Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

State of Haryana Versus M/s Om Pesticides, Janta Mandi, Karnal and another

2015 (12) TMI 1297 - PUNJAB AND HARYANA HIGH COURT

Denial of exemption claim - whether the subject items/goods which are insecticides/pesticides are covered under Entry 38B of Schedule B appended to the HVAT Act or not - Held that:- As per language of the entry, two conditions have to be fulfilled in order to qualify for exemption. Firstly, the items must be pesticides or weedicides or insecticides and secondly, these should be meant for use for plants only. The Tribunal has considered the matter in detail and recorded that the products used by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Chemical Aldrex 30 EC was held to be the pesticide used for plant protection and therefore the same was covered by Entry 27 of the Third Schedule to the Delhi Sales Tax Act, 1975 - Tribunal was right in concluding that the product of the respondent assessees was covered under Entry 38B of Schedule B of the HVAT Act. The substantial questions of law are answered against the State.

There is delay in filing the appeals ranging from 442 to 756 days. No satisfactory explanation has been gi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Mamta Singla Talwar, DAG, Haryana with Mr.Saurabh Mago, AAG, Haryana. For The Respondent : Mr. A.K.Sachdeva, Advocate, Mr. Arun Nehra, Advocate Ajay Kumar Mittal,J. 1. This order shall dispose of a bunch of 11 appeals viz. VAT Nos.93 of 2014, 10, 15, 27, 28, 29, 30, 31, 37, 38, 39 of 2015 as learned counsel for the parties are agreed that the issue involved in all the appeals is identical. However, the facts are being extracted from VAT Appeal No.93 of 2014. 2. VAT Appeal No.93 of 2014 has been .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ble for use on plants only fall under entry No.38B of Schedule B of HVAT Act 2003? ii) Whether the Hon ble Haryana Tax Tribunal was justified in holding that the above mentioned intermediate chemicals (which cannot be used in as such form on the plants) are covered by Entry No.38B of HVAT Act 2003? iii) Whether the process is involved in obtaining the final product to be used for plants only from the above mentioned chemical in manufacturing process and if yes whether the raw material and the fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rbendazim which are insecticides/pesticides are covered under Entry 38B of Schedule B appended to the HVAT Act or not. The applicant was afforded opportunity of hearing to plead its case. It was submitted that the goods were industrial raw material used in manufacturing of pesticides and insecticides and the final products will be covered in Entry 38B of Schedule B of the HVAT Act. The assessee also produced a copy of the Schedule appended to the Insecticides Act, 1968 (in short, the 1968 Act ) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s which are used in formulation of such final products. Though the said items may be covered under the 1968 Act, yet the same cannot be said to be covered under Entry 38B of Schedule B of the Act as the said entry is conditional one i.e. used for plants only . Accordingly, a detailed order on clarification sought by the assessee was passed by the Principal Secretary, Government of Haryana, Excise and Taxation Department under Section 56(3) of the Act on 16.7.2012, Annexure A.1. Aggrieved by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arties. 5. Learned counsel for the appellant-State submitted that the product being manufactured by the respondent was not the final product and in such a situation, it did not fall under Entry 38B of Schedule B of the HVAT Act. It was urged that each and every word of the entry has to be given meaning and in view thereof, the expression used for plants only had to be given appropriate meaning and since the respondent assessees were not selling pesticides, weedicides and insecticides but were ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ents in M/s Bombay Chemical Private Limited vs. The Collector of Central Excise, Bombay I, Bombay, AIR 1995 SC 1469 (SC), Union of India and another vs. southern Distributors, (1996) 102 STC 509 (Mad.), Kissan Chemicals vs. Union of India and others, 1996(64) DLT 73 (Del.), B.H.Vasudeva Pai and Sons vs. State of Karnataka, (2006) 146 STC 232 (Karnataka).Union of India (UOI) and others vs. Pesticides Manufacturing and Formulators Association of India, AIR 2003 SC 1, National Organic Chemical Ind. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ption. Firstly, the items must be pesticides or weedicides or insecticides and secondly, these should be meant for use for plants only. The Tribunal has considered the matter in detail and recorded that the products used by the assessee are pesticides, weedicides and insecticides. Further, they are technical grades in concentrated form and after dilution, these products remain insecticides/pesticides or weedicides and are used for plants after mixing inerts and other such agents to make them fit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es, weedicides and insecticides are not generally exempted from the payment of tax and the same will be exempted only if used for plants. The impugned order nowhere states that the produces in question are not pesticides, weedicides or insecticides. It only says that these products are not final products in the marketable state and being intermediate goods, the same are not used for plants by the farmers in that form. Thus, by implications, it has been admitted that the goods in question are pes .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ay Chemical Pvt. Limited vs. Collector of Central Excise, Bombay reported as 99 STC 339. Thus, the first condition of the Entry 38B is duly met. 11. The next question arises whether these products are used for plants only or not? It has been held in the impugned order that since the products in question are not final products in the marketable state, therefore, the same cannot be used for plants. It has been stated therein that these products are raw material or intermediate goods intended to be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nts for the end use by the farmers. It is also revealed that by process of dilution these items do not cease to be insecticides/pesticides or weedicides as the dilution process does not amount to any manufacture in view of the ratio of the judgments cited by the appellants during the hearing of the case, as also mentioned in the grounds of appeal. There is no rebuttal of this fact as well as from the respondent side. Therefore, after dilution also these products remain insecticides/pesticides or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rious crops by the help of Annexures A.1 to A.8 placed on the file. Likewise, the applications made for the registration of the products under the Insecticides Act from B1 to B7 placed on the file also reveals that the products in question are used for plants. Thus there is ample documentary evidence to prove that the products in question are used for plants only. There is no rebuttal of these facts from the respondent side. 14. A similar question arose before the Hon'ble Madras High Court i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

