M/S Godrej Sara Lee
Ltd. Vs. Asst. Commissioner (Aa) & ANR.  INSC 553 (18 March 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.1888 OF 2009 [Arising out
of S.L.P.(C)No.113 of 2008] M/s. Godrej Sara Lee Ltd. .....Appellant Versus
Asst. Commissioner (AA) & Anr. .....Respondents
is manufacturer of coils, mats, aerosols, liquids/refills etc. which are used
for driving away and destroying mosquitoes. Appellant is an assessee under the
Kerala Value Added Tax Act, 2003 (for short, 'the Act'). The assessment year in
question is 2005-06.
State of Kerala, by Notification being SRO No.82/2006 dated 21st January 2006,
notified the list of goods specified therein to be taxable at the rate of
12.5%. Item no.66 of the said Notification reads as under :
Sl.No. Description of Goods HSN Code (1) (2) (3)
_______________________________________________________ 66 Mosquito repellents,
electric or 8516.79.20 electronic mosquito repellents, gadgets and insect
repellents, devices and parts and accessories thereof.
@ S.L.P.(C)No.113 of 2008 .... (contd.) -2-
to the appellant, in this case Section 6(1)(a) of the Act would be applicable,
the relevant portion whereof reads as under :
"6. Levy of tax
on sale or purchase of goods.-(1) Every dealer whose total turnover for a year
is not less than ten lakhs rupees and every importer or casual trader or agent
of a non-resident dealer or dealer in jewellery of good, silver and platinum
group metals or silver articles or contractor or any State Government, Central
Government or Government of any Union Territory or any department thereof or
any local authority or any autonomous body, whatever be his total turnover for
the year, shall be liable to pay tax on his sales or purchases of goods as
provided in this Act. The liability to pay tax shall be on the taxable
turnover,- (a) in the case of goods specified in the Second and Third Schedules
at the rates specified therein and at all points of sale of such goods within
the State .... ... ... ...
(c) in the case of
transfer of the right to use any goods for any purpose whether or not for a
specified period, at the rate of four per cent at all points of such transfer.
Revenue, however, contends that Section 6(1)(d) shall apply. Clause (d) of sub-
section (1) of Section 6 reads thus :
"(d) in the case
of goods not falling under clauses (a) or (c) at the rate of 12.5% at all
points of sale of such goods within the State Government may notify a list of
goods taxable at the rate of 12.5%;"
attention has also been drawn to Entry 3808 of Chapter 38 of the Customs Tariff
Act based on HSN Code which was C.A.No.1888/09 @ S.L.P.(C)No.113 of 2008 ....
(contd.) -3- applicable during the said assessment year; relevant portion
whereof reads as under :
Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and
plant-growth regulators, disinfectants and similar products, put up in forms or
packings for retail sale or as preparations or articles (for example,
sulphur-treated bands, wicks and candles, and fly-papers)"
the Act provides for the Interpretative Rules, the relevant portion whereof
reads as under :
in the schedules are allotted with Code Numbers, which are developed by the
International Customs Organization as harmonised System of Nomenclature (HSN)
and adopted by the Customs Tariff Act, 1975. However, there are certain entries
in the schedules for which HSN Numbers are not given. Those commodities which
are given with HSN Number should be given the same meaning as given in the
Customs Tariff Act, 1975. Those commodities, which are not given with HSN
Number, should be interpreted, as the case may be, in common parlance or
commercial parlance. While interpreting a commodity, if any inconsistency is
observed between the meaning of a commodity without HSN Number and the meaning
of a commodity with HSN Number, the commodity should be interpreted by including
it in that entry which is having the HSN Number.
HSN Numbers are
allotted in the Schedules either in four digits or in six digits or in eight
digits. The four digit numbers indicate the heading in the HSN classification,
six digit numbers indicate the sub-heading and the eight digit numbers indicate
the specific commodity number. While interpreting the commodities in the
Schedules, the following guidelines may be followed.
