IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 9TH JUNE 2008 / 19TH JYAISHTA 1930 OT.Appeal.No. 12 of 2006() -------------------------- (AGAINST the ORDER OF COMMISSIONER OF COMMERCIAL TAXES DATED 06/07/2006 IN LETTER NO.C7.58114/05/CT) : APPELLANT: --------------------------- T.P. SHOBHA, PROPRIETRIX, VISHNU AGENCIES, KARUVELIPADY, COCHIN-5. BY ADV. SRI.V.P.SUKUMAR SRI.R.SUDHISH RESPONDENTS: ------------- THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. BY SHRI.TEKCHAND, GOVERNMENT PLEADER THIS OTHER TAX APPEAL HAVING BEEN FINALLY HEARD ON 09/06/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. ------------------------- O.T.A. No. 12 of 2006 --------------------------------- Dated, this the 9th day of June, 2008 J U D G M E N T Ramachandran Nair, J. This is an appeal filed under Section 62(1) of the Kerala Value Added Tax Act, 2003 challenging Annexure-III clarification issued by the Commissioner of Commercial Taxes under Section 94 of the Act clarifying that hinges, tower bolts, aldrops, handles, knobs etc., fall under the revenue neutral rate category, taxable at 12.5%. Appellant’s case is that on an earlier occasion, the Commissioner vide Annexure-II order dated 21/01/2006 clarified that these items fall under Entry 3 and Entry 82 of 3rd Schedule to the Act are taxable at 4%. 2. We have heard learned counsel appearing for appellant and learned Government Pleader for respondent. 3. Learned counsel for appellant rightly contended that when items under Entry 3 of 3rd schedule are classified with reference to the metal used in the production of the goods, it was wrong for the Commissioner to have clarified on rate of tax without reference to the metal out of which the article is made. Learned counsel specifically referred to the residuary entries covering OTAP No.12/2006 -2- “articles of brass” under Entry 3(2) of 3rd schedule. “Articles of other base metals” are covered by Entry 3(24) of 3rd schedule, which provides for tax @ 4% for all the items covered therein. According to appellant, hinges are made of stainless steel, brass etc. and therefore hinges of all types will not come under one single entry. On going through the various entries in the schedule, we do not find any general entry providing for construction materials like hinges, tower bolts, aldrops etc. Therefore, classification has to be made for each and every item. When there is a general entry providing for “articles of brass”, it cannot be said that hinges made of brass are not covered by the said entry. Therefore, hinges made of brass will come under Entry 3(2) of 3rd schedule, taxable @4%. Consequently, Annexure-III clarification pertaining to brass hinges has to be vacated and we do so. Like hinges, lot of customers use handles, knobs, tower bolts etc. made of brass. Therefore, the general entry “articles of brass” will cover all these items. Consequently, we hold that along with brass hinges, tower bolts, handles and knobs made of brass also will attract tax at 4% under items 3(2) of 3rd schedule to the Act. 4. It is not known whether aldrops are made of metal other OTAP No.12/2006 -3- than steel. Since brass is not used for making aldrops, it is clarified that aldrops will be taxable at 12.5% as RNR will stand. Even though learned counsel referred to Entry 3(4)(l) providing for “other articles of copper other than reservoirs, tanks and vats”, appellant has not pointed out as to whether they are making any building material with copper. Copper is not commonly used for making articles like hinges, tower bolt, knobs etc. However, if copper is the metal out of which these articles are made, then the items will be covered by Entry 3(4), taxable at 4%. Since no other issues are raised, we allow the appeal to the extent indicated above. (C.N.RAMACHANDRAN NAIR, JUDGE) (V.K.MOHANAN, JUDGE) jg