AI Insights
The case involves multiple Sales Tax Revisions concerning the classification of memory cards under the Rajasthan Value Added Tax Act, 2003 (RVAT Act). The petitioner, M/s Shreepati Computers, argued that memory cards should be classified as IT products under specific entries that attract a lower tax rate. The revenue contended that these products fall under a residuary entry, leading to a higher tax rate. The court examined whether the memory cards qualify as 'prepared unrecorded media' for sound recording or similar recording, and whether they are IT products under the RVAT Act. The court's decision hinged on the interpretation of specific entries in the tax schedule and the burden of proof regarding the classification of the products.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 820830 (HC-RAJASTHAN)
Assessee PAN
Bench
Appeal Number
CRN Number
Appellant
Respondent
Appeal Type
Others
Pronouncement Date
14-12-2023
Assessment Year
misc
Judgement Text
"[2023:RJ-JP:24001] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Sales Tax Revision / Reference No. 17/2022 M/s Shreepati Computers, T-4, Salasar Plaza, Indira Bazaar, Jaipur Through Its Branch Manager Shri Mahendra Pareek, Son Of Shri Dwarka Prasad Pareek, Aged 51 Yeras, Resident Of Flat No. 302, Balaji Tower 1St, Vidhyadhar Nagar, Sikar Road, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes Department, Anti Evasion Zone-1, Jaipur . ----Respondent Connected With S.B. Sales Tax Revision / Reference No. 114/2020 M/s Sanwaria Taxpro Private Limited, B-22, Ii Floor, Sudarshanpura Indl. Area, Jaipur ----Petitioner Versus The Commissioner, Commercial Taxes, Rajasthan, Kar Bhawan, Ambedkar Circle, Jaipur ----Respondent S.B. Sales Tax Revision / Reference No. 115/2020 M/s Supertron Electronics Private Limited, 10, Ganesh Colony, Jln Marg, Jaipur. ----Petitioner Versus The Commissioner, Commercial Taxes, Rajasthan Kar Bhawan, Ambedkar Circle Jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 14/2022 M/s Shreepati Computers, T-4 Salasar Plaza, Indira Bazaar, Jaipur Through Its Branch Manager Shri Mahendra Pareek, Son Of Shri Dwarka Prasad Pareek, Aged 51 Years, Resident Of Flat No. 302, Balaji Tower 1St, Vidhydhar Nagar, Sikar Road, Jaipur. ----Petitioner Versus [2023:RJ-JP:24001] (2 of 23) [STR-17/2022] The Assistant Commissioner, Commercial Taxes Department, Anti Evasion, Zone-1, Jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 18/2022 M/s Shreepati Computers, T-4, Salasar Plaza, Indira Bazaar, Jaipur Through Its Branch Manager Shri Mahendra Pareek, Son Of Shri Dwarka Prasad Pareek, Aged 51 Yeras, Resident Of Flat No. 302, Balaji Tower 1St, Vidhyadhar Nagar, Sikar Road, Jaipur. ----Petitioner Versus Assistant Commissioner, Anti Evasion Raj-Iii, Jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 19/2022 M/s Shreepati Computech Pvt. Limited, T-4, Salasar Plaza, Indira Bazaar, Jaipur Through Its Branch Manager Shri Mahendra Pareek, Son Of Shri Dwarka Prasad Pareek, Aged 51 Yeras, Resident Of Flat No. 302, Balaji Tower 1St, Vidhyadhar Nagar, Sikar Road, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes Department, Anti Evasion Zone-1, Jaipur . ----Respondent S.B. Sales Tax Revision / Reference No. 20/2022 M/s Shreepati Computers, T-4, Salasar Plaza, Indira Bazaar, Jaipur Through Its Branch Manager Shri Mahendra Pareek, Son Of Shri Dwarka Prasad Pareek, Aged 51 Yeras, Resident Of Flat No. 302, Balaji Tower 1St, Vidhyadhar Nagar, Sikar Road, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes Department, Anti Evasion Zone-1, Jaipur . ----Respondent S.B. Sales Tax Revision / Reference No. 21/2022 M/s Shreepati Computers, T-4, Salasar Plaza, Indira Bazaar, Jaipur Through Its Branch Manager Shri Mahendra Pareek, Son Of Shri Dwarka Prasad Pareek, Aged 51 Yeras, Resident Of Flat No. 302, Balaji [2023:RJ-JP:24001] (3 of 23) [STR-17/2022] Tower 1St, Vidhyadhar Nagar, Sikar Road, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes Department, Anti Evasion Zone-1, Jaipur . ----Respondent S.B. Sales Tax Revision / Reference No. 156/2022 M/s Ingram Micro India Private Limited, 