Practical Approach to Interpretation of Schedule Entries Under … · 2019-01-01 · Practical...
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Practical Approach to Interpretation of Schedule Entries Under MVAT Act www.taxguru.in
Transcript of Practical Approach to Interpretation of Schedule Entries Under … · 2019-01-01 · Practical...
Practical Approachto Interpretation of
Schedule EntriesUnder MVAT Act
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Provisions related to Schedule, Notifications andDDQ .
General contents of Schedules and ImportantNotifications.
Theories of interpretation of Schedule Entries.
How to read and interpret Schedule Entry.
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Section 2(26) - Schedule means the scheduleappended to MVAT Act,
Section 5- Explains regarding tax-freegoods.
Section 6 - Levy of tax on goods specified inthe schedule.
Section 9 - Government can amend theschedule.
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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%
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Whether there is any misclassification of scheduleentry 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.
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1) COMMON PARLANCE THEORY
The words / expressions must be construed in thesense in which they are understood in the trade bythe 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.)www.taxguru.in
2) NOSCITUR A SOCIIS:
The meaning :- It is known by its associates.
The meaning of a word is to be Judged by thecompany it keeps. It means to constitute the wordsin an act with reference to the words found inimmediate connection with them.
Pradeep Agarbatti V/s State of Punjab (AIR 1998 SC171)www.taxguru.in
3) STRICT INTERPRETATION
Where a statute provides that a particular thing shouldbe done, it should be done in the manner prescribedand 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 thetest 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)www.taxguru.in
5) SCIENTIFIC/TECHNICAL MEANING
Where generic expressions of scientific ortechnological meaning are used , the technicalmeaning would be more relevant.
Televista Electronics V/s CST ( 34 VST 1).
CST V/s Sarin Textile Mills ( 35 STC 634) (SC).
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6) RULE OF EJUSDEM GENERIS
Meaning : - Of the same kind of species.
When particular words pertaining to a class, category orgenus are followed by general words, the general wordsare contrived as limited to things of same kind as thosespecified. This rule applies when:A) The statute contains an enumeration of specific words,
B) The subjects of enumeration contains class or categorywhich 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).www.taxguru.in
7) SPECIFIC ENTRY V/S GENERAL ENTRYSpecific entry would always over ride general entry. But resort
has to be had to the residuary entry only when a liberalconstruction of the specific entry can not cover the goods inquestion.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 REFRENCE TO ANOTHERSTATUTE IN THE SCHEDULE ENTRY
Common parlance would be paramount and reference to theother statute is not permitted.Channulal Motilal V/s CST (MP).
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9) REFERENCE GIVEN OF ANOTHER STATUTE INTHE SCHEDULE ENTRY :
In such case the definition given in the other statute along withall its amendments , variations from time to time should be readinto 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 periodcan 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 www.taxguru.in
Spare parts: Part which can be replaced on accountof wear and tear / an extra item for use in emergency.
Acme Plastic Industries (48 STC 29).
Components: Article which forms an identifiableconstituent of the finished product and make up thefinished 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 forconvenient use of another part or supplementary to themain / primary importance.
CST V/s Free India Cycle Ind. (26 STC 428).www.taxguru.in
Scrap : Waste or the thing being of no use.Bharat Iron & Brass Foundries V/s CST (28 STC 455)
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•PERFECT DRAFTSMAN EXISTS ONLY INTHEORY AND NOT IN PRACTICE.
•
Construction is a process to ascertain the meaningor an art to give the meaning and true sense to thewords of the legislature. If any statutory provision isopen to more than one meaning then theinterpretation represents the true intention of thelegislature may be chosen.
•Interpretation depends on- the Text and theContext.
•Statute Is The Master And Not The Servant Of TheJudgement.
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•Statement of Object and Reasons. : It isalways safe to have an eye on the objectand the purpose of statute or reasons &spirit behind it.