emical Limited vs. Commissioner of Sales Tax (supra), the Hon'ble High Court of Delhi has held that as clear from the publication of Punjab and Haryana Agricultural Universities that Aldrex 30EC was used to control pests by mixing with seeds or with irrigated water and therefore it fell under Entry 27 of the 3rd Schedule to Delhi Sales Tax Act, 1975 as the pesticides for plant protection. The judgment of the Hon'ble Supreme Court in the case of Commissioner of Trade Tax UP vs. M/s Kartos .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ents etc. are used for plant protection for control/elimination of various diseases in the different crops as per recommendations. We hold accordingly. Resultantly, the appeal succeeds and the impugned order stands set aside. 10. Now we proceed to examine the various judicial pronouncements related with the subject. The Madras High Court delving into identical situation in Southern Distributor's case (supra) held as under:- 2.2. We have considered the arguments of Mr. K. S. Ahmed, Senior Gov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

under the said Act on the sales of pesticides meant for agricultural use in the whole of the Union Territory of Pondicherry." It is not in dispute that so far as the sales are made locally, the sales of pesticide meant for agricultural use in the whole of the Union Territory of Pondicherry are exempt. The notification exempts sales of pesticides meant for agricultural use in the whole of the Union Territory of Pondicherry. It is not the case of the Revenue that the commodity in question wi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tificates of the competent authorities concerned and other materials and has come to the conclusion that the product sold by the petitioner satisfied the requirements of the term "pesticide" and comes under the notification issued under section 19 of the Pondicherry General Sales Tax Act, 1967. We are in agreement with the finding of the Tribunal in this regard and we do not see any reason to differ from the finding of the Tribunal, which the Tribunal has arrived at, after considering .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tand dismissed. 11. Further in Bombay Chemical Pvt. Limited's case (supra), it was observed by the Apex Court as under:- 3.The appellant claimed that the disinfectant fluids manufactured by it were entitled to exemption after addition of item No. 18 in 1978. The Assistant Collector did not find any merit in the claim as insecticides, pesticides, weedicides and fungicides are necessarily required to possess the property and capability of killing insects, pests, fungi and weeds. It was held th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tor and reversed the order passed by him. It is the correctness of this order which is assailed in this appeal. 4.The Tribunal found that there was no dispute that the disinfectants were exciseable goods and that they were classifiable under Tariff Item 68. It was further found that these were being referred to and marketed as disinfectants and that the preparations in question were capable of killing various bacteria and fungi, but it refused to extend the benefit of the exemption notification .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ts which are preparations for general disinfection purposes and which are used in the bathrooms, gutters, floor cleaning, etc. The Tribunal considered various text books and literature produced by the appellant and the Department and observed that various authors have explained the terms used in the notification and the 'disinfectant' in different senses, some giving wider meaning to it and others narrower, therefore, it was not possible to draw any conclusion as to exact demarcation bet .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

noxious and one is used to their having an unpleasant or irritating smell. On the other hand, the disinfectants are used either to neutralise existing unpleasant smell or even to add a pleasant smell. Consequently, even though the disinfectant fluids produced by the appellant from phenolic compounds (tar acids) could destroy bacteria and fungi, but this being a part of function as disinfectant fluids, it cannot be classified as fungicide or pesticide. 5.'Disinfectant' is defined in Webst .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in that both are germicidal, but antiseptics are applied primarily to living tissue. The ideal disinfectant would rapidly destroy bacteria, fungi, viruses, and protozoans, would not be corrosive to surgical instruments, and would not destroy or discolour materials on which it is used'. It thus cannot be disputed that a disinfectant is also a killing agent. Even the Tribunal found that the goods produced by the appellant which contained high boiling tar acid kill the bacteria in the gutters a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he opined that it was not clear whether the formulations containing tar acids, as in the case of the goods produced by the appellant which were used as disinfectants, will be covered broadly by the term 'pesticides'. 6.'Pesticide' has been defined in Butterworths Medical Dictionary, Second Edition, as 'a comprehensive word to include substances that will kill any form of pest, e.g., insects, rodents and bacteria'. The term 'pesticide' includes a large variety of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e e.g., viruses, bacteria, or other microorganisms, which the administrator declares to be a pest and (2) any substance or mixture of substances intended for use as a plant regulator, defoliant or desiccant' [Pesticides in the Indian Environment, by P.K. Gupta p.2]. 7.'Fungicide' inhibits growth or destroys fungi pathogenic to man or other animals or inanimate surfaces. The appellant had imported tar acid to manufacture insecticide pesticide and fungicide. The Director General had pe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

instance lavender etc. may not be covered in the expression 'pesticide'. But those products which are used for killing insects by use of substances such as high boiling tar acid have the same characteristic as 'pesticide'. 9.Item No. 18 which was added in 1978 grants exemption to the categories of goods which can be classified as insecticides, pesticides, weedicides or fungicides. They have to be understood in broad sense. The reasoning of the Tribunal that if an expression is ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

whether technically it falls in the one or the other category. Once it is found that a particular good satisfies the test then issue which arises for consideration is whether it should be construed broadly or narrowly. One of the settled principles of construction of an exemption notification is that it should be construed strictly, but once a good is found to satisfy the test by which it falls in the exemption notification then it cannot be excluded from it by resorting to applying or construi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version