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2014 DIGILAW 94 (TRI)

Sarada Trading v. State of Tripura

2014-02-17

DEEPAK GUPTA, S.TALAPATRA

body2014
JUDGMENT Deepak Gupta; C.J.:- This petition is directed against the order of the Commissioner of Taxes dated 14.08.2008, whereby he dismissed the appeal of the petitioner-assessee and upheld the order dated 31.12.2007, whereby the assessee was held liable to pay tax @ 12.5% alongwith interest and penalty was also imposed upon him. Briefly stated the facts of the case are that the assessee is a dealer and sells insecticides which are meant for spraying within domestic household to repel/kill mosquitoes, flies, cockroaches etc. The assessee wrote a letter to the Superintendent of Taxes concerned on 22nd June, 2005. In that letter he stated that whereas insecticides were to bear tax @ 4%, mosquito and insecticide repellents were exigible to tax @ 12.5%. According to the assessee there is no mention in the list about spray items and therefore he sought a clarification whether his items came under the group of 'insecticides' or under the group of 'mosquito repellents'. Admittedly, no reply to that letter was given. But, later on the Department on 7/10th July, 2007 clarified that tax was leviable @ 12.5%. 2. In the present petition we are dealing with the assessment year 2005-06. Sri Saha, learned counsel for the petitioner contends that once the petitioner had sought for a clarification and no clarification was given, the assessee collected tax from the customers only @ 4%. Therefore, it would be unjust to make him liable to pay tax @ 12.5%. 3. Entry No. 29 in Schedule II(a) of the Tripura Value Added Tax Act, 2004 (for short 'TVAT Act') reads as follows: Chemical fertilizers, Biofertilizer and micronutrients, also plant growth promoters and regulators, herbicides, rodenticides, insecticides, weedicides etc. Items under Schedule II(a) of the TVAT Act were exigible to tax @ 4%. Schedule II(b) deals with the lists of the goods which were at the relevant point of time 12.5%, now raised to 13.5% w.e.f. 4th May, 2011. Entry No. 115 in Schedule II(b) of the TVAT Act reads as follows: Mosquito repellents including electric or electronic mosquito repellents, gadgets and insect repellents, devices and parts and accessories thereof. 4. Mr. Saha, learned counsel for the petitioner contends that there could be a genuine confusion that mosquito repellents would also fall in the category of 'insecticides' under Schedule II(a) of the TVAT Act. 4. Mr. Saha, learned counsel for the petitioner contends that there could be a genuine confusion that mosquito repellents would also fall in the category of 'insecticides' under Schedule II(a) of the TVAT Act. We are not in agreement with this submission because when the whole of the entry No. 29 of Schedule II(a) of the TVAT Act is read together, it clearly indicates that the insecticides which have been referred therein are those used for agricultural purposes. Whereas entry No. 115 of Schedule II(b) specifically deals with mosquito repellents including electric or electronic mosquito repellents and these have been levied taxes at a higher rate. No doubt, the mosquito repellents are also insecticides in a diluted form, but 'mosquito repellents' is a well known terminology in common parlance and mosquito repellents are not the insecticides which are envisaged under entry No. 29 of Schedule II(a) of the TVAT Act. Therefore, on merits we do not find any illegality in the order. 5. Having held so, we are clearly of the view that no penalty should have been imposed on the present petitioner. The assessee had approached the Assessing Officer and asked for a clarification. It was the duty of the Assessing Officer to clarify the matter, but he did not do so and kept sleeping over the matter for two long years. Therefore, the assessee, according to him, has not collected tax @ 12%, but has collected tax @ 4%. We have held that the assessee is liable to pay tax @ 12.5%. But there is no willful evasion of tax in this case because he had honestly put forth his case before the Taxing Authority and if the Taxing Authority felt that there was no merit in the submission of the assessee, it should have replied to him then and there. This has not been done. Therefore, we partly allow this revision petition and set aside the order of assessment in so far as it imposes penalty upon the petitioner. With these directions, this revision petition is disposed of.