32-33, Sudershanpura Industrial Area, Jaipur Through Its Director Finance Rajat Kumar Samal. ----Petitioner Versus Assistant Commissioner, Anti Evasion, Zone I, Commercial Taxes Department,divisional Kar Bhawan, Jhalana Doongri, Jaipur. Now Assistant Commissioner, Circle A, Enforcement Wing, Rajasthan 2, Zone-I,jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 157/2022 M/s Ingram Micro India Private Limited, 32-33, Sudershanpura Industrial Area, Jaipur Through Its Director Finance Rajat Kumar Samal. ----Petitioner Versus Assistant Commissioner, Anti Evasion, Zone I, Commercial Taxes Department,divisional Kar Bhawan, Jhalana Doongri, Jaipur. Now Assistant Commissioner, Circle A, Enforcement Wing, Rajasthan 2, Zone-I,jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 158/2022 M/s Ingram Micro India Private Limited, 32-33, Sudershanpura Industrial Area, Jaipur Through Its Director Finance Rajat Kumar Samal. ----Petitioner Versus The Assistant Commissioner, Anti-Evasion, Zone-I, Commercial Taxes Department, Divisional Kar Bhawan, Jhalalna Doongri, Jaipur. Now [2023:RJ-JP:24001] (4 of 23) [STR-17/2022] Assistant Commissioner, Circle A, Enforcement Wing, Rajasthan 2, Zone I, Jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 1/2023 M/s Supertron Electronics Private Limited, 58, Dhuleshwar Bagh, C- Scheme, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes, Zone-First, Zonal Kar Bhawan Jhalana Area, Jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 2/2023 M/s Supertron Electronics Private Limited, 58, Dhuleshwar Bagh, C- Scheme, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes, Zone-First, Zonal Kar Bhawan Jhalana Area, Jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 3/2023 M/s Supertron Electronics Private Limited, 58, Dhuleshwar Bagh, C- Scheme, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes, Zone-First, Zonal Kar Bhawan Jhalana Area, Jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 4/2023 M/s Supertron Electronics Private Limited, 58, Dhuleshwar Bagh, C- Scheme, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes, Zone-First, Zonal Kar Bhawan Jhalana Area, Jaipur. ----Respondent [2023:RJ-JP:24001] (5 of 23) [STR-17/2022] S.B. Sales Tax Revision / Reference No. 5/2023 M/s Supertron Electronics Private Limited, 58, Dhuleshwar Bagh, C- Scheme, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes, Zone-First, Zonal Kar Bhawan Jhalana Area, Jaipur. ----Respondent S.B. Sales Tax Revision / Reference No. 6/2023 M/s Supertron Electronics Private Limited, 58, Dhuleshwar Bagh, C- Scheme, Jaipur. ----Petitioner Versus The Assistant Commissioner, Commercial Taxes, Zone-First, Zonal Kar Bhawan Jhalana Area, Jaipur. ----Respondent For Petitioner(s) : Mr. Alkesh Sharma with Mr. Ayush Sharma, Mr.Vikram Kumar Gogra, Mr. Dinesh Kumar For Respondent(s) : Mr. Punit Singhvi with Mr. Ayush Singh, Mr. Tanmay Mangal and Mr. Ajay Singh Rathore Mr. Shantnu Jugtawat with Mr. Nagendra Singh Adha HON'BLE MR. JUSTICE SAMEER JAIN Order Reportable Reserved on - 11/09/2023 Pronounced on - 14/12/2023 1. The present Sales Tax Revisions / References (for short \"STRs\"), filed under Section 84 of the Rajasthan Value Added Tax Act, 2003 (for short \"RVAT Act\"), were admitted on following questions of law: [2023:RJ-JP:24001] (6 of 23) [STR-17/2022] In STR No. 14/2022 and in STR Nos. 17-21/2022: “(a) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in ignoring the fact that the assessment order passed by the respondent Assistant Commissioner under Section 25 of Rajasthan Value Added Tax Act, 2003 was passed merely on a change of opinion and there was no reason to believe that the petitioner has avoided or evaded tax or has not paid tax in accordance with law or has availed input tax credit wrongly? (b) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in ignoring/overlooking the fact that Memory Cards are IT products covered under Entry No.3 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 per cent on ‘Computer system and peripherals, computer printers excluding multifunctional devices & electronic diaries’?” In STR Nos. 114-115/2020 