Agenda
- Provisions related to Schedule, Notifications and DDQ .
- General contents of Schedules and Important Notifications.
- Theories of interpretation of Schedule Entries.
- How to read and interpret Schedule Entry.
Provisions regarding Schedule Entry / Notifications
Section 2(26) – Schedule means the schedule appended to MVAT Act,
Section 5- Explains regarding tax-free goods.
Section 6 – Levy of tax on goods specified in the schedule.
Section 9 – Government can amend the schedule.
Classification of Goods and Rate of Tax
Schedule A- Tax-free goods,
Schedule B- Taxable @1% & 1.1%,
Schedule C- Taxable @2%, 3% and @5%,
Schedule D- Taxable @20-50%,
Schedule E- 1: Remaining Goods, Taxable @12.5%
Collection of factual information regarding commodity and source thereof
- Whether there is any misclassification of schedule entry done by the dealer or not….
- Whether tax has been paid at correct rate or not…
- What is the real nature and description of goods?
- Product, its use, function, nomenclature, trademark.
- General recognition by customers, Advertisement…
- Dictionary meaning of the word, context is important.
- Internet / website / encyclopedia/ technical information
- Pharmacopoeia / Ayurvedic standard text books.
- Disclosures to other departments like customs, Central excise classification , FDA, etc.
Principles of interpretation of Schedule Entries
1) COMMON PARLANCE THEORY
The words / expressions must be construed in the sense in which they are understood in the trade by the dealer and consumer.
Delhi cloth and General Mills Co. Ltd. Vs State of Raj (46 STC 256) (SC)
Integrated Caps Pvt.Ltd. V/s CTT. (47 MTJ 145) (All.)
2) NOSCITUR A SOCIIS:
The meaning :- It is known by its associates.
The meaning of a word is to be Judged by the company it keeps. It means to constitute the words in an act with reference to the words found in immediate connection with them.
Pradeep Agarbatti V/s State of Punjab (AIR 1998 SC171)
3) STRICT INTERPRETATION
Where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way.
Industrial catering Services V/s CTO Chennai ( 132 STC 35).
4) USE THEORY NOT RELEVANT
The nature of the goods can not be determined by the test of use to which they are capable of being put to. The user test is logical but not conclusive
Tube Investment V/s Dy. CTO (27 MTJ 573),
Mukesh Kumar Agarwal V/s State of MP (68 STC 324)
CST V/s Govardhanlal (63 STC 435)
5) SCIENTIFIC/TECHNICAL MEANING
Where generic expressions of scientific or technological meaning are used , the technical meaning would be more relevant.
Televista Electronics V/s CST ( 34 VST 1).
CST V/s Sarin Textile Mills ( 35 STC 634) (SC).
6) RULE OF EJUSDEM GENERIS
Meaning : – Of the same kind of species.
When particular words pertaining to a class, category or genus are followed by general words, the general words are contrived as limited to things of same kind as those specified. This rule applies when:
A) The statute contains an enumeration of specific words,
B) The subjects of enumeration contains class or category which is not exhausted by the enumeration.
C) The general terms follow the enumeration.
D) No indication of different legislative intents.
a) Radhakrishnan Murthi & Co. V/s CT (113 STC 161)
b) CST V/s Govardhandas Tokersey (52 STC 381).
7) SPECIFIC ENTRY V/S GENERAL ENTRY
Specific entry would always over ride general entry. But resort has to be had to the residuary entry only when a liberal construction of the specific entry can not cover the goods in question.
a)Bradma of India V/s State of MAH.(140 STC 17)
b)Collector of Central Excise V/s Wood Craft (3 SSC454) (1995).
8)WHEN THERE IS NO REFERENCE TO ANOTHER STATUTE IN THE SCHEDULE ENTRY
Common parlance would be paramount and reference to the other statute is not permitted.
Channulal Motilal V/s CST (MP).
9) REFERENCE GIVEN OF ANOTHER STATUTE IN THE SCHEDULE ENTRY :
In such case the definition given in the other statute along with all its amendments , variations from time to time should be read into the Schedule Entry.
Agro Industries Trading Corporation V/s State of Kerala.(72STC 1)(SC)
10) PRINCIPLE OF RES JUDICATA:
Meaning :- Thing adjudicated.
Interpretation holding good for considerable period can not be disturbed for compelling reasons.
Merind Limited V/s State of MAH ( 136 STC 462)
Smith Kline Beecham Consumer Health care V/s Dy. CST (128 STC 189) WB
Important words and their meaning
Spare parts: Part which can be replaced on account of wear and tear / an extra item for use in emergency.
Acme Plastic Industries (48 STC 29).
Components: Article which forms an identifiable constituent of the finished product and make up the finished product.
CST V/s Acme Mfg. Co. Ltd. ( 78 STC 79)
CST V/s Punjab Gramophone House (43 STC .141).
