TMI Blog2019 (2) TMI 1882X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax, at the rate of 12 % - the goods in question i.e. Harpic and Mortein are squarely covered under Entry 20, Part-A of Schedule-II of UPVAT Act. Petition allowed. - Writ Tax No. 850 of 2017 - - - Dated:- 28-2-2019 - BHARATI SAPRU and PIYUSH AGRAWAL, JJ. Manjari Singh and Kunal Ravi Singh for the petitioner. C. B. Tripathi , Special Counsel, for the respondents. JUDGMENT By means of the present writ petition, the petitioner has challenged the reassessment proceeding initiated against it granting permission vide order dated 24.11.2017 passed by respondent-3 which reopened the completed assessement for assessment year 2009-10 under UPVAT Act. 2. Brief facts of the case are that the petitioner is a registered firm engaged in business of purchase and sale of cosmetic goods, soap, glucose, edible oils, pesticides etc. 3. It has been avered that the petitioner has been appointed as distributor of several products manufactured by Reckitt Benckiser (India) Pvt. Ltd. which manufactures various household products including insecticides such as Mortein, Pesticides such as Harpic and Lizol, Drugs and medicines including Disprin, Dettol etc. The peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, imposed tax at the rate of 4% - 5 % and same was deposited by the petitioner. 8. Learned counsel for the petitioner submits that the active ingredient of Harpic is Hydrochloric Acid, which is a well-known disinfectant and in addition, it has other ingredients like Bis/2 Hydroxyethyl Oleylamine, Alkyl Trimethyl Ammonium Chloride, Butylated Hydroxy Toluene, Methyl Salicylte and other chemicals, used for disinfecting, the surface on which it is applied. Harpic is effective in killing various Micro-organisms (germs/ bacteria) like S. aurus, E.coli, S. flexnari, S. faecalis, K. pneumoniae, and C. albicans, which are generally found in toilet bowls that cause Skin, soft tissue and mucous membrane infections, Gastroenteritis, Inflammation of colon, bacillary dysentery, Diarrhoea; etc. Hence, it is apparent that the function of Harpic is disinfectant and it has additional function of completely removing tough stains from the surface on which it is applied. Hence, it is recommended for disinfecting (primary function) and cleaning toilets (additional function) and other porcelain surfaces. 9. He further submitted that Government recognizes Harpic as disinfectants. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court laid stress on the fact that reports of experts certify the nature of the products in question, which ought to be taken as sufficient evidence in support of classification. Relevant paragraphs of the Judgment in Ponds India Ltd Vs. Commissioner Trade Tax, Lucknow, 2008 (8) SCC 369 is extracted below for ease of convenience:- 72. Furthermore, an expert in the field has also given his opinion in favour of the appellant. This Court in Quinn India Ltd. v. CCE classified a product relying, inter alia, on the report of the clerical (sic chemical) examiner as under: (SCC p. 563, para 7). 7. .. The Tribunal has completely ignored the report of the Chemical Examiner dated 6 10 1981 and the final opinion of the Chief Chemist dated 2 4 1992 coupled with the classification issued by the Department regarding use of wetting agents in the textile industries falling under Sub Heading 3402.90. Test reports of the Chemical Examiner and Chief Chemist of the Revenue unless demonstrated to be erroneous, cannot be lightly brushed aside. The Revenue has not made any attempt to discredit or to rebut the genuineness and correctness of the report of the Government, Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t disinfectants are in the nature of pesticides. It was held by the Supreme Court that a disinfectant which, therefore, is used for killing may broadly be covered in the word pesticide . Disinfectants may be of two types; one to disinfect and other to destroy the germs, the former, i.e., those products which are used as disinfectant for 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 . 17. Learned counsel for the petitioner further submits that the Harpic sold by the petitioner is squarely covered by the judgement of the Bombay Chemicals (supra), which is disinfectant and has very high capability to kill bacteria and germs (99.999999%) as is clear from the Test Reports. 