I. ... ... ...
II. ... ... ...
S.L.P.(C)No.113 of 2008 .... (contd.) -4- III. The commodities which are given
eight digit HSN Number shall mean that commodity which bears that HSN
so far as the Revenue is concerned, it relies on clause IV thereof which reads
as under :
"IV. As an
exception to the above rules, there are certain entries in the Schedules, which
bear eight digit numbers but the four digit heading numbers of such commodities
are given for some other commodities mentioned elsewhere. In such cases, the
four digit heading shall include only those commodities under that heading
excluding that commodity for which the eight digit numbers are given. Similar
cases are available in the case of six digit numbers also. In such cases the
above principle shall apply mutatis mutandis."
appellant contends that if the said entry viz., 3808 of the Customs Tariff Act
is read with Entry 66 of the Notification, it will be evident that the same is
distinct and different from the item which is at serial no.66 of the
Notification being HSN Code 8516.79.20.
the contention of the Revenue, on the other hand, is that as the language
employed in the Notification itself is clear and unambiguous, it is not
necessary to refer to the HSN at all.
was assessed for the said assessment year for which value added tax at the rate
of 12.5% was levied on the products of the appellant in terms of the
Notification dated 21st January 2006.
filed a writ petition, inter alia, contending :
S.L.P.(C)No.113 of 2008 .... (contd.) -5- "K. If SRO No.82/2006 seeks to
amend and enhance the rate of Tax on Pesticides and Insecticides from 4% to
12.5%, it is ultra-vires the provisions of KVAT Act and void and illegal. This
is so, because by virtue of 6(1)(d), the Entry and rate of tax under Schedule-I
& III cannot be altered."
reliefs prayed for in the said writ petition are as under :
"i) To issue a
writ of Certiorari or other appropriate writ, order or direction to call for
records leading to Ext.P11 final Assessment Order for 2005-06 under the KVAT
Act and quash the same;
ii) To issue a Writ
of Mandamus or any other appropriate Writ, order or direction, directing the
respondents to refrain from enforcing the Assessment Order Ext.P11 and demand
pursuant thereto against the petitioner, pending disposal of the writ petition;
iii) To declare that
the sales turnover of products falling within the description Insecticides and
Pesticides which are manufactured under licence under the Insecticides Act and
falling within the description of Entry 44(5) of III Schedule of KVAT Act is
liable to be taxed only at 4% and levy of tax at 12.5% is illegal and
iv) To stay the
operation of Ext.P11 final Assessment Order for the Assessment Year 2005-06,
pending disposal of the W.P.(C);
And v) To grant such
other and further reliefs as this Hon'ble Court may deem fit and proper in the
facts and circumstances of the case, including the cost of this proceeding to
reason of the impugned judgment, the High Court, however, refused to entertain
the said writ petition opining that C.A.No.1888/09 @ S.L.P.(C)No.113 of 2008
.... (contd.) -6- the appellant has alternative remedies available to it as an
appeal against the order of assessment was maintainable.
Tyagi, the learned counsel appearing on behalf of the appellant would submit
that the High Court committed a serious error in refusing to entertain the writ
petition as the validity of the Notification was in question which could not
have been determined by the Revenue authorities.
Varma, the learned senior counsel appearing on behalf of the respondents, on
the other hand, would support the impugned judgment, inter alia, contending
that the appellant did not pray for a declaration that the said Notification
dated 21st January 2006 was invalid in law or otherwise could not have been
given a retrospective effect.
is true that the appellant, in its writ petition, has not made a specific prayer
that the said Notification dated 21st January 2006 was ultra vires or otherwise
illegal but, as indicated hereinbefore, a specific ground in that behalf had
been taken in respect thereof. Even otherwise, in our opinion, the question as
to whether the said Notification could have a retrospective effect or
retro-active operation being a jurisdictional fact, should have been determined
by the High Court in exercise of its writ jurisdiction under Article 226 of the
Constitution of India as it is well known that when an order of a statutory
authority is questioned on the ground that the same suffers from lack of
jurisdiction, alternative remedy may not be a bar. [See: Whirlpool Corporation
v. Registrar Trade Marks, Mumbai & Ors. C.A.No.1888/09 @ S.L.P.(C)No.113 of
2008 .... (contd.) -7- (1998) 8 SCC 1] and Committee of Management & Anr.
v. Vice Chancellor & Ors. 2008(16) SCALE 310].
the reasons aforementioned, we are of the opinion that it is a fit case where
the High Court should have entertained the writ petition. The impugned order is
set aside accordingly and the appeal is allowed.
appellant may be permitted to amend the prayer portion of the writ petition.
however, make it clear that we have not gone into the merit of the matter and
all the contentions of the parties, both on facts and in law, shall remain
..........................J. [S.B. SINHA] Sd/-
[DR. MUKUNDAKAM SHARMA] Sd/
..........................J. [R.M. LODHA]
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