® IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE20H DAY OF AUGUST, 2014 P R E S E N T THE HON’BLE MR. JUSTICE N. KUMAR A N D THE HON’BLE MRS. JUSTICE RATHNAKALA STRP NOS.389-435 OF2012BETWEEN: M/S. RAMAN BOARDS LTD., (UNIT OF M/S. ABB LTD., ) REPRESENTED BY ITS ASST. VICE PRESIDENT FINANCE AND TAXATION, SANTHOSH KUMAR HEGDE, AGED ABOUT48YEARS, MYSORE-OOTY ROAD, TANDAVAPURA. MYSORE DISTRICT-571 302 …PETITIONER (BY SRI R.V.PRASAD, ADV.) AND: THE STATE OF KARNATAKA, THROUGH THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALAYA, 1ST MAIN ROAD, GANDHINAGAR, BANGALORE – 560 009. …RESPONDENT (BY SMT.S.SUJATHA, AGA.) - 2 - THESE SALES TAX REVISION PETITONS ARE FILED UNDER SEC.65(1) OF KARNATAKA VALUE ADDED TAX ACT, AGAINST THE
JUDGMENTDATED:29.06.2012 PASSED IN STA. NOS.2394 TO24402011 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL, BANGALORE, PARTLY ALLOWING THE APPEALS. N. KUMAR, J., MADE THE FOLLOWING: - THESE STRPs COMING ON FOR HEARING THIS DAY,
ORDERThese revision petitions are filed against the judgment dated 29.06.2012 passed in STA Nos.2394 to 2440 of 2011 by the Karnataka Appellate Tribunal, Bangalore, by partly allowing the appeals.
2. The petitioner - assessee is common in all the petitions. The assessee is a dealer registered under the provisions of the Central Sales Tax Act, 1956 (hereinafter referred to as ‘the CST Act’) and the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as ‘the KVAT Act’). The assessee is engaged in the manufacture and selling Paper and Paper Board which includes Electrical Insulated Press Board, commonly known as High Density Board.
3. The case of the petitioner is that, Electrical Insulated Press Board manufactured by them falls within the serial No.69 of the Third Schedule appended to the KVAT Act - 3 - 2003 and therefore, tax payable thereon is 4% which was subsequently enhanced to 5%. His grievance is that the authorities have now brought the said good under the residuary entry to tax at 12.5%. Therefore, the question of law that arise for our consideration in these proceedings is; “Whether Electrical Insulated Press Board commonly known as High Density Board is not paper and do not fall within the third schedule of serial No.69 of KVAT, 2003?.” 4. The petitioner in the petition has clearly set out the process of manufacture of the Board, which reads as under: ”1. The petitioner uses imported wood pulp to manufacture paper board. On import, the wood pulp is tested for fiber length, moisture content, mechanical and chemical properties. The Appellant imports sulphate pulp since the final product is used in transformers and press boards are good insulators.
2. The imported wood pulp is slushed in the Hydro Pulper and passed on to different stock preparation chests where impurities are removed and pulp is prepared. Firstly, pulp is converted - 4 - into pulpslurry; the pulpslurry is treated to a required degree of freeness that is water retention capacity of the pulp; this treated slurry is passed through a tank having Cylinder mould at a specified consistency. The cylinder mould packs the pulp fibre on 3. to the mesh by draining the excess water; such pulp is passed on to a felt (Synthetic felt used for carrying proper ply) which in turn is passed on to a making roll, a metallic cylinder; each turn of the making roll resulting in emergence of a paper ply. Each consecutive turn of the making roll will add an additional ply (layer) on to the already existing ply on the making roll. The number of turns/rotations of the making roll will decide the thickness of the resultant board. In the process, each ply/layer will get 4. bonded together by hydrogen bonding with water only. The pressure of making roll enhances the bonding as well as removal of excess moisture content and no adhesive is used in between two ply. By the above mentioned process the Appellant can achieve thickness for 0.8mm to 6mm; for getting 0.8mm board, a minimum of 17 to 19 ply/layers of paper are required. Each ply will be of 80 to 100 grams/sq. mtr and for getting higher thickness, the number of ply is increased - 5 - along with increase in grammage also (100 to 120 grams/sq mtr), then after completion of this stage wet board is formed. The wet board placed between two stainless steel wire mesh is taken through a conveyor to a hydraulic press where the Board will be subjected to pressing and drying. The drying is carried out by heating the metal plates and the board is then taken to the finishing section where the Board is trimmed and cut to required sizes. Finally the finished products are packed either in the polythene bags or in the wooden pallets depending upon the size and quantity.” Thereafter, he has also set out the use of the product, which reads as under: “Insulation paper and paper board (which are of electrical grade) are used in the electrical transformers as conductor wrapping and insulation barriers between winding coils. These items are used in transformers as insulation products. These papers will be multiplied to achieve desired thickness upto 6mm. Beyond thickness of 6mm, 2 or more boards are bonded together by using insulation adhesive; that the adhesive is used for bonding only and there is no coating on outer surfaces; that boards are pressed and dried in hot press; that final - 6 - products are cut into required sizes and is subjected for testing all required parameters as specified in the above specification. The said goods comply with the above specifications and for this reason these goods are called electrical grade paper and boards. The electrical grade insulation paper boards manufactured by the petitioner are known as electrical grade insulation paper products.” 5. Learned Counsel for the assessee Sri R.V. Prasad contended that paper of all kinds mentioned in serial No.69 of the third Schedule is exhaustive to include all types of papers. Further, when the legislature in addition to the said phrase used phrase ‘including’ and in the end also used the expression ‘excluding photographic paper’, which means except the goods which is excluded, all goods which could be described as paper fall within the said definition. He further contended that when a particular goods has to be grouped under a particular entry or a residuary entry, the Courts have to be liberal in including the said goods expressed in the contents of the Act rather than it to be taxed under residuary entry. He further contended that if under the Act, a particular goods is not defined then, in order to find out - 7 - the meaning, the theory of common parlance and if it is a specialized product, theory of trade parlance, has to be adopted. If so adopted, in trade parlance, persons who are in the trade are fully aware that said board is nothing but paper or it is made out of paper and therefore, he submits that seen from any angle, the impugned order passed by the authorities is unsustainable and assessee is entitled to the benefit of serial No.69 as these boards are nothing but products of paper.