18. Mortein is an insecticide and the primary/active ingredient of Mortein is the insecticide d-trans allethrin. This Court on a consideration of the various judgements of the Hon'ble Supreme Court as well as the High Courts has held that Mosquito Coils including Mortein Coils would fall within the Entry Pesticides and Insecticid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been issued by Government of India, Ministry of Agriculture which leave no scope of doubt that allethrin which is used in the product sold by the petitioners is 'insecticide'. Insecticides Rules, 1971 provides for the manner of labelling. Labelling/packing of the products of the petitioner is as per the afore-quoted Rule 19(4) of the Rules. 25. D-Trans 'allethrin' and 'pallethrin' are used in manufacturing the goods which have been described as household 'insecticides' on their products as per the statutory requirement under Insecticides Act. In the absence of any specific entry relating to Mosquito Repellent/Mosquito Destroyer and at the same time there being an entry mentioning 'insecticides', it can reasonably be said that an ordinary person will ordinarily understand the product of the petitioners falling under category of the insecticides. 26. These facts coupled with the Principles enunciated in the decisions referred to above leave us in no doubt that the products sold by the petitioners are basically in the categories of 'insecticides' particularly in the absence of any indication in the Notification in ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (C) No. 1377 of 2010 (Reckitt Benckiser India Pvt. Ltd. Vs. State of Assam, High Court of Rajasthan Bench at Jaipur in S.B. Sales Tax Revision/ Reference No. 11 of 2012 (Reckitt Benckiser (India) Ltd. Vs. Assistant Commercial Taxes Officer Anti Evasion and others and judgment of Supreme Court in Special Leave to Appeal (C) No. 18473 of 2014 (State of A.P. Vs. Reckitt. Benckiser India Ltd.) and M/s Bombay Chemicals Pvt. Ltd. Vs. Collector of Central Excise, 1995 (2) Supp. SCC 646. 21. The counsel for the petitioner has further relied upon the judgment and order of this Court passed in Sales/Trade Tax Revision No. 91 of 2014, (The Commissioner Commercial Tax Vs. M/s Reckitt Benckiser (India) Ltd., wherein this Hon'ble Court after referring the various judgements of Supreme Court and High Court have come to the conclusion that goods in question is covered under Schedule-II, Part A under Entry 20 of UPVAT Act. 22. Learned counsel for the petitioner further submits that in the case of M/s Reckitt Benckiser (India) Ltd., itself on whose behalf the petitioner is selling the goods in the State of Uttar Pradesh, various High Courts have decided the issue that Harpic and Mortein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all maintainable and is liable to be dismissed. 27. The Court has perused the record and heard learned counsels for the parties. 28. For proper consideration of the matter relevant entries of Schedule II, Part A Entry 20 and Schedule V of UPVAT Act, are quoted below :- Entry 20 of Part -A of Schedule II to the UPVAT Act reads as under: Chemical fertilizers, except those which are described in entry No. 26 of the Schedule-I; micro-nutrients and also plant growth promoters and regulators, herbicides, rodenticides, insecticides, weedicide and pesticides. Schedule V to the UPVAT Act reads as under: 1. All goods except goods mentioned or decsribed in Schedule-I, Schedule-II, Schedule-III and Schedule-V of this Act. 29. Schedule-II, Part A, Entry 20 of UPVAT Act provides levy of 4%-5% tax on the sale of goods mentioned therein which includes all all kind of insecticides and pesticides. Schedule-V provides levy of tax at the rate of 12% on those goods which are not mentioned in any of the Schedule-I,II, III, IV. 30. The High Court of Andhra Pradesh in Tax Revision No. 10 of 2007 (M/s Reckitt Benckiser (India) Ltd. Vs. State of Andra Pradesh held Harp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Form-25 issued under Rule 70 of the Drug Rules, they do not fall under entry 88 and, therefore, the question of these goods coming within the excluded category under entry 88(b) does not arise. Both the goods in question, therefore, are exigible to tax at 4% but not at 12.5%. 