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2018 (5) TMI 81 - HC - VAT and Sales TaxRate of tax - All-in-one Diapers, Under-pads and Sanitary Napkins - whether these commodities are taxable at the concessional rate of 4.5% under Schedule III of the Act or would be taxable in the residuary entry at the rate of 14.5% of the Act? - Vires of Section 60(8) of KVAT Act - retrospective effect of order passed by the Commissioner . Held that: - the petitioner cannot successfully challenge the constitutional validity and vires of Section 60(8) of the Act and this Court does not find any lack of legislative competence of the State Government in enacting and amending Section 60(8) of the Act - such orders of Advance Ruling Authority can be undone or modified by overriding power vested in the Commissioner himself under Sub Section (8) inserted by Act No.54 of 2013 with effect from 01.08.2013, and that cannot be said to be inconsistent, conflicting or ultra vires the provisions nor the said provisions can be said to be lacking the legislative competence on the part of the State Legislature. Whether Clarification issued by Commissioner cannot be given retrospective effect? - Held that: - Sub Section (8) of Section 59 does not give any such power to the learned Commissioner to issue any such Clarification or Ruling with a retrospective effect. In the absence of any such specific power, the respondent-Commissioner could not have issued the impugned clarification by the impugned order at Annexure-A dated 11.09.2014 to be effective from 01.04.2005 onwards - the retrospectivity of the said order does not fit into the parameters of Sub Section (8) of Section 59 of the Act and to that extent, it deserves to be quashed. Rate of tax - All-in-one Diapers, Underpads and Sanitary Napkins - Held that: - It is well settled that if a commodity can by some rational understanding or analysis be brought or related to specific entry in the tax laws, the same cannot be taxed under the residuary entry and what is important is to apply the Trade Parlance Test or Common Parlance Test and not to apply the hair splitting exercise to apply the technical terms. The heading of the said Entry 60 namely, ‘Medical and Pharmaceutical preparations’ enumerating several items also inter alia including therein, “Wadding Gauze, Bandages and similar articles for medical, surgical etc., purposes” has to be read ‘ejusdem generis’ and the items manufactured and sold by the assessee are not the items which are alien to the said Entry 60 - They may not be exactly “Wadding Gauze or Bandages’” but they serve almost same or similar purposes - Such Underpads or Diapers definitely help them in maintaining good medical and hygienic conditions of their body and therefore, such items can certainly be said to be “similar articles” read with “wadding gauze and bandages for medical and surgical purpose” etc. Petition allowed.
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