6. Per contra, learned Counsel for the respondent department, Smt. S. Sujatha supporting the impugned order contended that in order to understand the nature of the goods, we cannot go by the scientific or technical meaning given. If that particular goods is not described in the Act or the Rules, one has to go by the theory of common parlance. All products of paper are sold in a stationery shop. The question is, whether this product is available in the stationery shop. If it is not available in the stationery shop, it cannot be grouped in serial No.69. Further, she also submitted that in deciding the nature of the goods, it is not - 8 - permissible to look into the definition of another enactment as laid down by the Apex Court. The products should be understood under the provisions of the Karnataka Sales Tax Act or KVAT, 2003. Seen from any angle, when at serial No.69 after stating that ‘papers of all kinds’, if the legislature has used the phrase ‘including’, it means if the goods in question is not included then it cannot be brought into the said entry under the head of ‘paper of all kinds’. Only in the absence of ‘the inclusive or exclusive’ phrase in a definition, expression of ‘all kinds of paper’ include all types of paper. In the instant case, the Legislature has used both the exclusive and inclusive words and this product does not find place in the inclusive meaning and therefore, it cannot be brought to the said entry. Therefore, the order of the authorities cannot be found fault with.
7. Learned Counsel relied on the various judgments in respect of their respective contentions.
8. Serial No.69 of the Third Schedule appended to KVAT Act, 2003 reads as under: - 9 - “69. (i) Paper of all kinds including ammonia paper, blotting paper, carbon paper, cellophane, PVC coated paper, stencil paper, tissue paper, water proof paper, art boards, card boards, corrugated boards, duplex boards, pulp boards, straw boards, triplex boards and the like, but excluding photographic paper. (ii) Waste paper, paper waste and Newsprint.” 9. Therefore, the goods which do not fall in any of the schedules were covered under Section 4(1)(b)ii under the heading ‘other goods’ and the rate of tax payable was 12.5%. In the instant case, the goods which is the subject matter of dispute is Electrical Insulated Press Board commonly known as High Density Board. The question is: Whether the goods falls under Serial No.69 or in the residuary Clause of ‘other goods’ or in other words, whether the tax payable is 4% or 12.5%?.
10. Serial No.69 (i) of the KVAT Act, 2003, deals with ‘Paper of all kinds’ and 69(ii) deals with ‘Waste paper, paper waste and Newsprint’. The word ‘paper’ has not been defined - 10 - under the KVAT Act, 2003. The meaning of the word ‘paper’ as given in various dictionaries is as follows:- Chamber's Dictionary - A material made in thin sheets as an aqueous deposit from linen rags esparto, wood-pulp, or other form of cellulose, used for writing and printing, wrapping and other purposes: sometimes extended to similar materials not so made, as papyrus, rice-paper; to the substance of which some wasps built their nests, to card board and even to tin foil (“silver paper”): a piece of paper. Oxford Dictionary - Substance used for writing, printing, drawing, wrapping up parcels and etc., made of interlaced fibers of rags, straw, wood, and etc. Webster's Dictionary – Paper, (ME Papire an Egyptian reed from the inner bark of which a kind of writing paper was made in ancient Egypt) A thin flexible material made in leaves or sheets from the pulp of rags, straw, wood or other fibrous material and used for writing or printing upon or for wrapping and various other purposes. A single piece, sheet or leaf of such material, smaller wrapper or card of paper usually including its contents; as a paper of pins; any material like paper, as papyrus.-. 11 - In Encyclopaedia Britannica [Volume 13 (15th Edition)]., "paper" has been defined as basic material used for written communication and the dissemination of information. Paper, the general name for the substance commonly used for writing upon or wrapping things in. In Unabridged Edition of the Random House Dictionary of the English Language the word "paper" has been defined as "a substance made from rags, straw, wood or other fibrous material, usually in thin sheets, used to bear writing or printing on or for wrapping things, decorating walls etc.” Oxford Advanced Learners’ Dictionary (Sixth Edition) page 917 – For writing/wrapping: (1) (Often in compounds) the thin material that you write and draw on and that is also used for wrapping and packing things a piece/sheet of paper a package wrapped in brown paper, recycled paper. From the above definition it is clear that in popular parlance, the word "paper" is understood as meaning a substance which is used for bearing, writing or printing, or for packing or for drawing on, or for decorating, or covering the walls. (See State of U.P. v. Kores (India) Limited, (1977) 39 STC8(SC)]. - 12 - McGraw-Hill Encyclopedia of Science & Technology (Volume 13, Page 75): Many excellent sheet materials made from synthetic polymers, derived from petroleum or natural gas, have displaced paper for many uses. Some are available for printing and writing as well as packaging, but usually such materials are substantially more costly than paper which is manufactured from renewable resources. The largest use for paper is in sheets of varied thickness, called paperboard, for packaging, followed by printing and writing papers and sanitary tissues. Substantial quantities of paper are impregnated with asphalt for use as roofing materials while other paper products are used as decorating materials, packaging materials, stamps, resin-impregnated laminates, and structural materials. The Encyclopedia Americana (International Edition Page
261) Paper: A matted or felted sheet of fibers - usually vegetable but sometimes mineral, animal, or synthetic - formed on a screen from a water suspension. The term “paper" is specifically limited to lighter weight, thinner, more flexible sheets formed in this manner. Sheets that are 0.012 inch (0.3 millimeter) or more in thickness, - 13 - including Bristol board, container board, box- board, wallboard, and so forth, are classified as paperboard. Paper derives its name from papyrus, a sheet of writing material made in ancient times by pasting together sections of Egyptian sedge (Cypreus papyrus), a marsh plant. In 'Encyclopaedia Britannica', (Volume 13), (15th Edition), 'paper' has been defined as “the basic material used for written communication and the dissemination of information. In the Unabridged Edition of ‘The Random House Dictionary of the English Language’, the word 'paper' has been defined as "a substance made from rags, straw, wood, or other fibrous material, usually in thin sheets, used to bear writing or printing or for wrapping things, decorating walls etc.
