In this Commercial tax revision No. 12 of 2013, the revisionist is challenging the order passed by the Assistant Commissioner, Commercial Tax, Sector-1, Dehradun dated 25.08.2012, as confirmed by the Commercial Tax Tribunal, Uttarakhand, Dehradun Bench, Dehradun in Second Appeal No. 141 of 2012 dated 02.07.2013. In the case of M/s Bhatia Sports Company v. The Commissioner, Commercial Tax, Uttarakhand the HIGH COURT OF UTTARAKHAND has set aside the orders passed by the learned Commercial Tax Tribunal, Uttarakhand, Dehradun Bench, Dehradun in Second Appeal No. 141 of 2012.
The facts of the case is that a question raised for consideration, in this case, is whether fitness equipment like dumbbell, treadmill, exerciser, etc. shall be included in Entry No. 106 of Schedule II (B) of the Uttarakhand Value Added Tax Act, 2005, and shall be liable to tax @ 4%, which was prevailing at the relevant time.
The learned counsel on behalf of the revisionist relied upon a case passed by the Hon’ble High court of Allahabad and submits that fitness equipment should come within Entry No. 106 of Schedule II (B) of the VAT Act, 2005. In the above-mentioned case, the Hon’ble Court observed that sports goods have been exempted from levy of Value Added Tax with effect from 09.04.2008. Earlier, it was liable to tax @ 4%. However, Section 70 of the Act empowers the State Government to give Commodity Code numbers to any goods falling under the particular entry, and if the State Government allots the Commodity Code under a particular entry to any goods, in view of the provisions of Section 70 of the Act, it would be deemed that the said goods fall under the referred entry. In the said case, the Hon’ble Allahabad High Court further held that the said goods would fall under the referred entry. In the said case the equipment of general physical exercise, gymnastics, athletics was under Entry No. 60 i.e., sports goods, games, and toys. That being the position, the Hon’ble Allahabad High Court further held that they were of the considered opinion that the equipment for general physical exercise, gymnastics, athletics, etc. sold by the petitioner would fall within the entry of the sports goods and, therefore, exempted from payment of tax, as at that time it was exempted.
The learned Tribunal, however, did not accept the view taken by the Hon’ble High Court of Allahabad only on the ground that HSN Code was not provided in the VAT Act, 2005, which was drawn under the Uttar Pradesh Value Added Tax Act.
According to the Hon’ble High Court of Uttarakhand the VAT Act, 2005 itself shows that sports goods, excluding apparel and footwear, have been charged @ 4% tax, it does not exclude types of equipment of exercises. Hence, the court has allowed the present Commercial Tax Revision and order passed by the learned Assistant Commissioner, Commercial Tax, Sector-1, and the learned Commercial Tax Tribunal, Uttarakhand, in Second Appeal No. 141 of 2012, are, hereby, set aside. It is further directed that the goods are to be assessed @ 4% tax.
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Written by – Apeksha Khadelwal, Legal Assistant