31. Guwahati High Court in the case of W.P. (C) No. 1377 of 2010 (Reckitt Benckiser (India) Pvt. Ltd. Vs. State of Assam held the following observations: 1. By this batch of writ petitions, W.P. (C) No. 1377 of 2010, W.P. (C) No. 1378 of 2010, W.P. (C) No. 1379 of 2010 and W.P. (C) No. 1377 of 2010, the petitioner company, registered under the Companies Act and engaged in manufacturing, sale and marketing of various household products including insecticides such as Mortein mosquito coils, mats, vaporizers and disinfectants like Harpic and Lizol dispirit and Dettol antiseptic liquid, cherry blossom shoe polish, etc., has challenged the assessment of the respondents authorities of the products of Harpic, Lizol and Dettol at the higher rate of these products at 12.5 per cent VAT charges classifying under the residual items under entry No. 1 of the Fifth Schedule of the Assam Value Added Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nished supporting documents/certification from experts, viz., SGS India Private Limited which is an affiliate of Societe Generale de Survellience S. A V Geneva, the world's independent international testing, verification and certification organisation, which hold accreditation from National Accreditation Board for Testing and Calibration Laboratories, Ministry of Science and Technology, New Delhi and is approved, among others, by the Bureau of Indian Standards, New Delhi and the Ministry of Environment and Forests, Government of India (under Environment Protection Act, 1986), New Delhi, to substantiate the contention that Harpic is a disinfectant. 23. The aforesaid contention of the petitioner that Harpic is a disinfectant was not doubted or contradicted by the Revenue. Similarly, the primarily disinfectant quality of Lizol , supported by expert opinion also remained unrebutted. 24 . The petitioner also contended that similarly, Lizol has the active ingredient benzalkonium chloride solution I.P. and other ingredients fragrance-BBA P 2062 M, propylene glyeel LP, sodium bicarbonate I.P, tartazine yellow, fatty alcohol ethoxylate, lsoprpyl alcohol I.P. and other chem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to tax under entry No. 19 of Part A of the Second Schedule to the Assam VAT Act and Dettol would be liable to be assessed as an item under entry 21 of the Fourth Schedule to the Assam VAT Act and will not fall within the excluded category under the Explanation. 32. In S.B. Sales Tax Revision/ Reference No. 11 of 2012 (Reckitt Benckiser (India) Ltd. Vs. Assistant Commercial Taxes Officer Anti Evasion and others, the High Court of Rajasthan has held as follows:- 3 . The brief facts noticed are that a survey came to be conducted at the business premises of the assessee on 03.05.2007 by the Anti Evasion Wing of the revenue wherein, it was noticed that the assessee is manufacturing/producing Anti- Mosquitoes devices and repellents , Dettol Soap , Brasso , Harpic Toilet Cleaner , Lizol Floor Cleaner , Manson Polish , Robin Blue , Ret Kill , Teenapole , Drugs Medicines etc. and during the course of survey and further investigation material was collected on the basis whereof the Assessing Officer noticed that the assessee is selling Electrically Operated Anti-mosquito devices repellents, Electrically Operated Anti-Mosquito Mat, AntiMosquito Coil, Rat Kill, Harpi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clerical (sic chemical) examiner as under: 7. ...The Tribunal has completely ignored the report of the ChemicalExaminer dated 06 10 1992 coupled with the classification issued by the Department regarding use of wetting agents in the textile industries falling under Sub Heading 3402.90. Test reports of the Chemical Examiner and Chief Chemist of the Revenue unless demonstrated to be erroneous, cannot be lightly brushed aside. The Revenue has not made any attempt to discredit or to rebut the genuineness and correctness of the reports of the Government, Chemical Examiner and Chief Chemist. Thus, the reports are to be accepted along with other documentary evidence in the form of classification issued by the Department regarding use of wetting agents in the textile industries to hold that the product Penetrator 4893 possessed surface active properties and, therefore, is covered by Exemption Notification No. 101/66 dated 17 6 1966 as amended from time to time. 73. In this case also, the report of the chemical examiner is in favour of the assessee. Furthermore, in a case of this nature, where the Revenue itself has been holding the assessee to be a producer of a pharmaceutica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id as the principal active ingredient. It then noticed the definition of pesticide and disinfectant and observed that, it appears from the above definition that disinfectants are used for killing or inactivating micro organisms, in some literature for oils (containing high boiling tar acid) are mentioned in pesticide manual . But 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 term 'pesticides'. 6. 