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TMI Blog2016 (3) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... g for the petitioner. Also heard Mr. S. Saikia, the learned standing counsel for the Finance (Taxation) Department, appearing for the respondent Nos.1-4. But none appears for the M/s. Nilachal Chemical (P) Ltd. (respondent No.5), who were impleaded on 7.1.2015. 2. The petitioner produces Sodium Silicate which is used as an ingredient in manufacture of soap, detergent, cement and other such products. They claim that Sodium Silicate should be subjected to tax @4% under the Assam Value Added Tax Act, 2003 (hereinafter referred to as the 'the VAT Act'), by treating it as industrial input under Part-'C' of IInd Schedule of the VAT Act. With such contention, the petitioner challenges the order dated 5.1.2006 (Annexure-C), whereby the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal and Bihar. Therefore the Commissioner was requested to clarify under which entry, the product Sodium Silicate is to be taxed, under the VAT Act. 4. But no decision on the representation filed by the manufacturer Association was given or conveyed and instead, on the application made by the new entrant into the field i.e. M/s. Nilachal Chemical (P) Ltd. (respondent No.5), an order was passed on 5.1.2006 (Annexure-C), whereby by the Commissioner declared that as Sodium Silicate is not a specified item, under any of the entries of Part-'C' of IInd Schedule, the said item should be taxed as a residuary item @12.5%, under the VAT Act. We may note that this order of the Commissioner of Taxes was passed under Section 105 of the VAT Act. 5. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxability of the item at the instance of a party, which is not liable to tax, was an unjust decision, without taking into account the implication of the said decision on the existing manufacturers, who are subjected to tax. 9. It is further contended that the existing manufacturers who had submitted their representation under the banner of the All Assam Sodium Silicate Manufacturer's Association, can't be equated with a new entrant who are exempted from payment of any tax under the VAT Act and therefore Mr. Gaur submits that the Commissioner's decision of 5.1.2006 will confer unfair price advantage to the respondent No.5 vis-à-vis the existing manufacturer, of the same product. 10. The learned counsel refers to Section 105(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m but a decision under Sub-Section (2) of Section 105 of the VAT Act must be preceded by a reasonable opportunity of hearing to the applicant, who apply for determination of such question. Moreover the Commissioner is also empowered under Sub-Section (6) to review an order passed by him under Section 105 and/or pass any such other order, as may be considered just and proper. 15. When we examine the order passed by the Commissioner of Taxes on the application of M/s. Nilachal Chemical (P) Ltd., we find that the order of 5.1.2006 was not passed after due consideration of the applicable parameters, to determine the rate of tax to be charged for Sodium Silicate. At best the Commissioner's order can be described as a ministerial order, where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent No.5) was without affording any hearing to the existing manufacturers of Sodium Silicate, who are the ones who will be adversely impacted by the said ruling of the Commissioner. 19. We feel that deciding the higher rate of tax at the instance of a new manufacturer, who is exempted from tax to make the Ruling applicable to those who are not exempted from tax was not a correct approach. It is significant that the respondent No.5 was impleaded in this case on 7.1.2015, but although they have secured a major price advantage by not having to pay the 12.5% tax on the same product, they have kept away from the Court proceeding although notices were dispatched to them on 24.2.2015, under Regd. Post with A/D. 20. As earlier noted, the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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