 and 2010-2011.
7. In WP(C) 5651/2015, WP(C) 5661/2015 and WP(C) 5671/2015, the challenge made is to the impugned order dated 25.07.2014 passed by the Additional Commissioner of Taxes, Assam, impugned order dated 25.07.2014 passed by the Deputy Commissioner of Taxes (Appeals), Guwahati and the assessment demand notice dated 24.07.2012 issued by the Superintendent of Taxes, Unit-B, for the assessment year 2009-2010, 2010-2011 and 2011-2012.
8. In WP(C) 5670/2015 and WP(C) 5672/2015, the challenge made is to the impugned order dated 06.06.2015 passed by the Additional Commissioner of Taxes, Assam, impugned order dated 29.04.2014 passed by the Deputy Commissioner of Taxes (Appeals), Guwahati and the assessment demand notice dated 05.08.2013 issued by the Superintendent of Taxes, Unit-B, for the assessment year 2011-2012 and 2012-2013.
9. In WP(C) 5673/2015 and WP(C) 5718/2015, the challenge made is to the impugned order dated 30.03.2015 passed by the Additional Commissioner of Taxes, Assam, impugned order dated 30.03.2015 passed by the Deputy Commissioner of Taxes (Appeals), Guwahati and the assessment demand notice dated 23.07.2013 issued by the Superintendent of Taxes, Unit-B, whereby, tax has been levied on the item “PET Reisin” and “PVC Granuels” imported from outside the State of Assam as “Chemicals” for the assessment year 2009-2010 and 2010-2011.
10. It is the contention of the petitioners that the items “PET Reisin” and “PVC Granuels” imported from outside the State of Assam is a Synthetic Fibre in solid form which cannot be considered as “Chemicals” under Entry 51 of the Schedule attached to
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