and in STR Nos. 1-6/2023: “(a) Whether the ‘Memory Cards’ are not ‘Prepared unrecorded media’ as per entry no.10 of Schedule-IV of RVAT Act-2003 made available since introduction of RVAT in the State w.e.f. 1.4.2006? (b) Whether the notification no.2016-187 dated 08.03.2016 is not clarificatory in nature of entry no.10 of Schedule-IV of RVAT Act-03? (c) Whether the determination order of Commissioner is valid one after passing of nine (9) years?” In STR Nos. 156-158/2023: “(a) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in holding that Memory Cards are not IT products covered under Entry No.10 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 percent on “Prepared unrecorded media for sound recording or similar recording of other phenomena including Compact Disc (CD) and Digital Versatile Disc (DVD)? (b) Whether under the facts and circumstances of the present case, the Rajasthan Tax Board, Ajmer was justified in ignoring/overlooking the fact that alternatively [2023:RJ-JP:24001] (7 of 23) [STR-17/2022] Memory Cards are IT products covered under Entry No.3 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 which provides for levy of VAT at the rate of 5 percent on ‘Computer system and peripherals, computer printers excluding multi-functional devices & electronic diaries’?” 2. Since common question of law of classification of ‘memory cards’ under the RVAT Act is involved in all these STRs, with the consent of the parties, they were heard together and are now being decided by way of this common order. STR No. 17/2022 is taken as lead file to peruse the facts. SUBMISSIONS OF PETITIONER-ASSESSEE 3. Learned counsels for the petitioner-assessee submits that the petitioner-assessee are engaged in trading of different type of IT products including the goods in question, i.e. the ‘memory cards’. The petitioner-assessee had, since beginning, been effecting sale of the goods in question and charging tax @ 5/5.5 percent by treating the goods in question to be classifiable under Entry 10 of Part A of Schedule IV to the RVAT Act, which read as “Prepared unrecorded media for sound recording or similar recording of other phenomena including Compact Disc (CD) and Digital Versatile Disc (DVD)”. However, after a survey of the business premises being conducted by the respondent-revenue on 08.10.2015, Show Cause Notice (for short “SCN”) was issued to the petitioner-assessee under Section 25/26 of RVAT Act as the respondent-revenue had determined that the goods in question, i.e. the memory cards, were not covered under any of the specific entries and hence liable to be taxed at the residuary rate of 14/14.5 percent. Consequently, the assessment order dated [2023:RJ-JP:24001] (8 of 23) [STR-17/2022] 15.12.2015 was passed wherein additional tax, interest and penalty was imposed upon the petitioner-assessee. The Appellate Authority, vide order dated 29.03.2016, upheld the levy of tax and interest but set aside the penalty. The Tax Board, vide order dated 15.12.2021, had also maintained the levy of additional tax and interest. 4. Learned counsels for the petitioner-assessee contends that the petitioner-assessee was rightly classifying the goods in question as 'I.T Products', as specified in Entry No. 65 of Schedule IV to the RVAT Act and accordingly discharging its VAT liability by treating the same as ‘prepared unrecorded media’, as classifiable under Entry 10 of Part A of Schedule IV of the RVAT Act. Learned counsels further contends that all the authorities below have erred in law by classifying the goods in question under the residuary head and not the specific head and therefore erroneously imposed additional tax and interest upon the petitioner-assessee. In support of their contention that memory cards would form part of 'I.T. Products', learned counsel for the petitioner-assessee made the following submissions: 4.1. The first submission of learned counsels for the petitioner-assessee is that the revenue has not discharged its onus to prove that memory cards would not be included in the specific entry of Entry 10 of Part A of Schedule IV to the RVAT Act. It is