11. The expression “PAPER” has been the subject matter of decisions by various Courts. It is useful to notice the same.-. 14 - 12. In the case of NANDI PRINTERS PVT. LTD. V. STATE OF KARNATAKA reported in STC V.122 Page 164, this Court has held as under: “4. Learned High Court Government Pleader submitted that the expression "paper" as understood by the Tribunal is in order and does not call for any interference at our hands. The question for consideration is whether the expression used in Explanation II to entry 16B as was in force at the relevant time would include paper boards, pulp boards, and duplex boards. The expression used in entry 16B is only "paper". The legislative history indicates that the expression "paper" has been understood to include all kinds of paper including carbon paper, blotting paper, water proof paper, PVC coated paper, ferro paper, ammonia paper, stencil paper and the like. It is only by an amendment made to the Act on May 1, 1992. Entry No.65 provides that paper (all kinds) including carbon paper, blotting paper, water proof paper, etc., but excluding certain other kinds of paper such as photographic paper, pulp boards, art boards, duplex boards, triplex boards, card boards, corrugated boards and cellophane. This legislative practice itself would indicate that the expression "paper" was meant to include all kinds - 15 - of paper but whenever they included or excluded certain types of paper it was made clear by appropriate provision. In the absence of any inclusion or exclusion in the expression "paper" it must be held that it included all kinds of paper. Examined from that angle, the view taken by the Tribunal does not stand on close scrutiny. We should not merely be guided either by taking a narrow or common parlance meaning to expression "paper" as being used only for purposes of writing or printing but in such circumstance, there is such legislative history or practice. It must be understood that the paper boards are a thicker variety of paper containing thin sheets of paper would not put it out of category of "paper" and therefore, would not cease to be paper and is covered by the expression used in explanation II to entry 16B. Thus the order made by the Tribunal affirming the view taken by the appellate authority in this regard is set aside. Respondents are directed to delete this turnover from the assessment made.” 13. This Court in the case of Commissioner of Income Tax, Karnataka – II, Bangalore Vs. Senapathy Whiteley Limited reported in ITR V.158 Page 181, has held as under: - 16 - “The learned counsel for the assessee has produced before us some pieces of insulation boards manufactured by the assessee. They are thin sheets akin to the thin file board or paper board. The National Test House, Alipore, Calcutta, which is a Government of India Test House, after examining similar samples of insulation boards manufactured by the assessee, has certified that the samples manufactured by the assessee may generally be classified as press papers of electrical trade grade. On the basis of the said certificate, the Central Excise authorities are levying excise duty at the same rate as leviable on paper. The industry of the assessee and like industries are being handled under the Paper Directory of the Directorate General of Technical Development, Government of India. From these circumstances, it is clear that the products manufactured by the assessee are similar to paper. The most relevant circumstance is the classification for the purpose of levy of excise duty under the Central Excises and Salt Act, 1944. That levy is based on the test certificate issued by the National Test House, Alipore, Calcutta, which has classified the products manufactured by the assessee as press- papers of electrical trade grade. One Department of the Central Government has thus classified the - 17 - product in question as "paper" and we fail to understand why another Department of the same Government should hold otherwise without any compelling reason.” 14. In the case of 3m India Ltd. Bangalore vs. State of Karnataka reported in 2012 (74) Kar L.J.
1, this Court has held as under: “7. The records clearly disclose that the appellant imported jumbo rolls of paper of different colour, which contain strips of adhesive on one side, then cut the paper into pieces and prepare 'post-it-paper'. The adhesive at one edge on one side of the paper, which is generally used as a flag and also used for writing purposes. It can be reused number of times so long as the adhesive is working. The Customs authorities recognized it as a paper. Accordingly duty has been imposed. He made an application before the ACAR seeking clarification with regard to the applicability of rate of tax in respect of post-it- paper and Scotch Magic Self Adhesive Tape. The ACAR after considering the matter held that 'post- it-paper' falls under the category of unscheduled goods and it will not fall under entry 69(i) and liable to tax at the rate of 12.5% under Section - 18 - 4(1)(b). Insofar as Scotch Magic Self-Adhesive Tape is concerned, it falls under Entry 143 of the notification dated 30th September 2005 and liable to be taxed at the rate of 4% under Section 4(1)(a)(ii) of the Act. The application seeking for review was also rejected by the ACAR. Being aggrieved by the said order, the appellant preferred STA No.10 of 2000 before this Court and this court quashed the order passed by the ACAR and remanded the matter to the Commissioner to reconsider the same whether the paper is known as 'post-it-paper', which contains adhesive on one side of the paper which will be generally used as a 'flag' and used for writing purpose falls under Entry 69(i) of the Third Schedule. The Commissioner after examining the matter held that by cutting the paper into different sizes with the adhesive, a new commercial commodity distinct from the paper which cannot fall under Entry 69 and Entry 71 of the Act. Hence the said commodity has to be regarded as an unscheduled item liable to be taxed under sub-Section 1(b) of Section 4 of the Act. The said order has been questioned in this appeal.
9. Reading of the above entries makes it clear that Entry 69(i) covers papers of all kind, it obviously makes it clear that all kinds of paper - 19 - including the paper referred to "and the like" refers to papers of different kinds which was not mentioned in Entry 69(i). Entry 69(i) is the inclusive definition and it includes all kinds of paper "and the like". However, it excluded the photographic paper. In the instant case, the appellant is importing papers, the Customs Authorities have also treated it as paper with adhesive. The appellant cuts the papers into pieces and prepares 'post-it-paper' with adhesive on one side. It is generally used as a flag or used for writing purpose. Entry 69(i) clearly mentions the papers of all kind. The said entry covers 'post- it-paper' manufactured by the appellant. Entry 69(i) includes all kinds of papers without stipulating use or utility to which the said papers are put to. The contention of the appellant is fully supported by the judgment of the Bombay High Court in the case of ADDITIONAL COMMISSIONER OF SALES TAX, BOMBAY. Paragraph 11 of the said judgment reads as under: “11. Coming then to sub-entry (2) of Entry 24 of Schedule C to the Bombay Sales Tax act, 1959, it is to be noted that sub-entry (1) of Entry 24 covers eight kinds of paper, art board, art cards and ivory cards. These are - 20 - admittedly costly kinds of papers, cards and/or board. Sub-entry (2) opens with the expression "paper of all other kinds........"
