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April 2016

M/s. G. K. Micro Metal Pvt. Ltd. vs. State of M. P. Ltd Others, [2013] 64 VST 147 (MP)

By C. B. Thakar Advocate G. G. Goyal
Janak Vaghani Chartered Accountants
Reading Time 2 mins
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VAT – Entries in Schedule – Aluminium Granules (Powder) – Are Same as Aluminium, Entry 36 of Part III of Schedule II of The Madhya Pradesh Value Added Tax Act, 2002.

FACTS
The assessee dealer, a company, sold aluminium powder and had paid sales tax @ 4% treating it aluminium covered by Entry 36 of Part II of the Schedule II of the Act. The department levied tax @12.5% under residual entry. The company filed writ petition before the Madhya Pradesh High Court (Gwalior Bench) against aforesaid assessment order.

HELD
Under Entry 36 of Part II of Schedule II of the Act, rate of tax on sale of aluminium is 4%. The company is selling aluminium granules (Powder). It is used as aluminium. There is no different use. Since the nature of the product is the same and use is the same, the petitioner company is not liable to pay tax 12.5% under residual entry. The residual entry would not be applicable when a specific rate of tax entry has been prescribed on a particular commodity. Accordingly, the High Court allowed the writ Petition filed by the company and directed the assessing authority to reassess the tax liability of the company after calculating payment of rate of tax payable by the company at four per cent on sale of aluminium granules (powder).

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