submitted that neither any expert / technical opinion was sought nor any evidence was brought on record to prove their point. It is submitted that as per settled position of law, onus or burden to show that a product falls within a particular tariff item is [2023:RJ-JP:24001] (9 of 23) [STR-17/2022] always on the revenue and since the revenue has failed to discharge its onus, the reference ought to be allowed in the favour of the petitioner-assessee. Reliance in this regard is placed on Apex Court judgments of Union of India vs. M/s Garware Nylons Ltd. reported in (1996) 10 SCC 413, Voltas Ltd. vs. State of Gujarat reported in [(2015) 80 VST 12 (SC)], Commissioner of Central Excise vs. Hindustan Lever Ltd. reported in (2015) 10 SCC 742, Commissioner of Central Excise, Calcutta vs. Sharma Chemical Works reported in [(2003) 132 STC 251 (SC)], M/s Hindustan Poles Corporation Limited vs. Commissioner of Central Excise reported in [(2006) 145 STC 625 (SC)] and judgment of Division Bench of this Court in the case of State of Rajasthan and Ors. vs. Deys Medical Stores Ltd. and Ors. (DBCWP No. 2139/1999 decided on 27.07.2007) reported in (2008) 1 RLW 432. 4.2. The second submission of learned counsel for the petitioner-assessee is that is that it is an established cannon of classification that a specific entry would override a general entry. Reliance in this regard is placed on Apex Court judgments of Commissioner of Commercial Tax, U.P. vs. A.R. Thermosets (Pvt.) Ltd. reported in (2016) 16 SCC 122, State of Maharashtra vs. Bradma of India Ltd. reported in [(2005) 140 STC 17 (SC)], Hindustan Poles Corporation vs. Commissioner of Central Excise, Calcutta reported in [(2006) 145 STC 625 (SC)], and Krishi Utpadan Mandi Samiti and Ors. vs. Ved Ram reported in [2012 (277) ELT 299 (SC)]. It is [2023:RJ-JP:24001] (10 of 23) [STR-17/2022] contended that to merit classification in Entry No. 10 of Part A of Schedule IV to the RVAT Act, the goods should be ‘preprepared unrecorded media’ and the primary purpose of such good should be for ‘recording sound or similar recording or other phenomena’. The term ‘media’ contained in Entry No. 10 of Part A of Schedule IV to the RVAT Act, as per the Major Law Lexicon, is defined to mean the material on which data is copied, written or recorded. The memory cards traded by the petitioner-assessee are capable of recording data, information, sound, as well as video and hence memory cards qualify to be ‘media’, which are capable recording sound and images. 4.3. The third submission of learned counsel for the petitioner-assessee is that the Entry No. 10 of Part A of Schedule IV to the RVAT Act is inclusive and not exhaustive. The ‘inclusive clause’, specifies that various products such as Compact Disc (for short “CD”) and Digital Versatile Disc (for short “DVD”) shall be included in the said entry. It is submitted that the inclusive clause cannot be interpreted to restrict the scope of entry to only CD or DVD as the purpose of the inclusive clause is to include all such products which are capable of ‘sound recording or similar recording of other phenomena’, within the scope of the said entry. 4.4. The fourth submission of learned counsel for the petitioner-assessee is that the Entry No. 10 of Part A of Schedule IV to the RVAT Act cannot be restricted only to those ‘media’ which are only capable of recording sound as the entry itself contains ‘similar recording of other phenomena’. It is further submitted that even the specifically included items, i.e. CD and [2023:RJ-JP:24001] (11 of 23) [STR-17/2022] DVD, are capable of recording not just sound, but all other phenomena as well and therefore there exists no reasonable nexus to preclude memory cards from the specific entry. 