•Role of the interpreter- Is not the role ofreformer- sometimes it is beyond theendurance of sensitive minds to allow theinjustice to be suffered when it is sopalpable.
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• A rule of construction : is flexible andis merely a presumption in favour of aparticular meaning in case of ambiguity.The cannons of interpretation do notoverride the language of the statutewhere the language is clear. They onlyguides us to enable to understand aswhat is inferential.
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•Includes : It is used to enlarge the meaning of thewords. It widens the scope of entry by specificenumeration of certain matters which its ordinarymeaning may or may not be considered.
•That is to say : are really not the words of restrictionbut the words of illustration.
•May : Generally permissive and not mandatory.
•Namely : It has various shades but grammaticallycan be construed as ‘ that is to say’.
•Means : The definition is hard and fast and no othermeaning can be assigned.
•Any : The word has several meanings like – ‘all’,‘each’, ‘every’, ’some’, or , ‘one out of several’
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•And : - Normally conjunctive but some times can bedisjunctive and can be construed as ‘as well as’
• Deeming provision: Legal fictions are created for specific anddefinite purpose and are limited to that very purpose. “ A part isalways a part and not a whole”.
Occasioned By- Due To :
Notified from time to time- To protect the executor from variouschanges made in the statute
Quasi Judicial- It implies not fully judicial but describes theduty cast on an executive to stick up to the norms of judicialprocedure.
Literal and mechanical construction – To be disregarded if itconflicts with some essential elements of fair play and naturaljustice.
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SCHEDULE A
A-3 Animal driven Carts including bullock carts and CPAthereof (excluding bearing, tubes and tyres).
A-6 Books that is to say every volume or part or division of avolume including almanacs, panchangs, timetablesfor passenger transport services and periodicals,maps, charts, orreiries and globes, butexcluding – annual reports, application forms,account books, balance sheets, calendars, diaries,catalogues, race cards, publications which mainlypublicise goods, services and articles forcommercial purposes and publications which containspace 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]www.taxguru.in
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 after1st 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 ornot and milk containing any ingredient and sold under a brandname shall not be covered by the scope of this entry when servedfor consumption.
e) Curds (whether or not sweetened or flavored) when sold under abrand name, except when served for consumption
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SCHEDULE C
C-104 a) Writing instruments, ball point pens, felt tippedand 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 foregoingarticles;
b) Mathematical instrument boxes includinginstruments thereof, students colour boxes,crayons and pencil sharpeners;
c) Writing boards or writing pads, drawingboards, black boards, greenboards, whiteboards, examination pads, foot rulers, erasers,glitter pens, sketch pens, staplers, pencil leads,oil pastels, drawing charcoals and envelopes.
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SCHEDULE C
C-92 Sports goods excluding apparels and footwear.
C-99 a) Umbrella and raincoat except garden Umbrella.
b) Components, parts, and accessories of umbrellaexcept garden umbrella.
C-56, 57,68, 84,105 -That is to say.... IT products, Jute, OilSeeds, Rubber , Embroidery or Zari material.
C-108(2)-Timber, sold during 01.04.2008 to 31.03.2010- 4%
(Time specific entry) and after 01.04.2010 - 12.5%
C-39 Goods of incorporeal nature or intangible nature as maybe notified from time to time by the Government inthe official gazette (read with Schedule Entry A- 27).www.taxguru.in
SCHEDULE D
1Foreign liquor as defined from time to time in rule3(6)(1) of the Bombay Foreign Liquor Rules 1953
excluding wine-50% Wine - 20%
5HSD Oil - 24% , when delivered to a retail trader fortrading in BMC, Thane and Navi Mumbai - 24% Otherthan Mumbai ( Geographical area oriented)
In any other circumstances 21%.
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CA BHARAT S. VYASContact : +91-9422939945
Email : [email protected]
Add : 3, Shri Swami Arcade, NearSomani Hospital, Jatharpeth, Akola.
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