Case Law Details
Commissioner Vs Peethambra Granites Pvt Ltd (Allahabad High Court)
In a significant legal development, the Allahabad High Court has resolved a taxation dispute related to granite stones by upholding the Tribunal’s ruling. The court dismissed a tax revision petition that questioned the taxation slab for granite, providing clarity on the applicable tax rate.
The Allahabad High Court dismissed a tax revision petition filed for the determination of the taxation slab of granite stones. The revision petition was admitted based on the question of law regarding the taxation of granite stone blocks and pieces.
The issue for consideration before the Court was whether the items sold by the dealer should be taxable at 5% under entry no.109 of Schedule II Part A, as per a government notification, even though granite stone was not mentioned. The notification included sand, gitti, bajri, kankar, stone ballast, stone but not including glazed stone marble and marble chips.
A Single Bench of Justice Shekhar B. Saraf observed, “glazed stone, marble and marble chips have been specifically excluded from the definition of “stone” in Entry No.109. If the Legislature wanted to exclude granite stone, the same could have very well been done by the amendment carried out on March 31, 2011. It is my view that if one were to agree with the submission made by the revenue, one would have to exclude several items that would ordinarily be termed as “stone”, which is not permissible in law”
Advocate Ravi Shanker Pandey represented the revisionist, while Advocate Ishir Sripat appeared for the opposite party. The revenue argued that granite stone was not included in the entry list and should be taxed at 14.5% since the list was meant for substances of lesser value, and granite stone, being expensive, should not be treated the same under this category.
The Court stated “Entry No.l09 specifically includes “stone” with the caveat that the same shall not include glazed stone, marble and marble chips” The Court reasoned that if the Legislature intended to exclude granite stone, it would have done so during the amendment as notified by the notification.
The Court also explained that the Tribunal’s decision was in consonance with the exclusion of processed stones in Entry No.109, considering glazed stones were specifically excluded. Accordingly, the Court dismissed the revision petition.
The Allahabad High Court’s decision provides clarity on the taxation of granite stones, emphasizing that the existing entry no.109 applies to these items. The dismissal of the revision petition reaffirms the Tribunal’s decision and sets a precedent for similar cases. The ruling has implications for the granite industry and establishes a legal standpoint on the interpretation of taxation entries.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Ravi Shanker Pandey, learned Additional Chief Standing Counsel for the revisionist and Sri Ishir Sripat, learned counsel for the opposite party.
2. The revision petition was admitted on the following question of law:-
“Whether on the facts and circumstances of the case, the Tribunal was legally justified in holding that granite stone block and pieces sold by the dealer is taxable @ 5% (including additional tax) under entry no.109 of the Schedule II Part A as per notification No.KANI-2-421/XI-9(1) dated 31.03.2011, “sand, gitti, bajri, kankar, stone ballast, stone but not including glazed stone marble and marble chips” despite the fact that granite stone has not been mentioned in the said notification, being exhaustive entity?”
3.The case made out by the revenue is that in the classification, Entry No.109 does not include granite stone, and accordingly, the same should be treated as not classified and taxed @ 5%.
4. The argument put forward by Pandey is that Entry No.109 only includes substances that are of less value as the items included therein are “sand, gitti, bajri, kankar, stone ballast, stone”. He submits that granite stone is an expensive item and was never meant to be included in Entry No.109.
5. Entry No.l09 specifically includes “stone” with the caveat that the same shall not include glazed stone, marble and marble chips.
6. On an interpretation of the intention of the Legislature, I am of the view that glazed stone, marble and marble chips have been specifically excluded from the definition of “stone” in Entry 109. If the Legislature wanted to exclude granite stone, the same could have very well been done by the amendment carried out on March 31, 2011. It is my view that if one were to agree with the submission made by the revenue, one would have to exclude several items that would ordinarily be termed as “stone”, which is not permissible in law.
7. Upon perusal of the order passed by the Tribunal, one finds that the Tribunal has held that stones that have not been processed in any manner, would be included in Entry 109 whereas processed stones that have gone through some kind of procedure would be excluded. The above finding is in consonance with the fact that glazed stone has been specifically excluded from Entry No.109.
8. In light of the above findings, there is no scope of interference in the well reasoned order passed by the Tribunal, and accordingly, this revision petition is dismissed.
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