JUDGMENT Aravind Kumar, J. - The assessee is questioning the correctness and legality of the order passed by the Authority for Clarifications and Advance Ruling in order No. AR. CLR. 436/2005-06 dated April 18, 2006 under section 16 of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as, "the tax" for brevity). The facts leading to the filing of this appeal are that the appellant is having an industrial unit at Kodigehalli village, Doddaballapur taluk engaged in extraction of chilly oleoresin from dry chillies. It was contended by the appellant before the Advance Ruling Authority that, by virtue of the process carried out for the extraction of oleoresin, parts of the dry chilly that remains thereafter is termed or called in common parlance as dry chillies, skinned/cut chilly and crushed chilly or spent chilly. It was the contention of the appellant that under section 3 of the Act, the charging section, sub-section (1) prescribes that tax is to be levied on every sale of goods in the State by registered dealer or dealer liable to be registered in accordance with the provisions of the Act and section 4 of the Act prescribes the liability to tax as also the rate of tax. It was contended that as per section 4(1)(a)(ii) of the Act, the rate of tax applicable to the goods specified in the Third Schedule is four per cent and goods which are not specified in the Schedule or in respect of which no notifications are issued either granting exemption attract tax at 12.5 per cent. It was contended that the Third Schedule as it stood originally incorporated in the Act with effect from April 1, 2005 specifying categories of goods at Sl. Nos. 1 to 81 and with reference to the product in question, the entry is at Sl. No. 61 which reads as under : "61. Spices in all forms including jeera (cumin seeds) methi, poppy seeds (kaskas), coriander (dhaniya), shajeera, somph, katha, azwan, kabab chini, bhojur phool, tejpatha, japatri, nutmeg (marathamoggu), kalhoovu, aniseed, turmeric, cardamom, pepper, cinnamon, dal chinny, cloves, tamarind and dry chillies." It was submitted that the Third Schedule was substituted by a new Schedule with effect from April 1, 2006 and the spices are specified at Sl. No. 89 which is the enlarged version of SI. No. 61 as extracted above and the said entry at SI. No. 89 which is the enlarged version of SI. No. 61 as extracted above and the said entry at SI. No. 89 reads as under : "89. Spices in all forms including jeera (cumin seeds), methi, poppy seeds (kaskas), coriander (dhaniya), shajeera, somph, katha, azwan, kabab chini, bhojur phool, tejpatha, japatri, nutmeg (marathamoggu), kalhoovu, aniseed, turmeric, cardamom, pepper, cinnamon, dal chinny, cloves, tamarind and dry chillies including cut chillies, spent chillies and chilly seed, but excluding spices in the form of masala powder, instant mixes or other mixtures containing more than one spice or a spice with any other material, wet dates, hing (asafoetida)." The appellant herein submitted an application on April 21, 2006 before the Authority for Clarification on the rate of tax applicable and said Authority held cut chillies, spent chillies and chilly seeds attracts 12.5 per cent tax under section 4(1)(b) of the Act for the period April 1, 2005 to March 31, 2006 and with effect from April 1, 2006, the above goods are eligible to be taxed at the rate of four per cent in view of entry 89 of the Act. It is this order which is assailed in appeal by the appellant contending as follows : (a) the opening words in SI. No. 61 of the old Third Schedule as it existed up to March 31, 2006 under which spices were specified, were "spices in all form" followed by enumeration of different types of spices such as jeera (cumin seeds), methi, poppy seeds (kaskas), etc., and dry chillies. Thus, dry chillies having not been included in SI. No. 61, takes different forms like cut chillies, spent chillies and chilly seeds and accordingly, it is contended that the Advance Ruling Authority was in error in holding that the residuary clause is applicable to the product in question for the period April 1, 2005 to March 31, 2006. It is also contended that in dry chillies, the outer skin alone is processed to extract chilly oleoresin or chilly oil and the remnants thereafter which remains after crushing is to be termed as "crushed chilly/spent chilly" as it consists of the stem, part of the skin and chilly seeds. Thus, it takes a different form of chilly which can be sold as such in the market. Thus, it takes a different form of chilly which can be sold as such in the market. It is also contended that with effect from April 1, 2006 the earlier entry 61 has been amended by insertion of the words "including cut chillies, spent chillies and chilly seeds" in entry 89 but excluding spices in the form of masala powder, instant mixes and other mixtures containing more than one spice or a spice with other materials by Amendment Act, 2006 with effect from April 1, 2006 which in fact includes the present product and thus, the same is also applicable to the period from April 1, 2005 to March 31, 2006 as the product which comes out after extraction is an independent product and sold as such in the market and accepted in common parlance. We have heard Sri Rabinathan, learned counsel appearing for the assessee and Sri Vedamurthy, learned