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2015 (9) TMI 1516 - HC - VAT and Sales TaxEntry tax on "barley malt"/"malted barley" - whether the Tribunal is justified in giving a finding that malted barley/barley malt is an agricultural produce falling under II Schedule to the Karnataka Tax on Entry of Goods Act, 1979 and is exempted from the levy of tax under the KTEG Act? Held that: - If an agricultural produce is subjected to a process for being made fit for consumption, it is excluded from the definition clause. When it is expressly excluded from the definition clause, it cannot be included in the exemption clause by implication or on the premise that the product has retained its original identity despite being subjected to a process. Therefore, it has to be held that when an agricultural produce is subjected to a process for being made fit for consumption, i.e., either for human consumption or consumption in a manufacturing process or for consumption of livestock or animals, then it ceases to be an agricultural produce. But only on those agricultural produces which are made fit for consumption in a manufacturing process as a raw material, or as an input used in the manufacture of intermediate or finished product, entry tax is leviable, under entry 80 of Schedule I. Then it cannot be construed as an agricultural produce within entry 2 of Schedule II, which contains the list of exempted products. When once it is admitted by the respondents that those products were subjected to certain processes for being used as raw materials in the preparation or manufacture of beer, it must be held that they were subjected to certain processes for being made fit for consumption, in which event, those products cannot be considered to be agricultural or horticultural produce within the definition clause. Hence, they are not subject to exemption from payment of entry tax under the Act. It is held that malted barley/barley malt, hops pellets and maize flakes are not agricultural/horticultural produce falling under entry 2 of Schedule II of the Act and they are not exempted from the levy of tax under the Act - petition allowed - decided against assessee.
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