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 26TH MAY 2008 / 5TH JYAISHTA 1930 OT.Appeal.No. 11 of 2006() (AGAINST THE CLARIFICATION ORDER NO.C7.17740/06/CT DATED 07/07/2006 OF THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM) -------------------------- APPELLANT: --------------------------- OMANA JOSEPH K., PROPRIETOR, KAIRALI INDUSTRIES, 1/56, CHULLIKKAVU TEMPLE ROAD, RAJAGIRI P.O., SOUTH KALAMASSERRY, PIN-683 104. BY ADV. SRI.VIJAYAN. K.U. SRI.K.N.SREEKUMARAN RESPONDENTS: ------------- 1. COMMISSIONER, COMMERCIAL TAXES, PUBLIC OFFICE BUILDINGS, THIRUVANANTHAPURAM. 2. COMMERCIAL TAX OFFICER, KVAT I-CIRCLE, KALAMASSERRY, EDAPPALLY. 3. SECRETARY TO GOVT., TAXES DEPARTMENT GOVT.SECRETARIAT, THIRUVANANTHAPURAM. BY SHRI.TEKCHAND, GOVERNMENT PLEADER FOR R THIS OTHER TAX APPEAL HAVING BEEN FINALLY HEARD ON 26/05/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. --------------------------------------------------------- O.T.Appeal No. 11 of 2006 --------------------------------- Dated, this the 26th day of May, 2008 J U D G M E N T Ramachandran Nair, J. The appellant is challenging annexure H clarification issued by the Commissioner holding that 'gum paste' manufactured and sold by the appellant attracts tax at 12.5% under entry (3) of notification SRO 82/06. 2. We have heard learned counsel appearing for appellant and learned Government Pleader appearing for respondents. 3. The contention of the learned counsel is that the item 'gum paste' is specifically covered by Entry 123 (21) of 3rd schedule to the KVAT Act and so much so the item cannot be brought under notification SRO 82/06. The notification SRO 82/06 is prescribed under Section 6(1)(d) of the KVAT Act, which authorises the Government to fix the rate of tax at 12.5% for the items not covered under Clauses (a) & (c) of Section 6(1) of the Act. We find that the group heading of Entry 123 among other things included 'gum paste'. However, the item was not specifically dealt with the corresponding HSN Code. Later without HSN Code number, item 'gum paste' was brought under sub entry 21 of Entry 123 of 3rd O.T.Appeal No.11/2006 -2- schedule of Notification SRO 82/06 with effect from 02/02/2006. It is stated that with effect from 01/07/2006 sub entry (21) was omitted and sub entries (22) and (23) were re-numbered as sub entries (21) and (22) under Entry 123 of 3rd schedule. Adhesives of all forms, which include gum, and those gum made of starch also are covered by Entry 3 of Notification SRO 82/06. Even though the contention by the appellant that the items falling under 3rd schedule cannot be brought under notification is correct, we find in this case that 'gum paste' was covered by Entry 123(21) of the 3rd schedule to the Act only for the period commencing from 02/02/2006 to 30/06/2006. Therefore, tax @ 4% is payable for the commodity only during this period. For the period prior to 02/02/2006 and for the period from 01/07/2006 onwards, the item will squarely fall under Entry 3 of notification SRO 82/06 taxable at 12.5%. We, therefore, allow the appeal in part by declaring the clarification applicable for the period up to 01/02/2006 and thereafter from 01/07/2006 onwards. (C.N.RAMACHANDRAN NAIR, JUDGE) (V.K.MOHANAN, JUDGE) jg