Tax Imposed Is Based on the Nature of Products and the Category They Fall in: Tripura High Court

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Excerpt

The Petitioner has challenged the order of the Superintendent of taxes, Government of Tripura. The main dispute being that the tax is to be applied according to cosmetics or ayurvedic products imported to India.

Brief Facts

The Petitioner imported several items such as Glow Fair Moisturiser, Glow Mint Moisturiser etc. These items were claimed to be in nature of ayurvedic medicines and drugs on which tax slab is 5%. But Superintendent of Taxes, Government of Tripura holds belief that the items were cosmetic in nature on which tax slab is 12.5%. So, the department demanded additional value added tax under Tripura Value Added Tax, 2004. On 2014 the order was given by the Superintendent of Taxes, Tax Audit Cell. After the order, the Petitioner filed a revision petition with the Commissioner. The Assessing Officer was hired for making assessment of the products. In order of Assessing Officer, penalty was imposed on the Petitioner. This order was challenged by the Petitioner in the petition.

Petitioner’s Argument

Learned Counsel for the Petitioner mentioned the fact that the Tax Audit Officer had no authority to make any assessment. Further, the assessment done was without sending the samples of chemical analysis. The Petitioner’s Counsel represented that drugs and medicines were imported by the Petitioner.

Respondent’s Argument

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Learned Counsel representing the Respondent opposed the petition stating the fact that the petitioner did not produced the samples for chemical analysis. No choice was left with Assessing Officer but to proceed the investigation without the chemical sample analysis. Respondent’s Counsel mentioned the fact that the names of the substances imported clearly suggest that they were in nature of cosmetics. And also, the Petitioner did not present any proof to show that the products imported were ayurvedic drugs. The department stated that to deal in Ayurveda, license was required. No such license was provided.

Court’s Judgment  

The Court observed that the name of the products clearly suggested that the products are cosmetic in nature. Even the supplier was described as a cosmetic exporter. That is insufficient to prove the title of products. However, the petitioner did not leave the Assessing Officer with any another way. The Petitioner failed to provide the department with any chemical sample for analysis. Therefore, the petition got dismissed. The Court ordered the Petitioner to pay the imposed penalty.

Click here to read the judgment.


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