Uttarakhand High Court
CTR/12/2013 on 11 March, 2022
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
SRI JUSTICE S.K. MISHRA, A.C.J.
AND
SRI JUSTICE R.C. KHULBE, J.
11TH MARCH, 2022
COMMERCIAL TAX REVISION No. 12 OF 2013
Between:
M/s Bhatia Sports Company.
...Revisionist
and
The Commissioner, Commercial Tax, Uttarakhand.
...Respondent
Counsel for the revisionist. : Mr. S.K. Posti, the learned Senior
Counsel assisted by Mr. Surendra
Posti, the learned counsel.
Counsel for the respondent. : Ms. Puja Banga, the learned Brief
Holder for the State of Uttarakhand.
Upon hearing the learned Counsel, the Court made
the following
JUDGMENT : (per Sri S.K. Mishra, A.C.J.)
By means of this Commercial Tax Revision,
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.
2. The simple question that arises 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 (hereinafter referred to as
the "VAT Act, 2005", for brevity), and shall be liable to
tax @ 4%, which was prevailing at the relevant time.
The assessment relates to the year 2008-09.
3. Mr. S.K. Posti, the learned Senior Counsel
appearing for the revisionist, relies upon the judgment
of the Hon'ble High Court of Allahabad in the case of
Cosco Industries Ltd. v. State of U.P. & others;
[2009 NTN (Vol. 40)], and submits that fitness
equipment should come within Entry No. 106 of
Schedule II (B) of the VAT Act, 2005.
4. We take note of the aforesaid judgment,
specifically paragraph nos. 6, 7 and 8. The Hon'ble High
Court of Allahabad has 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 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
that the said goods would fall under the referred entry.
In the said case the equipment of general physical
exercise, gymnastics, athletics were 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.
5. Applying this principle to this case, we hold
that Entry No. 106 of Schedule II(B) provides for sports
goods excluding apparels and footwear, and it is liable to
tax @ 4%. Fitness exercises are also held to be goods
relating to sports and games by the aforesaid judgment.
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.
6. We are unable to agree with the view taken by
the learned Tribunal in view of the fact that the question
is whether fitness equipment and other equipment of
exercises are sports good, or not. Whether HSN Code
was provided, or not, was not the question.
7. In that view of the matter, we are unable to
agree with the view taken by the learned President of
the Commercial Tax Tribunal, Uttarakhand, Dehradun
Bench, Dehradun in Second Appeal No. 141 of 2012
dated 02.07.2013. Moreover, Entry No. 106 of Schedule
II(B) of the VAT Act, 2005 itself shows that sports
goods, excluding apparels and footwear, have been
charged @ 4% tax. It does not exclude equipments of
exercises. So, our view is fortified by the said Entry
itself.
8. Hence, the present Commercial Tax Revision
is, hereby, allowed. The assessment order passed by
the Assistant Commissioner, Commercial Tax, Sector-1,
Dehradun dated 25.08.2012, and the order passed by
the learned Commercial Tax Tribunal, Uttarakhand,
Dehradun Bench, Dehradun in Second Appeal No. 141 of
2012 dated 02.07.2013, are, hereby, set-aside. It is
further directed that the goods are to be assessed @ 4%
tax.
9. Urgent copy of this order be supplied to the
learned counsel for the parties, as per Rules.
10. In sequel thereto, all pending applications also
stand disposed of.
________________
S.K. MISHRA, A.C.J.
_____________
R.C. KHULBE, J.
Dt: 11th March, 2022
Rahul