4.5. The fifth submission of learned counsel for the petitioner-assessee is that the impugned orders of the authorities suffer from total non-application of mind. It is submitted that the authorities below merely relied on the determination order dated 15.09.2015 passed by the Commissioner, Commercial Taxes Rajasthan under Section 36 of RVAT Act in application filed by M/s. Sanwariya Taxpro Pvt. Ltd. Jaipur and M/s Balaji Solutions Pvt. Ltd. Jaipur wherein the Commissioner opined that since memory card can be used for purposes other than those mentioned in the entry and since the memory card can also be used in different devices, the same has to taxed as per the residual rate. It is contended that the determination order of the Commissioner is de hors the settled position of law and bereft of valid reasoning. It is contended that under taxing statues, the levy of tax on a particular commodity is not based on its possible uses, rather the tax is to be levied on basic characteristic of an item. If goods are capable of multiple use, then primary use will have to be seen. Reliance in this regard is placed on Apex Court judgments of Annapurna Carbon Industries Co. vs. State of Andhra Pradesh reported in (1976) 2 SCC 273, Union Carbide India Ltd. vs. State of A.P. reported in 1995 Supp (2) SCC 267, Krishi Utpadan Mandi Samiti and Ors. vs. Ved Ram reported in (2012) 4 SCC 496 and judgments of Bombay High Court in Commissioner of Sales Tax, Maharashtra State v. Shri Iron [2023:RJ-JP:24001] (12 of 23) [STR-17/2022] and Metal Works reported in 1995 SCC OnLine Bom 559 and Kirloskar Pneumatic Co. Ltd. vs. State of Maharashtra reported in 1984 SCC OnLine Bom 454. It is further contended that conclusion reached by the Commissioner is not in consonance with the reasoning adopted by the Commissioner himself as the Commissioner at one hand opines that the memory card enhances functionality of the computed and on the other hand concluded that it cannot be classified as an I.T Product. Thus, the product in question, i.e. memory card can also be classified under Entry 3 of Part A of Schedule IV to the RVAT Act which read as “Computer system and peripherals, computer printers excluding multifunctional devices, and electronic diaries”. It is submitted that Part A of Schedule IV, which germinates from Entry No. 65 of Schedule IV, lays out a comprehensive list of I.T. products, for which a lower rate of tax is prescribed. It is submitted that different I.T. products may get classified under one or more items specified in Part A as entries in Part A are not water-tight or mutually exclusive. This is more so when the product is capable of being used in a fungible manner like in the case of memory cards. Reliance is placed on Gauhati High Court judgment of Sterlite Optical Technologies Ltd. Vs. Oil India Limited & Ors. reported in [(2008) 14 VST 9 (Gauhati)], Madras High Court judgments of State of Tamil Nadu vs. CMC Limited reported in [(2014) 75 VST 413 (Mad.)], Canon India Pvt. Ltd. vs. State of Tamil Nadu reported in [(2015) 80 VST 483 (Mad.)], and judgment of this Court in Compuage Infocom Limited and Ors. vs. The Assistant Commissioner, Rajasthan, Anti-Evasion-I [2023:RJ-JP:24001] (13 of 23) [STR-17/2022] and Ors. (S.B. STR No. 182/2017; decided on 30.05.2023; Neutral Citation: 2023/RJJP/12108). 4.6. The sixth submission of learned counsels for the petitioner-assessee is that by virtue of Notification No. 2016-187 dated 08.03.2016, there was an amendment in the RVAT Act and the Entry No. 10 of Part A of Schedule IV to the RVAT Act was substituted and the amended entry, which specifically included ‘Memory Card’, read as follows: “Data storage and recording devices including Compact Disc (CD), Digital Versatile Disc (DVD), Pen Drive, SD card, Memory Card, etc.” It is contended that this amendment clearly establishes that the goods in question were always I.T. products and continue to remain so. It is contended that this since this amendment was clarificatory in nature, the same would have retrospective effect as per Apex Court judgment of Sree Sankaracharya University of Sanskrit Vs. Dr. Manu reported in AIR 2023 SC 2645. 