The burden of proof on the revenue to justify classification, the principles of specific entry overriding general entry, and the importance of supporting evidence in classification matters.

ORDER :

1. The present Sales Tax Revisions / References (for short "STRs"), filed under Section 84 of the Rajasthan Value Added Tax Act, 2003 (for short "RVAT Act"), were admitted on following questions of law :

In STR No. 14/2022 and in STR Nos. 17-21/2022:

“(a) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in ignoring the fact that the assessment order passed by the respondent Assistant Commissioner under Section 25 of Rajasthan Value Added Tax Act, 2003 was passed merely on a change of opinion and there was no reason to believe that the petitioner has avoided or evaded tax or has not paid tax in accordance with law or has availed input tax credit wrongly?

(b) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in ignoring/overlooking the fact that Memory Cards are IT products covered under Entry No.3 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 per cent on ‘Computer system and peripherals, computer printers excluding multifunctional devices & electronic diaries’?”

In STR Nos. 114-115/2020 and in STR Nos. 1-6/2023:

“(a) Whether the ‘Memory Cards’ are not ‘Prepared unrecorded media’ as per entry no.10 of Schedule-IV of RVAT Act-2003 made available since introduction of RVAT in the State w.e.f. 1.4.2006?

(b) Whether the notification no.2016-187 dated 08.03.2016 is not clarificatory in nature of entry no.10 of Schedule-IV of RVAT Act-03?

(c) Whether the determination order of Commissioner is valid one after passing of nine (9) years?”

In STR Nos. 156-158/2023:

“(a) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in holding that Memory Cards are not IT products covered under Entry No.10 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 percent on “Prepared unrecorded media for sound recording or similar recording of other phenomena including Compact Disc (CD) and Digital Versatile Disc (DVD)?

(b) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in ignoring/overlooking the fact that alternatively Memory Cards are IT products covered under Entry No.3 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 percent on ‘Computer system and peripherals, computer printers excluding multi-functional devices & electronic diaries’?”

2. Since common question of law of classification of ‘memory cards’ under the RVAT Act is involved in all these STRs, with the consent of the parties, they were heard together and are now being decided by way of this common order. STR No. 17/2022 is taken as lead file to peruse the facts.

SUBMISSIONS OF PETITIONER-ASSESSEE

3. Learned counsels for the petitioner-assessee submits that the petitioner-assessee are engaged in trading of different type of IT products including the goods in question, i.e. the ‘memory cards’. The petitioner-assessee had, since beginning, been effecting sale of the goods in question and charging tax @ 5/5.5 percent by treating the goods in question to be classifiable under Entry 10 of Part A of Schedule IV to the RVAT Act, which read as “Prepared unrecorded media for sound recording or similar recording of other phenomena including Compact Disc (CD) and Digital Versatile Disc (DVD)”. However, after a survey of the business premises being conducted by the respondent-revenue on 08.10.2015, Show Cause Notice (for short “SCN”) was issued to the petitioner-assessee under Section 25/26 of RVAT Act as the respondent-revenue had determined that the goods in question, i.e. the memory cards, were not covered under any of the specific entries an