The use of word "other” is not without significance. On the face of it is indicates that all items mentioned in sub-entry (1) are also kinds of paper including particular kind of cards and boards mentioned in the sub-entry and sub- entry(2) covers “paper of all other kinds", i.e., other than the kinds of paper covered by sub- entry(1). If that is so, there is no good reason why "mill board" should not be taken as covered by the expression "all other kinds of paper.” X x x x x The normal function of the word ‘including’ in an entry, to our mind, is to indicate that the items following the word "including" are though of the type of the main item in the entry, there could be some doubt as to whether the main entry covered them or not and, therefore, the legislature specifically mentioned those items in the entry to remove scope for any doubt. In other words, the items so included with the - 21 - prefix "including" would be of the type about which there could be some doubt as to whether they are covered or not by the main entry. The item about which there is no scope for doubt or there is comparatively less scope for doubt would accordingly stand automatically covered by the main items in the entry.” 15. In the case of State of Karnataka Vs. Kasturi and Sons reported in STC V.120 Page 564, this Court has held as under: “11. In this case, the assessee is engaged in the business of printing and selling newspapers. For the purpose of printing newspaper, it gets paper rolls and whatever is cut and found not suitable by it to undertake large scale printing of newspaper, or for writing or packing, is sold as waste paper. Some of the waste paper may be printed waste paper. The Tribunal has found that the paper that is sold by the assessee as waste paper, though considered as "waste paper" for the purpose of the assessee's business, can nevertheless be used for printing or writing or packing by others, that is, small dealers or printers or actual users. This apart, "paper" does not cease to be a paper merely because it is - 22 - printed or is of a smaller size than what could be used for the printing of newspapers. So long as any paper, even waste paper, can be used for any purpose for which paper is normally used, it will continue to be paper. Thus even by applying the user test laid down in Kores case [1977) 39 STC8(SC), the waste paper in question will be "paper".
12. Entry 3 of Part P of the Second Schedule to the Act includes blotting paper, waterproof paper, ammonia paper, stencil paper and carbon paper, which are not used for writing, printing or packing purpose. Further the said entry specifically includes paper of all kinds. Hence, it has to be held that even if waste paper is not capable of being used for writing, printing or packing, it would still fall under entry 3 of Part P of the Second Schedule, so long as it is "paper".
16. The Supreme Court in the case of Parle Biscuits (P) Ltd. V. State of Bihar and Others reported in STC V.139 Page 204,, has held as under: “6. The stand of the State that the entry at serial No.12 relates to "paper of all kinds" and cardboard boxes being made out of paper are also covered by the exclusion is not correct, - 23 - because serial No.12 of the notification deals with paper of all kinds and paper products of the enumerated category. Stand of the State that papers of all kinds is included cannot be correct for the simple reason that had same been the intention, there was no necessity for enumerating various paper products. The notification No.154 dated 28.1.1985 cannot be pressed into service to take out the effect of Section 13(1)(e) of the Act which was inserted subsequently.
10. Description of the goods as indicted in serial No.12 relates to "paper (of all kinds)" and inclusive definition in clear terms refers to certain paper products. Those which are relevant for our purpose are "cardboard" and "cartons". Had it been the intention to cover paper products of all kinds in the expression “paper” there was no necessity for including definite paper products.. xxx xxxx 11. From the above definition it is clear that in popular parlance, the word "paper" is understood as meaning a substance which is used for bearing, writing or printing, or for packing or for drawing on, or for decorating, or covering the walls. (See State of U.P. v. Kores (India) Limited, (1977) 39 STC8(SC)]. xxx xxx - 24 - 14. In common parlance, the meaning is not different.
15. That brings us to the residual question as to whether "card-board box" is covered by the entry "cardboard". We find that this question was elaborately dealt with in Cardboard Products case (1989) 73 STC438(Patna). While considering almost identical provision it was found as a fact that "cardboard box" is not the same as "cardboard". It is fairly accepted by learned counsel for the State that the decision was not challenged. We find that reasoning indicated in Card Board Products case (1989) 73 STC438(Patna) to hold that "cardboard" is not synonymous with "cardboard box", suffers from no infirmity. An article of merchandise whenever used in a taxation statute must always be understood in common parlance and must be given its popular sense, meaning that sense with which people are conversant and while dealing with the articles would attribute to it. The word "cardboard box" is not the term of an art. It is a commercial article to be understood in the sense that people dealing with such an article can understand it and would attribute to it in the common parlance.
18. It is well-established that in a taxing statute there is no room for any intendment and - 25 - regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption, it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different, but that is not the case here. In this connection we may refer to the observations of Lord Watson in Salomon v. Salomon and Co. (1897 A.C. 22, 38: Intention of the legislature is a common but very slippery phrase, which, popularly understood may signify anything from intention embodies in positive enactment to speculative opinion as to what the legislature probably would have meant; although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication."
- 26 - 17. The Supreme Court in the case of State Of U.P. And Another reported in AIR1977SC132 has held as under:
7. The word 'paper' admittedly not having been defined either in the U.P. Sales Tax Act, 1948 or the Rules made thereunder, it has to be understood according to the afore-said well established canon of construction in the sense in which persons dealing in and using the article understand it. It is, therefore, necessary to know what is paper as commonly or generally understood. The said word which is derived from the name of reedy plant papyrus and grows abundantly along the Nile river in Egypt is explained in “The Shorter Oxford English Dictionary (Volume
2) (Third Edition) as a substance composed of fibres interlaced into a compact web, made from linen and cotton rags, straw, wood, certain grasses, etc., which are macerated into a plup, dried and pressed; it is used for writing, printing, or drawing on, for wrapping things in, for covering the interior of walls, etc. xxx xxx 10. From the above definitions, it is clear that in popular parlance, the word 'paper' is - 27 - understood as meaning a substance which is used for bearing writing, or printing, or for packing, or for drawing on, or for decorating, or covering the walls. Now carbon paper which is manufactured by coating the tissue paper with a thermo-setting ink (made to a liquid consistency) based mainly on wax, non drying oils, pigments and dyes by means of a suitable coating roller and equalizing rod and then passing it through chilled rolls cannot be used for the aforesaid purposes but is used according to ‘The Random House Dictionary of the English Language’ between two sheets of plain paper in order to reproduce on the lower sheet that which is written or typed on the upper sheet i.e. making replicas or carbon copies cannot properly be described as paper.