'Pesticide' has been defined in Butterworths Medical Dictionary, 2nd Edn., as a comprehensive word to include substances that will kill any form of pests, e.g., insects, rodents and bacteria . The term 'pesticide' includes a large variety of compounds of diverse chemical nature and biological activity grouped together usually on the basis of what kind of pests they are used to destroy or eliminate. Under the US Federal Environment Pesticide Control Act, the term 'pesticide' has been defined to include (1) any substance ormixture of substances intended for preventing, destroying, repelling, or mitigating a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of construction of an exemption notification is that it should be construed strictly, but once a goods 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 construing such notification narrowly. Item 18 is an exemption notification. As stated earlier, it mentions broad categories of goods which are entitled to exemption. Once a goods is found to fall even narrowly in any of these categories, there appears no justification to exclude it. The test of strict construction of exemption notification applies at the entry, that is, whether a particular goods is capable of falling in one or the other category but once it falls then the exemption notification has to be construed broadly and widely. Each of the words insecticides, pesticides, fungicides or weedicides are understood both in the technical and common parlance as having broad meaning. Therefore, if any goods or items satisfy the test of being covered in either of the expression, then it is entitled to exemption. The broad and basic characteristic for exemption under the notification is that the goods must have the property of killing germs an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lizol and the prophylactic qualities of Dettol have not been denied by the revenue authorities. The only stand taken by the revenue authorities is that these were not dominant nature of the products. However, it cannot be denied that these disinfectant and the prophylactic qualities of the aforesaid products are not insignificant, rather because of the aforesaid disinfectant and prophylactic qualities, the aforesaid products are used. It is now well settled principle of law that when two views are possible, the one which favours assessee should be adopted. In Mauri Yeast India Private Limited v. State of Uttar Pradesh, MANU/SC/7514/2008 : (2008) 5 SCC 680.: 46. It is now a well settled principle of law that when two views are possible, one which favours the assessee should be adopted.(See Bihar 4: MANU/SC/0642/1997 : (1997) 5 SCC 289 Here, in the present case, there are two possible view: either to take the products Harpic and Lizol to be merely stain remover and cleansing agents or as disinfectants and in respect of Dettol, to treat it as a mere toilet preparation or a drug or medicine. Since there are sufficient materials to consider Harpic and Lizol as disinfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions should be allowed and the products Harpic and Lizol having been declared to be pesticides as discussed above, would be liable to tax under Entry No. 19 of the Part A of the Second Schedule of the Assam VAT Act and Dettol would be liable to be assessed as an item under Entry 21 of the Fourth Schedule of the Assam VAT Act and will not fall within the excluded category under the Explanation. 26 . The Apex Court in the case of Ambey Laboratories v. Collector (supra) was considering the case of Liquid Phenyle an identical product and, held in a case of Central Excise Tariff Act, 1985 that Liquid Phenyle is disinfectant. 27. The Division Bench of Andhra Pradesh High Court in the case of (assessee) M/s. Reckitt Benckiser (India) Ltd., v. State of Andhra Pradesh (supra) was also considering case under Andhra Pradesh VAT Act and vide judgment dt. 13.06.2013, of the same product being Mortein , Lizol Harpic while the claim of the assessee was that it falls under Entry 20 of Schedule (iv) of the Andhra Pradesh Value Added Tax payable @ 4% but the claim of the revenue was that it is exigible to tax in Schedule (V) of the Act under rate of 12.5% and taking into cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that Harpic and Mortein Coil, manufactured and sold, are to be classified under the heading Insecticides/ Pesticides and Disinfectant , and are subject to tax at the rate of 4% to 5% and therefore, the Revenue's contention that the item sold by the petitioner should be taxed as residue entry at the rate of 12.5% to 13.5% has been rejected. 