IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 24TH MARCH 2009 / 3RD CHAITHRA 1931 OT.Appeal.No. 5 of 2007() ------------------------- ORDER.C7-48870/2005/2009 of COMMR. OF COMMERCIAL TAXES, TRIVANDRUM .................... APPELLANT ----------------------------- T.R.RAJEEV, PROPRIETOR, T.K.R.INDUSTRIES, TRIPPUNITHURA. BY ADV. SRI.VIJAYAN. K.U. SRI.K.N.SREEKUMARAN RESPONDENT(S): --------------- 1. COMMERCIAL TAX OFFICER, KVAT CIRCLE-I, TRIPPUNITHURA. 2. COMMERCIAL TAX OFFICER, AUDIT ASSESSMENT, COMMERCIAL TAXES DEPARTMENT, ERNAKULAM. 3. COMMISSIONER OF COMMERCIAL TAXES, VIKAS BHAVAN, THIRUVANANTHAPURAM. BY G.P. SRI. V.K. SHAMSUDEEN THIS OTHER TAX APPEAL HAVING BEEN FINALLY HEARD ON 24/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & K. SURENDRA MOHAN, JJ. -------------------------------------------- O. T. A. No. 5 OF 2007 -------------------------------------------- Dated this the 24th day of March, 2009 JUDGMENT Ramachandran Nair,J. The order under challenge is the clarification issued by the Commissioner under Section 94 of the Kerala Value Added Tax Act clarifying that plastic coated kitchen stand sold by the appellant attracts tax at 12.5% under residuary entry 103 of notification SRO 82/2006 issued under Section 6(1)(d) of the Act. Counsel for the appellant relied on IIIrd Schedule, Entry 3(8)(m) which provides for tax at 4% on articles of iron or steel wire. Government Pleader submitted that corresponding HSN Code No. 7326.20 shows that only those articles referred to therein will fall under that entry. There is no doubt that item itself is made of MS wire rod of small dimension and is coated with plastic only to prevent rusting. Counsel for the appellant referred to the proposal contained in Finance Bill 2009 wherein the rate of tax on kitchen stand with plastic coating is given a reduction in tax to 4%. 2 According to counsel for the appellant, Budget Speech or the proposal contained in the Finance Bill does not indicate classification prior to amendment. We find force in this contention because articles of iron and articles made of steel wire are covered by entry 3(8)(m) of III Schedule to the Act. Since the product is essentially made of iron and steel wire and coating is done to prevent rusting, we feel the applicable rate is 4% under entry 3(8)(m) of Third Schedule. We therefore allow the appeal by reversing the order of the Commissioner by declaring the rate of tax for the product at 4%. (C.N.RAMACHANDRAN NAIR) Judge. (K. SURENDRA MOHAN) Judge. kk 3