VAT Act | Granite Stone Falls Within Definition Of Stone Under Entry 109, Taxable At 5%: Allahabad High Court

The Allahabad High Court has upheld the order of Tribunal classifying granite stone as “stone” under Entry 109 of the Schedule II Part A as per notification No.KANI-2-421/XI-9(1) dated 31.03.2011 under the Value Added Tax Act, 2008.

The Department challenged the order of the Tribunal classifying granite stone as “stone” under Entry 109 on grounds that the list in Entry 109 was exhaustive and did not include granite stone. It was argued that granite stone was unclassified and liable to be taxed at 14.5%.

Entry 109 of the Schedule II Part A as per notification No.KANI-2-421/XI-9(1) dated 31.03.2011 under the Value Added Tax Act, 2008 reads as: “sand, gitti, bajri, kankar, stone ballast, stone but not including glazed stone marble and marble chips”.

The bench comprising of Justice Shekhar B. Saraf held

“On an interpretation of the intention of the Legislature, I am of the view that glazed stone, marble and marble chips have been specifically excluded from the definition of "stone" in Entry No.109. If the Legislature wanted to exclude granite stone, the same could have very well been done by the amendment carried out on March 31, 2011.”

The Court observed that if the argument of the Department was accepted then several items which are ordinarily “stone” would be excluded, which is not permissible in law.

The Court upheld the order of the Tribunal carving a distinction between processed and unprocessed stones for the purpose of classification under Entry 109.

“Upon perusal of the order passed by the Tribunal, one finds that the Tribunal has held that stones that have not been processed in any manner, would be included in Entry No.109 whereas processed stones that have gone through some kind of procedure would be excluded. The above finding is in consonance with the fact that glazed stone has been specifically excluded from Entry No.109.”

Accordingly, the revision filed by the Department was dismissed.

Case Title: The Commissioner, Commercial Tax vS. M/S Peethambra Granites Pvt. Ltd. 2024 LiveLaw (AB) 32 [ SALES/TRADE TAX REVISION No. - 79 of 2023]

Case Citation: 2024 LiveLaw (AB) 32

Counsel for Revisionist: Ravi Shanker Pandey

Counsel for Opposite Party: Rahul Sripat, Senior advocate assisted by Saurabh Patel

Click Here To Read/Download Order