34. The Apex Court has dismissed the Special Appeal filed by the State of Andhra Pradesh against the judgement order passed by the Andhra Pradesh High Court in S.L.P. No. 18473 of 2014 (State of A.P. Vs. M/s Reckitt Benchiser (India) Pvt. Ltd). 35. This Court in T.T.R. No. 91 of 2014 (supra), after a very detailed discussion, has held that Harpic sold by the manufacturer, i.e., M/s Reckitt Benckiser (India) Pvt. Ltd. is to be taxed @ 4%5%. 36. When a pointed question was put to the learned Special Counsel as to whether any special appeal before the Apex Court has been filed against the judgement order dated 09.10.2018 passed by this Court, the answer was in negative. 37. The petitioner before this Court has been appointed as a Distributor of the manufacturer (i.e. Reckitt Benchiser India Pvt. Ltd) of Harpic and Mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase and sale of Lizol / Harpic. For the assessment year in question, the Assessee-Opposite Party has charged and deposited the tax on the sale of Harpic and Lizol treating the same are covered under Schedule-II, Part-A, Entry No. 20 of VAT Act at the rate 4% - 5%. .... Per contra, learned counsel for the Assessee-Opposite Party has placed reliance of the judgments of the Apex Court as well as of the High Courts. Learned counsel for the assessee-Opposite Party has placed reliance of a judgment reported in (1995) Suppl. 2 SCC 646 in the case of the Bombay Chemicals Pvt. Ltd. v. Collector of Central Excise. .............. Learned counsel for the Assessee-Opposite Party submitted that the Revision has been filed by the Revenue against the Judgment dated 17.03.2013, passed by the Commercial Tribunal, Ghaziabad, who has allowed the Appeal filed by the assessee and has upheld and held that the classification of Harpic Disinfectant Toilet Cleaner ( Harpic ) and Lizol Disinfectant Floor Cleaner ( Lizol ) under Entry 20 of Part-A of Schedule II to the UPVAT Act as an insecticide or pesticide subject to VAT @ 4%/5% for Assessment Year 2008-09 and reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Ponds); (d) definition under the relevant statute Section 3 (b) ofthe Drugs and Cosmetics Act (definition of drugs) read with Rule 126 of the Drugs Cosmetics Rules; (e) Licenses issued for Harpic and Lizol by the Drug Controller, Government of India treating them as a disinfectant; (f) HSN Classification; (g) Technical and Dictionary meaning; and (h) common/commercial parlance etc. (taken note of by theHon'ble Supreme Court in Bombay Chemicals and by various High Courts (in paras 26 and 27 below). These principles have been recognized by the Supreme Court in Ponds India Ltd. v. Commissioner of Trade Tax, Lucknow (2008) 8 SCC 369. Based on such classification, the assessee-dealer had collected VAT @ 4%/5% and deposited VAT @ 4%/5% with the Revisionist. The monthly as well as annual returns of the assessee-dealer were accepted for years. Now, the Revisionist has questioned the classification adopted by the Department, claiming that Harpic and Lizol ought to be classified under the residual entry i.e. Schedule V to the UPVAT Act, which reads as: Schedule V 1. All goods except goods mentioned or described in Schedule I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette. In terms of Section 3 (b) (ii) of the D C Act, Government of India is required to notify such goods and Government of India by its Notification No. S.O. 1335 dated 02.06.1961 read with Notification No. X. 11013/2/72-D dated 09.07.1975 has notified Disinfectant fluids from synthetic or naturally occurring substances by virtue of their composition possessing disinfectant properties or with claim to possess disinfectant properties as drugs. Accordingly, for manufacture of Harpic and Lizol, a drug license is required to be obtained under D C Act as it is a substance used for the destruction of vermin or insects which cause disease in human beings. The Respondent has accordingly obtained drug licence under the D C Act. Even the labels of Harpic and Lizol are required to comply with the provisions of the Drugs Cosmetics Rules framed under the Drugs and Cosmetics Act, 1940. