STATE OF KARNATAKA Vs. GODREJ CONSUMER PRODUCTS LIMITED

JUDGEMENT

(1.) The State has preferred these revision petitions against the order passed by the Karnataka Appellate Tribunal, Bangalore (hereinafter referred to as 'the Tribunal'), challenging the finding that, G.K. Aerosol, Hit Aerosol, Hit Rat and Hit Line are Insecticides falling under Entry 23 of Third Schedule of Karnataka Value Added Tax Act, 2003 (hereinafter referred to as 'the Act'). The respondent-Company is engaged in the manufacture and sale of G.K. Aerosol, Hit Aerosol, Hit Rat and Hit Line, which are used as Home Insecticides. The business premises of the respondent was inspected. It was noticed that the respondent has charged and collected the VAT at the rate of 4% on the sale of aforesaid goods. The Prescribed Authority passed the reassessment order under Section 39(1) of the Act, levying tax at the rate of 12.5% on the sale of these goods.

(2.) The respondent preferred a writ petition (Godrej Sara Lee Limited, Bangalore v. State of Karnataka and Others,2011 70 KarLJ 512) instead of preferring an appeal to the Joint Commissioner of Commercial Taxes on the ground that the reassessment was done on the instructions of the Commissioner and therefore, no useful purpose would be served in preferring a statutory appeal. The High Court accepting the said submission directed the respondent-Company to approach the Tribunal and accordingly, the respondent preferred an appeal before the Tribunal. The Tribunal after hearing both parties, considering the judgments on which reliance was placed held that the goods manufactured and sold by the respondent-Company are admittedly insecticides containing the chemicals, which are capable of killing the mosquitoes, rats, cockroaches, etc. Mosquito Repellants are totally different products as the)' drive away mosquitoes, etc. Therefore, the goods manufactured by the respondent are insecticides falling under Entry 23 of Third Schedule of the Act. As such, they are assessable to tax at the rate of 4% at the relevant point of time. The order of the Assessing Authority was set aside and it was directed to pass consequential orders. Aggrieved by the said order, the State has preferred these revision petitions.

(3.) These revision petitions came to be admitted on 12-7-2013 to consider the following substantial questions of law: