TMI Blog2024 (1) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the use of memory cards is not restricted to recording sound and that since memory card can be used in a variety of devices, to increase functionality, the same cannot be said to be covered under any of the specific entries. A bare perusal of the aforesaid determination would reveal that the same is merely the opinion of the Commissioner and is not supported by any cogent reasons and or technical/expert opinion. It cannot be emphasized enough that in indirect tax matters, long standing classification cannot be disturbed merely on personal opinion/knowledge. The revenue has to discharge its burden to prove that the change in classification is warranted and necessary by adducing cogent and corroborating evidence. Mere assertion or personal opinion, even of the Commissioner, without any supporting evidence is of no use or value. Since the revenue has not discharged its burden to show that the good in question, i.e. memory cards, which is undisputedly media which can record sound and other phenomena, would not be covered under the specific entry of either Entry No. 10 or Entry No. 3 of Part A to Schedule IV to the RVAT Act, the levy of additional tax and interest, merely on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 per cent on Computer system and peripherals, computer printers excluding multifunctional devices electronic diaries ? In STR Nos. 114-115/2020 and in STR Nos. 1-6/2023: (a) Whether the Memory Cards are not Prepared unrecorded media as per entry no. 10 of Schedule-IV of RVAT Act-2003 made available since introduction of RVAT in the State w.e.f. 1.4.2006? (b) Whether the notification no. 2016-187 dated 08.03.2016 is not clarificatory in nature of entry no. 10 of Schedule-IV of RVAT Act-03? (c) Whether the determination order of Commissioner isvalid one after passing of nine (9) years? In STR Nos. 156-158/2023: (a) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in holding that Memory Cards are not IT products covered under Entry No. 10 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 percent on Prepared unrecorded media for sound recording or similar recording of other phenomena including Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T Products', as specified in Entry No. 65 of Schedule IV to the RVAT Act and accordingly discharging its VAT liability by treating the same as prepared unrecorded media , as classifiable under Entry 10 of Part A of Schedule IV of the RVAT Act. Learned counsels further contends that all the authorities below have erred in law by classifying the goods in question under the residuary head and not the specific head and therefore erroneously imposed additional tax and interest upon the petitioner-assessee. In support of their contention that memory cards would form part of 'I.T. Products', learned counsel for the petitioner-assessee made the following submissions: 4.1. The first submission of learned counsels for the petitioner-assessee is that the revenue has not discharged its onus to prove that memory cards would not be included in the specific entry of Entry 10 of Part A of Schedule IV to the RVAT Act. It is submitted that neither any expert / technical opinion was sought nor any evidence was brought on record to prove their point. It is submitted that as per settled position of law, onus or burden to show that a product falls within a particular tariff item is alw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious products such as Compact Disc (for short CD ) and Digital Versatile Disc (for short DVD ) shall be included in the said entry. It is submitted that the inclusive clause cannot be interpreted to restrict the scope of entry to only CD or DVD as the purpose of the inclusive clause is to include all such products which are capable of sound recording or similar recording of other phenomena , within the scope of the said entry. 4.4. The fourth submission of learned counsel for the petitioner-assessee is that the Entry No. 10 of Part A of Schedule IV to the RVAT Act cannot be restricted only to those media which are only capable of recording sound as the entry itself contains similar recording of other phenomena . It is further submitted that even the specifically included items, i.e. CD and DVD, are capable of recording not just sound, but all other phenomena as well and therefore there exists no reasonable nexus to preclude memory cards from the specific entry. 4.5. The fifth submission of learned counsel for the petitioner-assessee is that the impugned orders of the authorities suffer from total non-application of mind. It is submitted that the authorities below merel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is capable of being used in a fungible manner like in the case of memory cards. Reliance is placed on Gauhati High Court judgment of Sterlite Optical Technologies Ltd. Vs. Oil India Limited Ors. reported in [(2008) 14 VST 9 (Gauhati)], Madras High Court judgments of State of Tamil Nadu vs. CMC Limited reported in [(2014) 75 VST 413 (Mad.)], Canon India Pvt. Ltd. vs. State of Tamil Nadu reported in [(2015) 80 VST 483 (Mad.)], and judgment of this Court in Compuage Infocom Limited and Ors. vs. The Assistant Commissioner, Rajasthan, Anti-Evasion-I and Ors. (S.B. STR No. 182/2017; decided on 30.05.2023; Neutral Citation: 2023/RJJP/12108). 