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 101/66 dated 17 6 1966 as amended from time to time. 73. In this case also, the report of the chemical examiner is in favour of the assessee. Furthermore, in a case of this nature, where the Revenue itself has been holding the assessee to be a producer of a pharmaceutical product, the burden would be on the Revenue to establish that the goods cease to fall under a given entry. For the said purpose, no material was placed by the Revenue which was imperative. In support the learned counsel for the assessee-dealer placed the Dictionary meaning. Dictionary meaning including technical dictionaries are a relevant factor, as held in Ponds India by the Hon'ble Supreme Court and disinfectant is defined as: Webster Comprehensive Dictionary: as a substance used to disinfect or to destroy the germs of infectious and contagious diseases . In the Concise Oxford Dictionary of Current English, disinfectant is defined as: a commercially produced chemical liquid that destroys germs . In Encyclopedia Britannica, Volume 4, it is explained to mean: any substance, such as creosote or alcohol, applied to inanimate objects to k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in hospitals for cleaning walls etc. or sterilizing instruments. They are also used in agriculture for disinfecting seeds. The group includes sanitisers bacteriostats and sterilisers. Further, even as per the HSN Explanatory Notes it is provided that Disinfectants are used in hospitals for cleaning walls . Thus, such disinfectants may also be used for cleaning and merely because they are also used for cleaning, it cannot be said that it is not a disinfectant. Common parlance evidence: The primary function of Harpic and Lizol is to act as a disinfectant and in addition to disinfecting/killing bacteria and germs, they also clean. Consumers purchase Harpic and Lizol for their disinfectant properties and expect it to, also clean; therefore as a secondary use, ingredients for cleaning has been added to Harpic Lizol. To extend the logic of the Revisionist, products which have multiple attributes cannot be classified under the specific entry and has to be classified under the residual entry tablet for cold and fever, cannot be classified as a drug, since it has multiple attributes and has to be classified under the residual entry only. There would be thousands of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court will be loath to say that it will not interfere. Re: Burden to prove classification in a particular entry is always on the Revenue: The burden to prove that a particular item falls under a specific entry is on the Revenue and not the assesse. The Hon'ble Supreme Court in Union of India Vs. Garware Nylons Ltd. 91996 (10) SCC 413); HPL Chemicals Vs. Commissioner of Central Excise) 2006 (5) SCC 208) and Voltas Ltd. Vs. State of Gujarat (2015 (7) SCC 527) has held that the burden of proof is on the taxing authority to demonstrate that a particular class of goods or item in question is taxable in the manner claimed by the Revenue and that a mere assertion in that regard is of no avail. The said principle has been so stated by the Hon'ble Supreme Court in para 26 of Voltas Ltd. which is extracted herein below for ease of reference: Qua the issue of classification of goods to determine the chargeability thereof and the rates of levy applicable, it is no longer res integra that the burden of proof is on the taxing authority to demonstrate that a particular class of goods or item in question is taxable in the manner claimed by them and that mere assertio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercial parlance, etc. The Counsel appeared before the High Court contended that Harpic and Lizol are manufactured under license under the Drugs Act. The Special Counsel nextly submits that Harpic and Lizol are manufactured under licence under the Drugs Act; and they are therefore drugs falling under entry 88 but being toilet preparations stand excluded therefrom. A careful reading of entry 88(b) would show that Harpic and Lizol would be odd men out among the goods mentioned in the entry. The said entry speaks of only the products capable of being used as cosmetics and toilet preparations. Illustratively it mentions tooth pastes, tooth powders, cosmetics, toilet articles and soaps. It does not deal with toilet cleaner or floor cleaner used as disinfectants to kill bacteria and germs. When the language of the taxing entry is plain, it is not for the Courts, to introduce words to uphold the assessment. The High Court, however, has observed as follows: We cannot read Harpic and Lizol as being included in toilet preparations to bring them under the excluded category under entry 88(b) of IV Schedule to the VAT Act. Even if the manufacturer obtained drug licence, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounters of departmental stores. We therefore reject the submission of the State that Harpic and Lizol fall under entry 88 merely because they are manufactured under drug licence. In view of the aforesaid, the High Court reached at a conclusion and held that Harpic and Lizol are disinfectants capable of destroying