16. Bearing in mind the ratio of the above- mentioned decisions, it is quite clear that the mere fact that the word 'paper' forms part of the denomination of a specialised article is not decisive of the question whether the article is paper as generally understood. The word 'paper' in the common parlance or in the commercial sense means paper which is used for printing, writing or packing purposes. We are, therefore, clearly of opinion that carbon paper is not paper - 28 - as envisaged by entry 2 of the aforesaid Notification.” 18. The Apex Court in the case of Alladi Venkateswarlu and Others v. Government of Andhra Pradesh and Another reported in STC V.41 Pages 397 and 398, which has held as under: “It is clear that there is a distinction between "paddy" as found in item 8 of the Second Schedule, and "rice", as mentioned under item 66 of the First Schedule. Apparently, the removal of the husk makes this difference. It is true that the First schedule, which contains as many as 136 items, includes a number of separate fairly detailed entries. Entry 58 is for bran or husk of "rice”, and entry 59 is for "deoiled bran of rice". It appears, therefore, that "rice in husk" is "paddy". When it is removed from husk, the husk and rice become separately taxable. But, there are no separate entries for rice and rice reduced into an edible form by heating or parching without any addition of ingredients or appreciable changes in chemical composition. The term "rice" is wide enough to include rice in its various forms whether edible or inedible. Rice in the form of grain is not edible. Parched rice and puffed rice - 29 - are edible. But, the entry "rice" seems to us to cover both forms of rice. At any rate, it is wide enough to cover them Even if parched rice and puffed rice could be looked upon as separate in commercial character from rice as grain offered for sale in a market, yet, keeping in view the other matters mentioned above, it could not be presumed that it was intended to exclude from entry 66 , “rice", which at any rate, had not so changed its identity as not to be describable as "rice" at all. “Muramaralu” was after all rice even though it was puffed. “Atukulu” even though parched was still called rice. We must also remember that the schedule which we have to interpret is in the English language where the term “rice” is still found in the rendering or description of “pelalu” as well as that of “muramaralu” in the English language. And, in any case, if two interpretations of a provision are possible, we think that we ought to, in such a case, apply the principle that the interpretation which favours the assessee should be preferred.” 19. The Supreme Court in the case of Collector of Central Excise, Hyderabad Vs. Bakelite Hylam Ltd. reported in (1997) 10 SCC350 has held as under: - 30 - “29. Industrial laminated sheets which are paper based are used for electrical insulation. Glass epoxy laminates are also used as electrical insulators. The New Tariff Act contains a separate Section XVI which deals, inter alia, with electrical equipment and parts thereof. Chapter 85 which forms part of Section XVI deals with electrical machinery and equipment and parts thereof. Entry 8546 deals with "electrical insulators of any material". There is, therefore, a specific entry in the New Tariff Act dealing with electrical insulator of any material. Under chapter 39 which deals with plastics and articles thereof, Chapter Note 2(n) which is set out earlier, provides that this chapter does not cover articles of Section XVI. Therefore, industrial laminates and glass epoxy laminates which are used for electrical insulation will not fall under Chapter 39 but will fall under Chapter 85 under Entry 8546.00 (Entry 7014 under the New Tariff Act prior to 1.3.1988).
30. It is the contention of the Central Excise Department that industrial laminates and glass epoxy laminates cannot be considered as electrical insulators because these sheets are required to be cut in the requisite shape and holes may have to be punched in them before they could be fitted as insulators. However, mere - 31 - cutting or punching holes does not amount to manufacture. These sheets have insulating properties and are used as electrical insulators. They cannot be taken out of the category of electrical insulators only because they have to be cut to the requisite shape or a few holes may be required to be punched in them in order that they may fit into the electrical instrument/appliance in question. The Tribunal, therefore, has correctly classified there industrial laminates and glass epoxy laminates under Tariff Item 8546 of the New Customs Tariff (after 1-3-1988) and under Tariff Entry 7014 under the New Customs Tariff up to 28-2-1988. Under the Old Customs Tariff, however, there is no express entry dealing with electrical insulators equivalent to Entry 8546.00 of the New Customs Tariff. Entry 15-A(2) of the Old Tariff will not cover these laminated sheets also for the same reason as in the case of decorative laminated sheets. These sheets, therefore, have been rightly classified under the residuary Tariff Entry 68 of the Old Customs Tariff.” RULES OF INTERPRETATION20 It is in the background of the aforesaid definitions and the interpretation placed on the word ‘paper’ by the Apex Court and other Courts, we have to interpret - 32 - Entry No.69. It is, therefore, necessary to keep in mind the rules of interpretation of a taxing statute.
21. In Attorney-General v. Winstanley, (1831) 2 Dow & Clark 302 = 6 ER740 Lord Tenterden stated as follows:- “Now, when we look at the words of an Act of Parliament, which are not applied to any particular science or art, we are to construe them as they are understood in common language.” 22. In Grenfell v. Commrs. of Inland Revenue, (1876) 1 Ex D242at page 248, Pollock, J.
pointed out:
"As to the construction of the Stamp Act, I think it was very properly urged that the statute is not to be construed according to the strict or technical meaning of the language contained in it, but that it is to be construed in its popular sense, meaning, of course, by the words 'popular sense' that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it."
- 33 - 23. The Apex Court in the case of Collector of Central Excise, Kanpur Vs. Krishna Carbon Paper Co. reported in AIR1988SUPREME COURT2223 has held as under: “9. It is well-settled, as mentioned before, that where no definition is provided in the statute itself, as in this case, for ascertaining the correct meaning of a fiscal entry reference to a dictionary is not always safe. The correct guide, it appears in such a case, is the context and the trade meaning.
10. The trade meaning is one which is prevalent in that particular trade where that goods is known or traded. If special type of goods is subject matter of a fiscal entry then that entry must be understood in the context of that particular trade, bearing in mind that particular word. Where, however, there is no evidence either way then the definition given and the meaning following from particular statute at particular time would be the decisive test.