4.6. The sixth submission of learned counsels for the petitioner-assessee is that by virtue of Notification No. 2016-187 dated 08.03.2016, there was an amendment in the RVAT Act and the Entry No. 10 of Part A of Schedule IV to the RVAT Act was substituted and the amended entry, which specifically included Memory Card , read as follows: Data storage and recording devices including Compact Disc (CD), Digital Versatile Disc (DVD), Pen Drive, SD card, Memory Card, etc. It is contended that this amendment clearly establishes that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her submitted that data storage devices, including memory cards, were only inserted in Part A of Schedule IV to the RVAT Act with effect from 08.03.2016 and the said amendment was not stated to be retrospective in nature. Learned counsel for the revenue submits that the notification dated 08.03.2016 was consciously silent on the retrospective application of the amendment and as per settled position of law, an amendment is always prospective in nature unless expressly stated otherwise. Reliance in this regard is placed on Apex Court judgment of Eureka Forbes Limited vs. State of Bihar and Ors. reported in (2011) 15 SCC 149 . On the issue of reassessment, learned counsel for the revenue has relied on judgment of Division Bench of this Court in Rajasthan Felts Manufacturing Company v. State of Rajasthan reported in [(1980) 45 STC 274 (Raj)]. Learned counsel for the revenue has also relied on Chief Minister s finance speech made on 08.03.2016 while introducing State Budget for the year 2016-17 wherein it was specifically stated that the VAT leviable on SD cards, memory cards, and pen drive, was being reduced from 14.5% to 5.5%. Learned counsel for the revenue has placed reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner-assessee was regularly filing the returns as required under law and the jurisdictional assessing authority had accepted said classification for several years. It was only after the survey, which was conducted on 08.10.2015, that the opinion of the respondent-revenue changed - after about 9 years only on account of the determination order dated 15.09.2015, passed under Section 36 of the RVAT Act by the Commissioner, Commercial Taxes Rajasthan, and the long-accepted classification was abandoned. On perusal of the impugned orders, it is apparent that the authorities merely relied on the determination order while adjudicating the claim of the petitioner-assessee. 10. Since the genesis of the entire controversy is the determination order dated 15.09.2015, it is considered necessary to adjudge the same, especially since the validity of the same is also challenged in some of the STRs. It is also deemed necessary to consider the context in which the application for determination was filed by the assessee. 10.1. Before 09.03.2015, cellular telephones were covered under Entry 12 of Schedule IV to the RVAT Act and parts and accessories thereof were covered under Entry 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ट है कि CD, DVD, Magnetic Tape Cassette for Sound recording इस प्रविष्टी में आच्छादित होने के कारण 5 प्रतिशत कि दर से कर योग्य है | किन्तु Memory Card, (Micro S.D S.D Card) Video Cassette उक्त श्रेणी में शामिल नहीं है | इसी प्रकार Recorded CD, Recorded DVD भी उपरोक्त श्रेणी में शामिल नहीं है | मेमोरी कार्ड/एस.डी कार् ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81;ड/एस.डी कार्ड का विभिन्न उपकरणों में अलग-अलग उपयोगिता होने के कारण अधिनियम कि अनुसूची IVA के क्रम संख्या 28 (Parts and Cassette..) में आच्छादित नहीं है | अतः मेमोरी कार्ड/एस.डी कार्ड भिन्न-भिन्न उपकरणों में अलग-अलग उपयोग होने के कार ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #2361; अभिनिर्धारित किया जाता है की CD, DVD, Magnetic Tape Cassette for Sound recording राजस्थान मूल्य परिवर्दित कर अधिनियम, 2003 कि अनुसूची IVA के प्रविष्टी संख्या 10 आच्छादित होने के कारण 5 प्रतिशत की दर से कर योग्य है तथा मेमोरी कार्ड/एस.डी कार्ड (Memory Card, (Micro S.D S.D Card) तथा विडि ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good in question, i.e. memory cards, which is undisputedly media which can record sound and other phenomena, would not be covered under the specific entry of either Entry No. 10 or Entry No. 3 of Part A to Schedule IV to the RVAT Act, the levy of additional tax and interest, merely on the basis of determination order passed by the Commissioner, cannot be sustained. 12. Even otherwise, the order(s) impugned of the learned Tax Board and all the authorities below deserves to be quashed and set aside for the following additional reasons:- 12.1. Because the reliance placed by all the authorities below on the determination order dated 15.09.2015 is onerous. The Appellate Authority and the Tax Board are discharging quasijudicial/judicial functions and no departmental circular, clarification or determination order is binding on such bodies when exercising quasi-judicial/judicial functions. Reliance in this regard can be placed on Apex Court judgment of Orient Paper Mills Ltd. vs. Union of India: AIR 1969 SC 48. 12.2. Because the notification dated 08.03.2016, which incorporated memory card specifically in Entry 10 of Part A of Schedule IV to the RVAT Act, though prospectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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