Accessories : The article which is adjunct /addition for convenient use of another part or supplementary to the main / primary importance.
CST V/s Free India Cycle Ind. (26 STC 428).
Scrap : Waste or the thing being of no use.
Bharat Iron & Brass Foundries V/s CST (28 STC 455)
PERFECT DRAFTSMAN EXISTS ONLY IN THEORY AND NOT IN PRACTICE.
- Construction is a process to ascertain the meaning or an art to give the meaning and true sense to the words of the legislature. If any statutory provision is open to more than one meaning then the interpretation represents the true intention of the legislature may be chosen.
- Interpretation depends on- the Text and the Context.
- Statute Is The Master And Not The Servant Of The Judgement.
- Statement of Object and Reasons. : It is always safe to have an eye on the object and the purpose of statute or reasons & spirit behind it.
- Role of the interpreter- Is not the role of reformer- sometimes it is beyond the endurance of sensitive minds to allow the injustice to be suffered when it is so palpable.
- A rule of construction : is flexible and is merely a presumption in favour of a particular meaning in case of ambiguity. The cannons of interpretation do not override the language of the statute where the language is clear. They only guides us to enable to understand as what is inferential
- Includes : It is used to enlarge the meaning of the words. It widens the scope of entry by specific enumeration of certain matters which its ordinary meaning may or may not be considered.
- That is to say : are really not the words of restriction but the words of illustration.
- May : Generally permissive and not mandatory.
- Namely : It has various shades but grammatically can be construed as ‘ that is to say’.
- Means : The definition is hard and fast and no other meaning can be assigned.
- Any : The word has several meanings like – ‘all’, ‘each’, ‘every’, ’some’, or , ‘one out of several’
- And : – Normally conjunctive but some times can be disjunctive and can be construed as ‘as well as’
- Deeming provision: Legal fictions are created for specific and definite purpose and are limited to that very purpose. “ A part is always a part and not a whole”.
- Occasioned By- Due To :
Notified from time to time- To protect the executor from various changes made in the statute
Quasi Judicial- It implies not fully judicial but describes the duty cast on an executive to stick up to the norms of judicial procedure.
Literal and mechanical construction – To be disregarded if it conflicts with some essential elements of fair play and natural justice.
SCHEDULE A
A-3 Animal driven Carts including bullock carts and CPA thereof (excluding bearing, tubes and tyres).
A-6 Books that is to say every volume or part or division of a volume including almanacs, panchangs, timetables for passenger transport services and periodicals, maps, charts, orreiries and globes, but excluding – annual reports, application forms, account books, balance sheets, calendars, diaries, catalogues, race cards, publications which mainly publicise goods, services and articles for commercial purposes and publications which contain space exceeding eight pages for writing.
A-55 a) Incense sticks commonly known as agarbatti, Dhoop, Dupkathi or dhupbatti.
b) Camphor
c) [Dhoop including Loban and Ral]
SCHEDULE C
C-79 Pulp of bamboo, wood and paper (‘and’ signifies as ‘or’).
C-91 a) Spices of all varieties and forms including cumin seed, hing (asafoetida), aniseed, saffron, pepper and poppy seeds.
b) for the periods starting on or after 1st April,2006, – Chillies, turmeric, tamarind, coriander seeds, fenugreek and parsley (suva) whether whole or powdered.
C-89 a) Milk powder including skimmed milk powder.
b) U H T Milk.
c) Condensed milk whether sweetened or not when sold on or after 1st April,2005.
d) Milk containing any ingredient and sold under a brand name, when sold on or after 1st April,2005
Explanation – U H T Milk, condensed milk whether sweetened or not and milk containing any ingredient and sold under a brand name shall not be covered by the scope of this entry when served for consumption.
e) Curds (whether or not sweetened or flavored) when sold under a brand name, except when served for consumption
SCHEDULE C
C-104 a) Writing instruments, ball point pens, felt tipped and other porus tipped pens and markers, fountain pens, stylograph pens and other pens, duplicating stylos, propelling or sliding pencils; pen holders, pencil holders, and similar holders; parts (including caps and clips) of the foregoing articles;
b) Mathematical instrument boxes including instruments thereof, students colour boxes, crayons and pencil sharpeners;
c) Writing boards or writing pads, drawing boards, black boards, greenboards, white boards, examination pads, foot rulers, erasers, glitter pens, sketch pens, staplers, pencil leads, oil pastels, drawing charcoals and envelopes.
SCHEDULE D
Foreign liquor as defined from time to time in rule 3(6)(1) of the Bombay Foreign Liquor Rules 1953 excluding wine-50% Wine – 20%
HSD Oil – 24% , when delivered to a retail trader for trading in BMC, Thane and Navi Mumbai – 24% Other than Mumbai ( Geographical area oriented)
In any other circumstances 21%.
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