11. In the famous Canadian case in King V. Planters Nut and Chocolate Company Limited, 1951 CLR Ex 122, Cameron J.
observed that it is not botanist's conception as to what constitutes a fruit or vegetable....but rather what would - 34 - ordinarily in matters of commerce in Canada be included there should be the guide. Similarly, this Court has held in Union of India V. Delhi Cloth and General Mills Co. Ltd., AIR1963SC791at page 79 para 12 that the view of the Indian Standard Institute as regards what is refined oil as known to the market in India must be preferred in the absence of any other reliable evidence. It must be emphasised in view of the arguments advanced in this case that the meaning should be as understood in the particular trade. In this case, we are construing not paper as such but a particular brand of paper with a meaning attributed to it. Sub item (2) of item 17 as was the position in 1976 paper referred to all kinds of paper including paper or paper boards which have been subjected to various treatments such as coating, impregnating. So, therefore, if all kinds of paper including coated paper is the goods, we have to find out the meaning attributed to those goods in the trade of those kinds of paper where transactions of those goods take place.
18. In the aforesaid view of the matter, we are of the opinion that as at the relevant time the definition of paper being paper board and all kinds of paper (including paper or paper boards which have been subjected to various treatments - 35 - such as coating and impregnating and in the light of the I.S. specifications as noted hereinbefore and there being no other reliable evidence as to how coated paper is understood in the market, except the opinion of the Indian Standard Institute in its specifications, in our opinion, the Tribunal was not right in the view it took.” 24. The Apex Court in the case of Union of India and Another Vs. Delhi Cloth and General Mills Co. Ltd. reported in AIR1963SC791(V.50 C.119), has held as under: “12. It will be unsafe however to base any conclusion on this extract without knowing the entire context in which the statement has been made or what has been said in other parts of the same book. The book itself was not produced before us. It is worth noticing that while the above statement is made by Mr. Bailey in respect of cottonseed oil the oil with which we are concerned is produced from groundnut oil and til- neither of which is cottonseed. Apart from all this we are of opinion that the view of the Indian Standard Institution as regards what is refined oil as known to the trade in India must be preferred to the opinion of this author. In this - 36 - connection it has also to be mentioned that the affidavits filed on behalf of the respondents are clear and categorical, while Krishnan's affidavit on which reliance was placed on behalf of the appellant is somewhat vague, halting and not categorical.” 25. In the case of R.N.Dongare and Another vs. State of Karnataka reported in STC V.77 Page 462, this Court has held as under: “7. The "entry" to be interpreted here is in a taxing statute; full effect should be given to all the words used therein. If a particular article would fall within a description, by the force of words used, it is impermissible to ignore that description, and denote the article under another entry, by a process of reasoning.
8. In the instant case, entry No.78 is attracted by the Revenue, only by a process of interpretation of the words "and the like" in the said entry. But, entry No.110 is clearly attracted by the application of a simple and direct test of giving full meaning to the words used therein, that is to say, by giving due weight and effect to the meaning conveyed by the words "all articles - 37 - made of plastics ....."
. Therefore, we are of the view that the approach of the revising authority as well as of the Tribunal in applying entry No.78 was not proper. Further, if there is any doubt as to which entry a particular article would fall, the benefit of doubt should be extended to the assessee in view of the well-established principle governing the interpretation of a taxing statute.” 26. In the case of Business Forms Ltd. Vs. Commissioner of Commercial Taxes reported in STC V.59 page 86, this Court has held as under: “8. We may, at the outset, state that the classification of the said goods for the purpose of levy under the Central Excise Act, furnishes no guidance for determining the rate of levy under the State Sales Tax Act. We have to examine the meaning of the paper as understood in common parlance. Entry 125 of the Second Schedule appears to be comprehensive in terms. It takes within its fold "all kinds of paper", excluding those specifically set out therein. Those which are excluded are only the items mentioned under serial No.55 and no other.” - 38 - 27. The Supreme Court in the case of Commissioner of Central Excise Vs. Carrier Aircon Ltd. reported in STC V.147 Page 421, has held as under: “15. The end use to which the product is put to by itself cannot be determinative of the classification of the product. (See Indian Aluminium Cables Ltd. v. Union of India [(1985) 3 SCC284. There are a number of factors which have to be taken into consideration for determining the classification of a product. For the purposes of classification the relevant factors, inter alia, are statutory fiscal entry, the basic character, function and use of the goods. When a commodity falls within a tariff entry by virtue of the purpose for which it is put to, the end use to which the product is put to, cannot determine the classification of that product.” 28. The Supreme Court in the case of Annapurna Biscuit Manufacturing Co. Vs. Commissioner of Sales Tax, U.P., Lucknow reported in STC V.48 Page 254, has held as under: “It is a well settled rule of construction that the words used in a law imposing a tax should be construed in the same way in which they are - 39 - understood in ordinary parlance in the area in which the law is in force. If an expression is capable of a wider meaning as well as narrower meaning the question whether the wider or the narrower meaning should be given depends on the context and the background of the case.” 29. The Supreme Court in the case of Annapurna Carbon Industries Co. V. State of Andhra Pradesh reported in STC V.37 Page 378, has held as under: “It will be noticed that the entry we have to interpret includes “parts" as well as "accessories" which are required for use in projectors or other cinematographic equipment. We think that the Andhra Pradesh High Court correctly held that the main use of the arc carbons under consideration was duly proved to be that of production of powerful light used in projectors in cinemas. The fact that they can also be used for search lights, signalling, stage lighting, or where powerful lighting for photography or other purposes may be required, could not detract from the classification to which the carbon arcs belong. That is determined by their ordinary or commonly known purpose or user. This, as already observed by us, is evident from the fact that they - 40 - are known as "cinema arc carbons" in the market.“ 30. The Supreme Court in the case of Porritts & Spencer (Asia) Ltd. V. State of Haryana reported in STC V.42 Page 433, has held as under: “It was said by Holmes, J., in his inimitable style:
"A word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used."
Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clearly expressed by the Legislature. The reason is that as pointed out by Story, J., in 200 Chests of Tea, the Legislature does "not suppose our merchants to be naturalists, or geologists, or botanists". But here the word “textiles” is not sought by the assessee to be given a scientific or technical meaning in preference to its popular meaning. It has only one meaning. namely, a woven fabric and that is the meaning which it bears in ordinary parlance. It is true that our minds are conditioned by old and antiquated notions of - 41 - what are textiles and, therefore, it may sound a little strange to regard “dryer felts” as “textiles” But it must be remembered that the concept of “textiles” is not a static concept. It has, having regard to newly developing materials, methods, techniques and processes, a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language, be regarded as “textiles”. Take for example rayon and nylon fabrics which have now become very popular for making wearing apparel. When they first came to be made, they must have been intruders in the field of “textiles” because only cotton, silk and woollen fabrics were till then recognised as “textiles”. But today no one can dispute that rayon and nylon fabrics are textiles and can properly be described as such. We may take another example Which is nearer to the case before us.. It is common knowledge that certain kinds of hats are made out of felt and though felt is not ordinarily used for making wearing apparel, can it be suggested that felt is not a “textile”?. The character of fabric or material as textile does not depend upon the use to which it may be put. The uses of textiles in a fast developing economy are manifold and it is quite common now to find “textiles” being, used even for industrial purposes.”.-. 42 - 31. The Supreme Court in the case of Dunlop India Ltd. Vs. Union of India and others reported in AIR1977SC597 has held as under: “31. It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the Trade and its popular meaning should commend itself to the authority.
36. We are, however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to the described then see no difficulty for statutory classification under a particular entry.
37. It is good fiscal policy not to put people in doubt and quandary about their liability to duty. When a particular product like V.P. Latex known to trade and commerce in this country and abroad is imported, it would have been better if the article is, eo nomine put under a proper - 43 - classification to avoid controversy over the residuary clause. As a matter of fact in: the Red Book (Import Trade Control Policy of the Ministry of Commerce) under item 150, in section II, which relates to "rubber, raw and gutta percha, raw", synthetic latex including vinyl pyridine latex and copolymer of styrene butadiene latex are specifically included under the sub-head "Synthetic Rubber". We do not see any reason why the same policy could not have been followed in the I.C.T. book being complementary to each other. When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the percentage and consign it to an orphanage of the residuary clause. The question of competition between two rival classifications will, however, stand on a different footing.” 32. The Supreme Court in the case of State of U.P. and Another Vs. Kores (India) Ltd. reported in STC V.39 Page 8, has held as under: “It is well-settled that a word which is not defined in an enactment has to be understood in its - 44 - popular and commercial sense with reference to the context in which it occurs.” [ 33. From the aforesaid various definitions, it is clear that in popular parlance the word "paper" is understood as ‘a substance which is used for bearing, writing or printing, or for packing or for drawing on, or for decorating, or covering the walls’. Thus, the word ‘paper’ in the common parlance or in the commercial sense means ‘paper’ which is used for writing, printing, packing purposes or drawing or decorating or covering the walls. The legislative history of ‘paper’ indicates that the expression "paper" has been understood to include all kinds of paper including carbon paper, blotting paper, water proof paper, PVC coated paper, ferro paper, ammonia paper, stencil paper and the like. Therefore, we should not merely be guided either by taking a narrow or common parlance meaning to the expression "paper" as it is used only for the purposes of writing or printing, when there is such legislative history or practice. It is well settled that where no definition is provided in the statute itself as in this case, for ascertaining the correct meaning of a fiscal entry reference to a dictionary is not always safe. The correct - 45 - guide, it appears in such a case, is the content and the trade meaning. The word ‘paper’ is not the term of an art. It is a commercial article to be understood in the sense that people dealing with such an article can understand it and would attribute to it in the common parlance. An article of merchandise whenever used in a taxation statute must always be understood in a common parlance and must be given its popular sense meaning, with which people are conversant and while dealing with the articles would attribute to it. The trade meaning is one which is prevalent in that particular trade where that goods is known or traded. If special type of goods is subject matter of a fiscal entry then that entry must be understood in the context of that particular trade, bearing in mind that particular word. It must be understood that the paper boards or a thicker variety of paper containing thin sheets of paper would not take it out of category of "paper". Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clearly expressed by the Legislature. Where, however, there is no evidence either way - 46 - then, the definition given and the meaning following from particular statute at particular time would be the decisive test. It was said by Holmes, J., in his inimitable style that, "A word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used."
34. The Indian Standard Glossary of Terms used in Paper Trade and Industry gives the meaning of the Electrical Insulating Paper or Board at IS46611999 Page 69, reads as under: “Electrical Insulating Paper or Board: Paper or board having certain properties, namely, high electrical strength, durability, absence of conductive metallic particles and uniformity in thickness and formation. Such material is being used by the electrical industry for insulation.” 35. Chapter 1 – Preliminary of The Bureau of Indian Standards Act, 1986 is an Act to provide for the establishment of a Bureau for the harmonious development - 47 - of the activities of standardization, marking and quality certification of goods and for matters connected therewith or incidental thereto. Section 10 of the said Act vests in the Bureau to perform such duties as is assigned to it or to act in particular, the power includes, established, published and promote in such manner as may be prescribed to the Indian Standard in relation to any article or process.
36. In the case of the assesse itself, the Commissioner of the Central Excise, Customs and Service Tax while dealing with the question of process and manufacture of the goods of the assessee falls under which sub-heading, has passed an order holding that the Electrical Grade Insulation Press Board falls under the heading ‘4805’, which covers ‘Other uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specified in Note.3 to the said Chapter.
37. The "entry" to be interpreted here is in a taxing statute; full effect should be given to all the words used therein. If a particular article would fall within a description, - 48 - by the force of words used, it is impermissible to ignore that description and denote the article under another entry, by a process of reasoning. The meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand by them in the usual course. If an expression is capable of a wider meaning as well as narrower meaning, the question whether the wider or the narrower meaning should be given depends on the context and the background of the case. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described, then, there is no difficulty for statutory classification under a particular entry. The classification of the said goods for the purpose of levy under the Central Excise Act, furnishes no guidance for determining the rate of levy under the State Sales Tax Act. The definition of a word given for a specific purpose in an enactment cannot be treated upon to interpret the said word used in a general sense in another enactment. It is well settled rule of construction that the words used in a statute imposing the - 49 - tax, may be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force.