Government Advocate appearing for the respondent. Sri Rabinathan, learned counsel for the appellant, in support of his submissions would press into service the Division Bench decision of this court in Habeeb Proteins & Fats Extracts, Hiriyur, Chitradurga District v. Commissioner of Commercial Taxes, Bangalore reported in [2007] 6 VST 87; [2005] 58 Kar. L.J. 155 (HC) (DB) particularly drawing our attention to para 26 of the judgment. Refuting the contentions of the appellant's counsel, Sri Vedamurthy, the learned Government Pleader, would submit that the order of the Advance Ruling Authority is in consonance with the relevant entry which was in existence as on the said date and for the relevant period, i.e., April 1, 2005 to March 31, 2006, the cut chillies, spent chillies and chilly seeds not having been included in SI. No. 61, the assessee could not claim that the rate of tax would be at four per cent and the authority was justified in holding that it comes within the ambit of the residuary clause as it does not find a place in entry 61 and accordingly, prays that the appeal be dismissed. Having considered the submissions made at the Bar, we find that the following substantial questions of law arise for consideration in view of the appeal having been admitted : (1) On the facts and in the circumstances of the case of the appellant, where the opening words of SI. Having considered the submissions made at the Bar, we find that the following substantial questions of law arise for consideration in view of the appeal having been admitted : (1) On the facts and in the circumstances of the case of the appellant, where the opening words of SI. No. 61 in the Third Schedule as it existed up to March 31, 2006 under which spices were specified were "spices in all forms" the Authority for Clarification and Advance Rulings was right in having held that crushed chilly/spent chilly which are different forms of dry chillies were not within the meaning of "dry chillies" in SI. No. 61 and therefore, in respect of the period prior to April 1, 2006, the goods were liable to tax under section 4(1)(b) at 12.5 per cent ? (2) On the facts and in the circumstances of the case of the appellant, whereby an amendment made with effect from April 1, 2006 the expression "dry chillies" in SI. No. 89 of the Third Schedule to the KVAT Act, 2003 was expanded to include "cut chillies", spent chillies and chilly seeds and the amendment being clarificatory was applicable for construing the expression "dry chillies" in the old SI. No. 61 of the Third Schedule as existed up to March 31, 2006 to include cut chillies, spent chillies and chilly seeds for the said goods to be eligible for levy of tax at four per cent, the Authority for Clarification and Advance Rulings was right in having held otherwise and issued the clarification that for the period prior to April 1, 2006 "cut chillies, spent chillies and chilly seeds" were liable to tax under section 4(1)(b) at 12.5 per cent ? (3) On the facts and in the circumstances of the case of the appellant, where according to common parlance understanding cut chillies, spent chillies and chilly seeds are also regarded as dry chillies and therefore, were within the scope and ambit of the expression "dry chillies" in the old SI. (3) On the facts and in the circumstances of the case of the appellant, where according to common parlance understanding cut chillies, spent chillies and chilly seeds are also regarded as dry chillies and therefore, were within the scope and ambit of the expression "dry chillies" in the old SI. No. 61 of the Third Schedule to the KVAT Act, 2003 as it existed up to March 31, 2006 to be eligible for levy of tax at four per cent, the Authority for Clarification and Advance Ruling was right in having held otherwise and issued the clarification that for the period prior to April 1, 2006, cut chillies, spent chillies and chilly seeds were liable to tax under section 4(1)(b) at 12.5 per cent ? In order to consider the contentions raised by the respective counsel, it would be necessary to extract the relevant provisions of the Act, viz., section 4(1)(b) and the Third Schedule of the Act which came to be amended with effect from April 1, 2006. Insofar as SI. Nos. 61 and 89 as it stood for the period April 1, 2005 to June 6, 2005 and April 1, 2005 to March 31, 2006 has already been extracted herein supra. Section 4. Liability to tax and rates thereof. - (1) Every dealer who is or is required to be registered as specified in sections 22 and 24, shall be liable to pay tax, on his taxable turnover; (b) in respect of other goods, at the rate of (twelve and one half) per cent; It is seen that in entry 61, spices in all forms including the dry chillies finds a place. The Legislature in its wisdom having introduced by incorporating Sl. No. 89 by Amendment Act, 2006 enlarged the scope of the dry chillies by bringing within the ambit of said dry chillies, the cut chillies, spent chillies and chilli seeds within the fold of dry chillies. The question that requires to be examined in the instant case is : "by virtue of the extraction process, whether the remnants of the dry chilly can be sold as a product or commodity independently and is accepted in common parlance as such ?" The process carried out for extraction of oleoresin results in the