TMI Blog2013 (3) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... stem was continue to remain taxed at 4%, whereas only the white Kerosene which is meant for industrial purpose is taxed at 25%. In a study undertaken by the Southern Region of the Anti-Adulteration Cell it was observed that "unimaginable quantities of white kerosene are being imported for consumption by industrial consumers and by the general public. It was also found that the State Government suffers a heavy loss of revenue on account of sales tax evasion as the sales tax on diesel is around 28 per cent as against 13.8 per cent on SKO. Considering all these factors along with the laudable recommendations made by the Standing Committee and the follow up steps taken by the State Government to curb the misuse of kerosene meant for Public Distribution System, no illegality in imposing tax on white kerosene meant for industrial purpose at 25%. - W.A.No.781 of 2010 - - - Dated:- 25-2-2013 - Elipe Dharma Rao And M. Venugopal,JJ. For Appellants : Mr.R. Venkataraman in all WAs Senior Counsel for M/s. Lakshmi Sriram For Respondents : Mr.R. Sivaraman in all WAs Special Govt. Pleader (Taxes) JUDGMENT Aggrieved by the common order passed by the learned single Judge i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the aforesaid background of facts, the amendment Act 21/2003, by which Entry 10 and 18 got amended, came to be challenged before the Tamil Nadu Taxation Special Appellate Tribunal, on abolition of which the matters came before the learned single Judge, who, under the impugned order dismissed the writ petitions by observing that the State Government has got every power to tax kerosene different from that of Superior Kerosene Oil or White Kerosene Oil and the attack of discrimination has to fail. 4. Mr. Venkataraman, learned Senior Counsel appearing for some of the appellants, though reiterated the contentions raised before the learned single Judge, strenuously contended that there is no difference between the term 'Kerosene or 'White Kerosene' and both denotes the same meaning and it was not distinguished by the Government at any point of time prior to coming into force of Act 21 of 2003. It is his further contention that different tax treatment could not be given to the self same products and the competency of the State to impose different rates for different products was never in challenge before the learned single Judge. According to him, the amending Act has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exercise of power under Section 59(1) of the TNGST Act, the State by Notification issued under G.O.Ms.No.25, Commercial Tax Department, dated 21.3.2003, amended the Entry in Eleventh Schedule with effect from 21.3.2003, by which Kerosene was differentiated into two different items i.e., 2(iv) and 2(vii). As per Part 2(vii) of the Schedule, White Kerosene (Superior Kerosene Oil) was made taxable at 25% at first sale. This amendment was taken as a policy decision by the Statement Government and also found a place in the Budget Speech made on the floor of the Tamil Nadu Assembly. Thereafter, by Act 21/2003, the Schedule was amended as per which White Kerosene was taxed at 25% at first sale by Entry 18 with effect from 21.3.2003. In the above background, it is the contention of the appellants that from 17.7.1996 to 20.3.2003, Kerosene was used without any exclusion and whatever name it was called, it was taxable only at 4% at first sale and not 25% as amended by Act 21 of 2003. According to them, 'Kerosene' is a single commodity and there cannot be any artificial separation of same commodity into two types and therefore the imposition of two different taxes on the same c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the present case as it has been subsequently distinguished in Associated Cement Companies Ltd's case by observing as follows :- 26. . . . Reversing the decision it was held by this Court that the two preparations, arishtams and asavas, were medicinal preparations, and even though they contained a high alcohol content, so long as they continue to be identified as medicinal preparations they must be treated, for the purposes of the sales tax law, in like manner as medicinal preparations generally, including those containing a lower percentage of alcohol. In the said case the charge of discrimination was upheld having regard to the inherent nature of the commodity and its similarity with others falling within the same category. But in the present case, the rate of tax on cement is made dependent on whether the sale price of cement includes the cost of packing materials. 27. The legislature distinguished between two categories of sale of cement recorded by the dealer as in these two categories there is considerable variation in the turnover base. In the category of transactions falling in clause (a) Entry 18 taxable turnover includes the value of the cement and the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned single Judge after considering the rival contentions has rightly observed that an entry by virtue of Section 59(1) made into the Schedule will stand in the same footing as entry by virtue of legislative amendment and the attack that a commodity is same and therefore is liable for the same rate of tax cannot be accepted as it would amount to questioning the legislative policy of the State to tax a particular commodity. As rightly pointed out, in the present case, the allegation of discrimination will not arise as the legislature had chosen to make an entry into the schedule specifying the commodities under two different heads and so liable for different levies. In respect of surcharge and resale tax we are in agreement with the decision of the learned single Judge that the dealers are bound to pay the said rate of levy of tax and also surcharge and resale tax, which are also applicable notwithstanding the so-called exemption under Section 17(1). 13. Apart from the reasons given by the learned single Judge, the appeals are liable to the rejected for other reasons stated under. One has to borne in mind the object of the amendment to the schedule incorporating that the SKO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inspected by the inspecting officials periodically and action is being taken against those dealers who contravene the provisions of the Tamil Nadu Kerosene (Regulation of Trade) Order 1973. 17. The Standing Committee observed that the Government of India's Notification dated 2.9.1993 relating to import of SKO stipulated that no person should sell or use kerosene imported under Parallel Marketing Scheme as fuel or as additive to fuel in a motor vehicle. With regard to implementation of the Notification, the Tamil Nadu Government explained that Officers of Civil Supplies and Consumer Protection Department, Revenue Department and all Gazetted Officers in Police Department have been notified as authorised officers. It is also stated by the Government that if the kerosene is used as fuel or additive to fuel for motor vehicle, then the Civil Supplies C.I.D. are taking action by registering criminal cases and arresting the accused seizure of fuel, adulterated fuel and the vehicle concerned and a final report is sent to the Collector to take action. 18. The Committee, while making its recommendations, has opined as follows:- 3. The Committee find that there is a big differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for illuminating burning oil lamps i.e., @ 4% was to provide some relief to those economically backward sections of society who use kerosene for illumination and other domestic purposes, and therefore, the benefit of concessional rate of duty was available only on the kerosene meant for PDS. On such consideration only the kerosene which meant for Public Distribution System was continue to remain taxed at 4%, whereas only the white Kerosene which is meant for industrial purpose is taxed at 25%. It is brought to the notice of this Court that in a study undertaken by the Southern Region of the Anti-Adulteration Cell it was observed that unimaginable quantities of white kerosene are being imported for consumption by industrial consumers and by the general public. It was also found that the State Government suffers a heavy loss of revenue on account of sales tax evasion as the sales tax on diesel is around 28 per cent as against 13.8 per cent on SKO. Considering all these factors along with the laudable recommendations made by the Standing Committee and the follow up steps taken by the State Government to curb the misuse of kerosene meant for Public Distribution System, we do not an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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