38. There are a number of factors which have to be taken into consideration for determining the classification of a product. For the purposes of classification, the relevant factors, inter alia are, statutory fiscal entry, the basic character, function and use of the goods. When a commodity falls within a tariff entry by virtue of the purpose for which it is put to, the end use to which the product is put to, cannot determine the classification of that product. It is well-established that in a taxing statute, there is no room for any intendment and regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the enactment. If the tax-payer is within the plain terms of the exemption, he cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the enactment or by necessary implication there from, the matter is different. The normal function of the word ‘including’ in an entry, is to - 50 - indicate that the items following the word "including" are those of the types of the main item in the entry. There could be some doubt as to whether the main entry covered them or not and therefore, the legislature specifically mentioned those items in the entry to remove scope for any doubt. In other words, the items so included with the prefix "including" would be of the type about which there could be some doubt as to whether they are covered or not by the main entry. The item about which there is no scope for doubt or there is comparatively less scope for doubt would accordingly stand automatically covered by the main items in the entry. In the absence of any inclusion or exclusion of words in the expression “paper”, it must be held that it includes ‘all kinds of paper’. In this background, when we look at serial No.69, ‘papers of all kinds’ should include all types of paper. In various judgments, the Courts have held that waste paper, paper waste or newspaper are not included in the word ‘paper’. The legislature now has consciously included this paper in Serial No.69. However, after using the words ‘paper of all kinds’, they have used the word ‘including’, it means, the types of papers set out after the word including was not included in the word ‘paper of all kinds’. The reason appears - 51 - to be again because of some judgments, there was a doubt whether ammonia paper, blotting paper, carbon paper, cellophane, PVC coated paper, stencil paper, tissue paper, water proof paper, art boards, card boards, corrugated boards, duplex boards, pulp boards, straw boards, triplex boards were paper or not. Therefore, learning from the past experience, the legislature has expressly mentioned that all these papers are included in the word ‘paper’ and they have also used the word ‘and the like’. However expressly they have excluded the word photographic paper. Therefore, the legislature has clearly expressed what are those papers which are included in the word ‘paper’. Therefore, when a particular item falls within the word, description of paper is not in doubt, it is the word ‘included’ in the phrase ‘paper of all kinds’. If there is any doubt, then, all those doubtful goods are included by expressing the same in serial No.69 of the third schedule. If there is any doubt as to the particular item is paper or not, then in the context of the said paper being understood in common parlance which it undergoes before a final product is reached, we have to see whether that product is included in the word ‘paper’.-. 52 - 39. Keeping in mind these principles, if we look at the item, which is in dispute, it is called as Electrical Insulated Press Board, which is commonly known as High Density Board. In the aforesaid description, the word ‘paper’ do not find a place. If we go by the Indian Standard Glossary Terms used in Paper Trade and Industry, the said Electrical Insulated Press Board is described as ‘having certain properties, namely, high electrical strength, durability, absence of conductive metallic particles and uniformity in thickness and formation. Such material is being used by the electrical industry for insulation’. Therefore, it is clear that the said goods is excessively used in an electrical industry and not used in common parlance for the purpose of writing, printing, packing, drawing, decorating or covering walls.
40. When we look at the process of manufacture of this item, which is extracted above, indicates that this product is manufactured by imported wood pulp. It is tested for fiber length, moisture content, mechanical and chemical properties. The petitioner imports sulphate pulp. The imported wood pulp is slushed in the Hydro Pulper and passed on to different stock preparation chests where - 53 - impurities are removed and the pulp is prepared. Then the process of pulp being converted into layers. After removal of the layers, they get bonded together by hydrogen bonding with water only. After removal of excess moisture content and no adhesive is used in between two ply. By the above mentioned process, the petitioner can achieve thickness for 0.8 mm to 6 mm and a wet board is formed. Thereafter, the wet board placed between two stainless steel wire mesh is taken through a conveyor to a hydraulic press where the Board will be subjected to pressing and drying. The drying is carried out by heating the metal plates and the board is then taken to the finishing section where the Board is trimmed and cut to required sizes. Finally, the finished products are packed either in the polythene bags or in the wooden pallets depending upon the size and quantity. Then insulation paper and paper board of electrical grade are used in the electrical transformers as conductor wrapping and insulation barriers between winding coils. These items are used in transformers as insulation products. Thus, the Electrical Insulation Press Board manufactured is under Electrical Grade Insulation Board products. If we go through this process, one thing is clear that though the raw material - 54 - used is a wood pulp or sulphate pulp, the process it undergoes and the purposes for which it is manufactured, clearly demonstrates that it is not used as a paper. When we look at the relevant factors, such as a basic character, function and the use of the goods and the statutory fiscal entry, it is clear that the intention was not to treat it as paper. Though in the instant case, we have to go not by the popular meaning but trade meaning. Even though the persons who are in trade, may be aware that the same process is undergone, similar to the one which is used for manufacturing paper, they are clear in their mind that it is not a paper but it is na electrical insulation press board or high density board which is used in the electrical transformers as conductor wrapping and insulation barriers between winding coils. In the trade parlance, it is understood as electrical goods. Therefore, that may be the reason why the legislature took the pain to expressly state as to what are the types of paper included in the expression ‘paper of all kinds’. They have excluded this particular type of paper. Therefore, the paper of all kinds is a comprehensive and an inclusive definition. It is not possible to treat the Electrical Insulated Press Board/High Density Board as a - 55 - paper, so as to fall within the third schedule of the KVAT Act, 2003. Section 3 of the KVAT Act, 2003 is the charging section. It provides that tax shall be levied on every sale of goods in the State by a registered dealer or a dealer liable to be registered, in accordance with the provisions of this Act. Section 4 of the KVAT Act, 2003 deals with liability to tax and rates thereof. Section 4(1) of the KVAT Act, 2003, provides that every dealer who is required to be registered as specified in Sections 22 to 24 of the Act, shall be liable to pay tax on his taxable turnover in respect of the goods mentioned in second, third and fourth schedule, at the rates mentioned therein. Insofar as the goods mentioned in the third schedule is concerned, the rate of tax is 4%.
41. Therefore, the authorities are justified in levying tax under the heading ‘all other goods’ and the rate of tax at 12.5%. It is the finding which the Tribunal and suo motu revision authorities have concurrently recorded and therefore, we do not see any justification to interfere with the well considered order of the authorities. Hence, we answer the substantial question of law in favour of the Revenue and - 56 - against the assessee. Accordingly, the revision petitions are dismissed. Sd/- JUDGE Sd/- JUDGE nvj