parts of dry chilly and in trade parlance it is called as skinned/cut chilly or crushed chilly or spent chilly. The crushed chilly consists of stem, a part of the skin and the chilly seeds. This extracted chilly can be used as a product is not disputed by the Revenue. The only ground on which the Revenue is attempting to contend is that, the remnants of the extracted chilly would attract the residuary clause by virtue of non-inclusion of these products, viz., cut chilly, crushed chilly, and spent chilly in entry 61 for the relevant period. When the said product can be sold as such in the market and it is accepted as such in common trade parlance, we are unable to accept the contention of the Revenue that though it partakes of the character of different commodity, only by virtue of its non-inclusion in the entry at SI. No. 61, it cannot be held that residuary clause gets attracted. In this regard, the judgment of this court in the case of Habeeb Proteins [2007] 6 VST 87; [2005] 58 Kar. L.J. 155 (HC) (DB) referred to supra requires to be extracted which reads as follows : "26. Secondly, the learned counsel for the parties have not placed any material before us to demonstrate how the sunflower oil cake and groundnut oil cake are in any way different from de-oiled sunflower cake and groundnut oil cake. Therefore, the only way we need to understand these commodities is the way in which they are understood in common parlance and in trade circles. The oil cake contains a certain percentage of oil and several other ingredients. When these commodities are subjected to processing of extraction of oil, some quantum of oil is removed, but they continue to remain as oil cakes with lesser content of oil, and the original commodity is not used in the manner as to cease to exist or cease to be available in that form for sale or purchase to attract levy of tax under section 6 of the Act. An article which is commonly and generally known as oil cake would not lose its identity merely because the purchasing dealer utilise the same for extraction of oil and therefore, the essential ingredients required to attract the levy of purchase tax under section 6 of the Act are not satisfied and accordingly it requires to be held that there is no consumption of oiled sunflower cake and oiled groundnut oil cake in the manufacture of other goods for sale nor there is any consumption otherwise, since even after extraction of oil, the oiled sunflower cake and oiled groundnut cake continue to remain as oil cake with lessor quantity of oil and therefore, they continue to remain the same commodity." This court while considering as to character of de-oiled cakes remaining after extraction from oil cake held that, it does not lose its identity as whole cake nor it ceases to exist as a oil cake. Applying the proposition laid down in the said judgment which is pressed into service by the appellant to the facts of this case, the only way to understand the commodities which ultimately come out on crushing of the chilly in common parlance and in trade circles is also required to be examined with reference to the instant case and examine whether they are understood in common parlance and in trade circles. Admittedly, in the process carried out in extraction of oleoresin, the reminiscence that would follow are, cut chilly, crushed chilly and spent chilly and it is sold as a separate commodity and accepted both in trade and common parlance and it does not lose its identity by virtue of such extraction process. The originality of such commodity remains as such. Hence, in view of the same, we are of the view that the judgment of this court in Habeeb Proteins [2007] 6 VST 87; [2005] 58 Kar. L.J. 155 (HC) (DB) would be squarely applicable to the facts of the present case. Yet another factor which requires to be considered in favour of the assessee is the subsequent amendment brought about to entry 89 whereunder the Legislature in the wisdom has included crushed chilly, cut chilly and spent chilly by adding the same after the words "dry chillies". Yet another factor which requires to be considered in favour of the assessee is the subsequent amendment brought about to entry 89 whereunder the Legislature in the wisdom has included crushed chilly, cut chilly and spent chilly by adding the same after the words "dry chillies". Hence, we find that the Advance Ruling Authority was in error in holding that the residuary clause, viz., section 4(1)(b) of the Act was applicable to the facts of this case, viz., the commodity in question and the ruling that the assessee is liable to pay tax at 12.5 per cent for the period April 1, 2005 to March 31, 2006. In view of our discussion made hereinabove, we hold that the crushed chilly, spent chilly is a spice by itself which can be sold and traded in common parlance and accordingly, tax leviable would be at the rate of four per cent and it comes within entry 61 under the definition of "dry chillies" and accordingly, we answer the questions of law formulated hereinabove in favour of the assessee and against the Revenue by holding that the Advance Ruling Authority was in error. Accordingly, the appeal filed by the assessee is allowed without any order as to costs. Sri Vedamurthy, learned Government Advocate, is permitted to file memo of appearance within four weeks from today.