germs and microorganisms like Escheriachia coli, Staphylocococcus aureus, Enterococcus hirae, Pseudomonas aeruginosa and Candida albicans etc. Being disinfectants they fall within the category of pesticides covered by entry 20 of IV Schedule. Against the aforesaid judgment of the Andhra Pradesh High Court dated 13 June 2012, a Special Leave Petition was filed by the department which was dismissed on the ground of delay. Similar issue was also considered by the Division Bench of the Guwahati High Court in case bearing Writ Petition No. 1377 of 2010, Reckitt Benckiser India Pvt. Ltd. v. The State of Assam and Others, vide judgment and order dated 18.9.2012. A Division Bench of Guwahati High Court has held that harpic and Lizol having been declared to be pesticide, would be liable to Tax under Entry No. 19 of the Part A of the Second Schedule of the Assam VA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the High Courts and Supreme Court. Respectfully following the said decisions, the revision petition filed by the department is dismissed as no question of law is involved and it is hereby held that Harpic and Lizol are covered under Schedule-II, Part A, Entry No.20 of UP VAT Act as such the same are classified items. I find no error in the impugned judgment and order of the Tribunal. The Revision Petition is, accordingly, dismissed. 42. Keeping in mind the principles of law laid down by Supreme Court, this Hon'ble Court as well as other High Courts i.e. Andhra Pradesh, Guwahati and Rajasthan as indicated in the writ petition hereinabove, we find that the goods in dispute are squarely covered and can easily be classifiable under pesticides as per Entry No. 20, Part -A of Schedule II of UPVAT Act. 43. The record reveals that the assessing authority while passing the original assessment order have considered all relevant material and rightly imposed tax at the rate of 4 %, therefore, there is no fresh or tangible material to form a reasonable belief that the turnover has escaped assessment, which could legally be permitted for initiating the reassessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere pretence. Applying the above principle, this court, in the case of Rathi Industries Limited Vs. State of U.P. and another has further elaborated- From a perusal of the aforesaid, it is apparently clear that the words reason to believe in Section 21 of the U.P. Trade Tax Act conveys that there must be some rational basis for the assessing authority to form a belief that the whole or any party of the turnover of a dealer has for any reasons escaped assessment. Such reason or reasonable ground to believe that the whole or any part of the turnover had escaped assessment must be germane to the formation of the believe regarding escaped assessment. Such reasons or grounds must have a nexus with the formation of the belief. The approach has to be practical and not pedantic. In absence of any material it was not open to the authorities to assume existence of such facts for the purpose of acquiring jurisdiction and to later, in the course of reassessment proceedings to conduct an inquiry as to its existence or otherwise. The Supreme Court in the case of Arun Kumar Ors Vs. Union of India Ors (2007) 1 SCC 732 has categorically held : 74. A jurisdictional fact is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of mind during the assessment would not be justifiable ground for re-initiating proceeding under Section 29 (7) of the Act. 45. The respondent's counsel has argued that the original assessment order was passed without application of mind and relied upon paragraph no. 31 of the counter affidavit and has made the following averments:- .......... The assessing authority while passing original assessment order did not consider the relevant notification and there is no application of mind regarding taxability. ........ 46. The argument of the counsel for the respondent is in teeth of the judgement of the Apex Court in the case of State of U.P. Vs. Arayaverth Chawal Udyog Limited (2015) 17 SCC 324, wherein, in paragraph nos. 30 31, the Apex Court has specifically held as under:- 30. In case of there being a change of opinion, there must necessarily be a nexus that requires to be established between the change of opinion and the material present before the assessing authority. Discovery of an inadvertent mistake or nonapplication of mind during assessment would not be a justified ground to reinitiate proceedings Under Section 21(1) of the Act on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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