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2018 (3) TMI 1683 - HC - VAT and Sales TaxClassification of goods - rusk/toast - whether the rusk/toast would fall under entry 7, i.e., bread, under Schedule I of the Chhattisgarh Value Added tax Act, 2005 or it would fall under the residuary entry under Part IV of Schedule II of the said Act as claimed by the respondents? Held that:- A plain reading of section 15 of the VAT Act itself would show that all those products which are specified in Schedule I, tax shall not be payable on the sale and purchase of said products. Entry 7 of the said Schedule clearly refers to products both Bread or otherwise. Likewise, Schedule II of the said Act also envisages a list of products. What is also relevant is that the products which have been specified in Part II of Schedule II, the rate of tax levied is prescribed. Likewise, Part IV of the said Schedule II envisages that "all those goods which are not included in Schedule I, Part II and III of the said Schedule" have fixed the rate of tax at 14 per cent. The said entry in the Schedule, i.e., Part IV is normally referred to as residuary entry. Whether the toast or rusk would fall under the residuary entry under Part IV, the burden of proof is on the State Government and the onus also lies on them to first establish conclusively that by no conceivable process of reasoning can the said product be brought under any of the tariff items and hence the product was being brought under the residuary item. Bringing an item under the residuary entry - Held that:- It is the primary and paramount responsibility of the State to first convincingly prove and establish that the item under no circumstances can be brought under any of the tariff items under the Schedule of the VAT Act. Only then could the Government claim a particular product to be one which would come under the residuary entry - It is settled law that the onus or burden to show that a product falls within a particular tariff item is always on the Revenue. There is substantially no change in the basic physical properties used for manufacturing of bread as well as toast and rusk. It is only the manufacturing process and that too restricted to the time required for baking of the two products everything else is the same. The term "bread" under Schedule I, entry 7 has to be construed as a generic entry made and it has to be given the widest interpretation that could be given, subject to the condition that the ingredients being substantially the same - this court holds that rusk and toast also would fall within entry 7 of Schedule I of the VAT Act and it cannot be considered to be one which would come under the residuary entry. Petition allowed.
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