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2015 (11) TMI 1077 - HC - VAT and Sales TaxClassification - Levy of tax on turnover of bitumen emulsion - Levy of penalty when there was confusion about its taxability - Held that:- The Supreme Court in the case of Commissioner of Sales Tax, U.P. -vs- Lal Kunwa Stone Crusher (P) Ltd. reported in [2000 (3) TMI 58 - SUPREME COURT OF INDIA] and Divisional Deputy Commissioner of Sales Tax -vs- Bherhaghat Mineral Industries reported in [1998 (8) TMI 87 - SUPREME Court] was of the opinion that, entry "stone" is wide enough to include its various forms, such as boulders, small stones, chips, etc. It was of the opinion that "stone" even after it is crushed or broken, would continue to be "stone" though it may be named as "boulder", "small stone", "chips", "gitti", etc. Therefore, even bitumen after it is transformed into bitumen emulsion is used in the construction of roads for the qualities it has as bitumen. The characteristics of bitumen in its original form continues even after it is converted into bitumen emulsion by firing upon the raw bitumen. Both the products are used for road and construction and maintenance, water proofing, soil stabilization, etc. The bitumen asphalt and bitumen emulsion are used as binder in road construction and maintenance. In that view of the matter, the orders passed by the revisional authorities holding that bitumen emulsion is also liable to tax at 5% is just and proper and do not call for interference. First appellate authority was also of the view, as bitumen emulsion is not specifically mentioned in the Notification and bitumen emulsion is different from bitumen, there is no tax liability. In other words, the authorities within the Department are also not clear about the taxability of bitumen emulsion. Under these circumstances, if the tax was not paid, believing it to be not taxable, question of imposing penalty would not arise. Now that the authorities have taken a consistent stand, which is now approved by us, the tax is payable. If tax is not paid, the assessee is not liable to pay penalty. Hence, it is open to the authorities to invoke Section 8 of the Act, if they choose to recover any interest for delayed payment. - Decided partly in favour of assessee.
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