Punjab Carbonic (p) Ltd Vs Commercial Tax Officer and Others (Andhra Pradesh High Court)
Conclusion: Sale of liquid carbon dioxide was liable to be taxed at 5% as Heading No.2811 21 specifically mentioned carbon dioxide, it may however be noted that there was no qualification that carbon dioxide should be in a gaseous form. In the absence of any such qualification, carbon dioxide in gaseous form or liquid form, would fall under HSN Heading No.2811 and also in Entry No.100(190) of Schedule-IV of the VAT Act.
Held: Assessee was in the business of purchasing carbon dioxide and production of liquid carbon dioxide by scrubbing, purification, drying, filtration and liquefaction and selling the purified liquid carbon dioxide and Dry Ice. It was registered under the Andhra Pradesh Value Added Tax Act, 2005 and had declared the turnovers in relation to the said products, for the period February, 2016 to June, 2017 and paid tax @ 5% on the turnover of Carbon Dioxide Gas and @ 14.5% on the sale of Dry Ice. AO had accepted the said rate of tax, in relation to sale of Carbon Dioxide and passed an assessment order for the period February 2016 to June 2017. Joint Commissioner had issued a notice of revision, calling upon assessee to show cause as why the turnover relating to the sale of liquid Carbon Dioxide should not be taxed @ 14.5%. In the show cause notice, Joint Commissioner simply stated that purified liquid Carbon Dioxide gas fell in the unclassified category of goods i.e., Schedule-V to the VAT Act, and was liable to be taxed @ 14.5% instead of 5%. As per assessee, liquid Carbon Dioxide fell within Entry-100 (190) in Schedule-IV of the VAT Act and the rate of tax would be 5%. The case of assessee was that Entry 100(190) was applicable to “other inorganic acids and other inorganic oxygen compounds of non-metals” falling under HSN Code Heading No.2811. It was held that description of goods in Entry 100(190) of Schedule-IV was other inorganic acids and other inorganic oxygen compounds of non-metals and carbon dioxide definitely would fall within such a category. The fact that there were other products mentioned under the main Heading No.2811 would not mean that carbon dioxide did not fall within Heading No.2811. In any event, Heading No.2811 21 specifically mentioned carbon dioxide, it may however be noted that there was no qualification that carbon dioxide should be in a gaseous form. In the absence of any such qualification, carbon dioxide in gaseous form or liquid form, would fell under HSN Heading No.2811 and also in Entry No.100(190) of Schedule-IV of the VAT Act, added the bench. The bench disagreed with the contention of Revenue that a declaration had to be obtained from the purchaser of carbon dioxide to obtain concessional rate of tax available to such products. In view of the above, the bench allowed the petition and set aside the order of revision.