4.7. The seventh submission of learned counsels for the petitioner-assessee is that reassessment cannot be made merely on change of opinion. It is submitted that the petitioner-assessee were classifying the goods in question under the specific entry for nearly a decade and in this period regular assessment was done by the respondent-revenue without any reservations whatsoever. However, after a lapse of substantial period of time, merely on the basis of opinion of the Commissioner, reassessment was made, which is impermissible. Reliance in this regard is placed on Apex Court judgments of State of U.P. v. Aryaverth Chawal Udyog [2023:RJ-JP:24001] (14 of 23) [STR-17/2022] reported in (2015) 17 SCC 324, Income Tax Officer, Calcutta and Ors. vs. Lakhmani Mewal Das reported in (1976) 3 SCC 757, Calcutta Discount Company Limited vs. Income Tax Officer reported in AIR 1961 SC 372, Deputy Commissioner of Agricultural Income Tax and Sales Tax, Quilon vs. Dhanalakshmi Vilas Cashew Co. reported in (1970) 3 SCC 273, State of Kerala vs. K.E. Nainan reported in (1970) 3 SCC 353, State of U.P. v. Samsung India Electronics (P) Ltd. reported in 2023 SCC OnLine SC 866, and judgments of this Court in Assistant Commissioner, Works Contract and Leasing Tax-II, Jaipur vs. R.S. Electricals reported in [(2014) 69 VST 295 (Raj)], Bhilwara Synthetics Ltd. v. State of Rajasthan reported in 2015 SCC OnLine Raj 8665, and Linde India Limited vs. The Assistant Commissioner (S.B. STR No. 95/2022, decided on 11.09.2023; Neutral Citation: 2023/RJJP/19647). SUBMISSIONS OF RESPONDENT-REVENUE 5. Per contra, supporting the concurrent findings of the authorities below, learned counsels for the revenue submits that no question of law worth consideration arises in the present STRs. Learned counsel for the revenue submits that the specific entry where the assessee was classifying the goods in question was limited to media used for sound recording and other recording of like nature. It is contended that the said entry is specific and extended meaning cannot be given to the same to include data storage devices. It is further submitted that data storage devices, including memory cards, were only inserted in Part A of Schedule [2023:RJ-JP:24001] (15 of 23) [STR-17/2022] IV to the RVAT Act with effect from 08.03.2016 and the said amendment was not stated to be retrospective in nature. Learned counsel for the revenue submits that the notification dated 08.03.2016 was consciously silent on the retrospective application of the amendment and as per settled position of law, an amendment is always prospective in nature unless expressly stated otherwise. Reliance in this regard is placed on Apex Court judgment of Eureka Forbes Limited vs. State of Bihar and Ors. reported in (2011) 15 SCC 149. On the issue of reassessment, learned counsel for the revenue has relied on judgment of Division Bench of this Court in Rajasthan Felts Manufacturing Company v. State of Rajasthan reported in [(1980) 45 STC 274 (Raj)]. Learned counsel for the revenue has also relied on Chief Minister’s finance speech made on 08.03.2016 while introducing State Budget for the year 2016-17 wherein it was specifically stated that the VAT leviable on SD cards, memory cards, and pen drive, was being reduced from 14.5% to 5.5%. Learned counsel for the revenue has placed reliance on judgment of this Court in Assistant Commissioner vs. M/s Voltas Limited (S.B. STR No. 232/2020, decided on 30.11.2022) and Samsung India Electronics Private Limited vs. State of Rajasthan & Ors. (S.B. CWP No. 18687/2015 & other connected petitions, decided on 10.03.2017), to submit that recourse to residual entry is permitted when the goods in question are incapable of being placed in any specific entry. [2023:RJ-JP:24001] (16 of 23) [STR-17/2022] ANALYSIS 6. Heard the arguments advanced by both the sides, scanned the record of the STRs and considered the judgments cited at Bar. 7. Since the issue in question is classification of memory card under the RVAT Act, the relevant entries are reproduced as under: SCHEDULE IV [See Section 4] Goods taxable at 5.5% SI No. Description of Goods Rate of Tax % Conditions, if any 65 I.T. products as specified in Part-A of this Schedule 5.5% SCHEDULE IV Part-A (See S. No. 65 of Schedule IV) Goods under Category of IT Products SI No. Description of Goods Rate of Tax % 3 “Computer system and peripherals, networking items for LAN and WAN including wired and wireless switch, routers, modem, webcams, IP surveillance system, computer printers including multi functional devices and electronic diaries.” 