IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.Q.BARKATH ALI WEDNESDAY, THE 23RD DECEMBER 2009 / 2ND POUSHA 1931 WA.No. 2562 of 2009() --------------------- AGAINST THE JUDGEMENT/ORDER IN WPC.20369/2009 Dated 22/07/2009 .................... APPELLANT(S): -------------- CRAFT POLYMERS, REPD. BY MANAGING PARTNER GEETHA.N, CHERUSSERY, VALLACHIRA, (PO) THAIKATTUSSERY, THRISSUR DT. BY ADV. SRI.M.K.DILEEP KUMAR RESPONDENT(S): --------------- 1. SALES TAX OFFICER, II CIRCLE, COMMERCIAL TAXES DEPARTMENT, THRISSUR, THRISSUR DT. 2. THE COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. 3. STATE OF KERALA, REPD. BY SECRETARY OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. G.P. SRI.MOHAMMED RAFIQ FOR R1-3 THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 23/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.Q.BARKATH ALI, JJ. .................................................................... Writ Appeal No.2562 of 2009 .................................................................... Dated this the 23rd day of December, 2009. JUDGMENT Ramachandran Nair, J. Question raised is whether stainless steel fan hooks made by the appellant which is a small scale industrial unit, from stainless steel rods attract tax at 12.5% under Entry 103 of Notification SRO 82/006 or whether it is an item falling under sub-entries 21 or 22 of Entry 43 of the IIIrd Schedule to the KVAT Act as claimed by the appellant. We have heard counsel for the appellant and Government Pleader for the respondent. 2. Counsel for the appellant first submitted that all other dealers in stainless steel fan hooks are assessed at the rate of 4% treating the item as one falling under Entry 43 of the IIIrd Schedule. A clarification issued by the Commissioner in the case of another party vide order No.C7.58114/05/CT dated 28.7.2006 is produced in court. Among the items on which rate of tax is clarified, one item is hooks and eyes which is made taxable at 12.5%. The contention of counsel 2 for the appellant is that hooks and eyes go together and those items are attachments to windows and the hooks referred to therein is not fan hook. We find force in this contention because items clarified by the Commissioner vide order abovereferred are fittings for door, window etc. Fan hook is not specifically covered under the clarification, even though MS Clamp for fan fittings is covered by Entry 14. The two items covered by sub-entries 21 and 22 of Entry 43 of the IIIrd Schedule are the following: ------------------------------------------------------------------------------------- Sl.No. Description of goods HSN Code ------------------------------------------------------------------------------------- (21) Bars and rods, hot-rolled, in irregularly 7221 wound coils, of stainless steel (22) Other bars and rods or stainless steel; angles, 7222 shapes and sections of stainless steel: Bars and rods, not further worked than hot-rolled, hot-drawn or extruded. ------------------------------------------------------------------------------------- The contention of counsel for the appellant is that stainless steel products are covered by the above two entries. His further contention is that fan hook is nothing but stainless steel rod cut to sizes and bent 3 on either side without any manufacturing activity. We find force in the contention that the manipulation done on steel rod to make it hook is a simple work of bending by hand or mechanically. Admittedly semi- finished steel products and angles, shapes, bars and rods of stainless steel products are covered by Entries 21 and 22. Since stainless steel fan hook is not specifically covered by the entry, it is for the Commissioner to clarify whether such products are intended to be covered by sub-entries 21 and 22 of Entry 43. We are in agreement with the assessee's contention that hooks and eyes referred to in the clarification abovereferred do not include fan hooks. Admittedly stainless steel fan hook is not covered even under Notification SRO 82/2006 except under the residuary entry of the notification, namely, Entry 103, if the item is not covered by any other Schedule entry or under any other Entry of the Notification. Counsel also pointed out that value added product like stainless steel nails under the above clarification is subject to tax only at 4%. Since the item is not specifically covered by any of the entries or under the Notification, we direct the Commissioner to clarify on the rate of tax on stainless steel 4 fan hooks on an application to be filed by the appellant along with copy of this judgment, which the appellant is directed to do within ten days from the date of receipt of copy of this judgment. The Assessing Officer will modify the rate of tax in the assessment, if the Commissioner issues clarification on rate of tax at variance with the rate applied by the officer. There will be direction to the respondents not to recover the excess rate of tax assessed from the appellant for two months from now. The Commissioner is directed to pass orders on the clarification application within one month from the date of receipt of the application. Recovery thereafter will depend on the orders of the Commissioner in the clarification application to be filed by the appellant. C.N.RAMACHANDRAN NAIR Judge P.Q.BARKATH ALI Judge pms