Case Law Details
Lohiya Agencies Vs Additional Commissioner (Legal) (Supreme Court of India)
Conclusion: Gypsum boards would be taxable at 4 percent as per amended Entry 56 of Schedule IV instead of residuary Entry 1 of Schedule V at 12.5% Under the Rajasthan Value Added Tax Act, 2003.
Held: M/s. IGL, a manufacturer of drywall or ‘gypsum board’, moved an application before Additional Commissioner for ascertaining whether gypsum board would fall within the category of the amended Entry 56 of Schedule IV of the RVAT, with 4% rate of tax applicable or under the residuary Entry 1 of Schedule V, to be taxed at 12.5%. Additional Commissioner opined that ‘gypsum board’, being commercially a different product would not fall under Entry 56 of Schedule IV of the RVAT but would fall under the residuary Entry, making it subject to the 12.5% slab of taxation. It was held an amendment was done to the Entry 56 to expand the meaning of Entry 56 of Schedule IV of the RVAT by changing it to ‘Gypsum in all its forms’. This certainly signified that something more than basic gypsum was sought to be included in the Entry by referring to ‘gypsum in all its forms’. Gypsum boards were used as thinner plasterboards for panelling stud walls. The aforesaid material itself gave rise to the conclusion that there were no major chemical changes in gypsum which were carried out other than dehydration and mixing of additives, so that the paper sheets could be used on both sides, to be made capable of being used as a board. Moreover, it was to be considered that if the object was to include only ‘gypsum’, then why would the Entry be changed to ‘gypsum in all its forms’? The corollary would also be as to what was meant by ‘in all its forms’, as it was not, as if mere geometrical alteration of shape would form part of the Entry. In such a situation, the original Entry itself was comprehensive enough to have included it. Thus, gypsum boards would be taxable at the rate of 4 percent.
FULL TEXT OF THE SUPREME COURT JUDGEMENT
1. Leave granted.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