5.5% 10 Prepared unrecorded media for sound recording or similar recording of other phenomena including Compact Disc (CD) and Digital Versatile Disc (DVD).” 5.5% 8. The primary contention of the petitioner-assessee is that memory card is an I.T product classifiable in Entry 10 or [2023:RJ-JP:24001] (17 of 23) [STR-17/2022] Entry 3 of Part A of Schedule IV to the RVAT Act, whereas the contention of the respondent-revenue is that the memory cards are not covered in any specific entry and are thus liable to be taxed at residuary rate as per Entry 78 of Schedule V to the RVAT Act. 9. It is noted that the standard practice followed by the petitioner-assessee, since inception, was classifying the goods in question as ‘I.T. products’ taxable as per Entry 10 of Part A of Schedule IV to the RVAT Act. The petitioner-assessee was regularly filing the returns as required under law and the jurisdictional assessing authority had accepted said classification for several years. It was only after the survey, which was conducted on 08.10.2015, that the opinion of the respondent- revenue changed - after about 9 years – only on account of the determination order dated 15.09.2015, passed under Section 36 of the RVAT Act by the Commissioner, Commercial Taxes Rajasthan, and the long-accepted classification was abandoned. On perusal of the impugned orders, it is apparent that the authorities merely relied on the determination order while adjudicating the claim of the petitioner-assessee. 10. Since the genesis of the entire controversy is the determination order dated 15.09.2015, it is considered necessary to adjudge the same, especially since the validity of the same is also challenged in some of the STRs. It is also deemed necessary to consider the context in which the application for determination was filed by the assessee. [2023:RJ-JP:24001] (18 of 23) [STR-17/2022] 10.1. Before 09.03.2015, ‘cellular telephones’ were covered under Entry 12 of Schedule IV to the RVAT Act and ‘parts and accessories’ thereof were covered under Entry 28 of Schedule IV to the RVAT Act, both attracting tax @ 5%. 10.2. Vide notification dated 09.03.2015, the State Government incorporated an Entry No. 18 for ‘Cellular phones, parts and accessories thereof’ in Schedule VI to the RVAT Act with specified rate of tax as 8%. 10.3. Some confusion arose with regard to taxability of memory cards, as the same could be classified as both I.T products or as accessories to cellphones. Accordingly, one of the petitioner-assessee, filed an application for determination of rate of tax on sale of memory cards. Consequently, the impugned determination order dated 15.09.2015 was passed, the operative portion of which is reproduced as under: “O;ogkjh ds dFku dks lquk x;k ,oa QeZ dh rjQ ls izLrqr nLrkostksa dk voyksdu fd;k x;kA bl Øe esa jktLFkku ewY; ifjof)Zr dj vf/kfu;e] 2003 dh vuqlwph IV-A dh izfof\"V la[;k 10 dk voyksdu fd;k x;kA tks fuEu izdkj ls vf/klwfpr gS%& 10 Prepared unrecorded media for sound recording or similar recording of other phenomena including Compact Disc (CD) and Digital versatile Disc (DVD) 5 bl izdkj mDr izfof\"V ls Li\"V gS fd CD, DVD, Magnetic Tape cassette for sound recording bl izfof\"V esa vkPNkfnr gksus ds dkj.k 5 izfr’kr dh nj ls dj ;ksX; gSA fdUrq Memory Card, (Micro S.D. & S.D. Card) video cassette mDr Js.kh esa 'kkfey ugha gSA blh izdkj Recorded CD, Recorded DVD Hkh mijksDr Js.kh esa 'kkfey ugha gSA [2023:RJ-JP:24001] (19 of 23) [STR-17/2022] eSeksjh dkMZ@,l-Mh- dkMZ lHkh izdkj ds ysiVkWi] eksckbZy ,oa VscysV] dSejk rFkk fofM;ks xse bR;kfn esa vko’;drk ds vuqlkj yxk;k tkrk gS rFkk bldk mi;ksx lkmUM fjdkWfMZx ds vykok Hkh lHkh izdkj ds MkVk bR;kfn dks laxzfgr djuk gS vkSj bl izdkj ;g lacaf/kr midj.k dh dk;kZRedrk (Functionalty) dks c
Other Referred Cases
Union of India vs. M/s Garware Nylons Ltd., Voltas Ltd. vs. State of Gujarat, Commissioner of Central Excise vs. Hindustan Lever Ltd., Commissioner of Central Excise, Calcutta vs. Sharma Chemical Works, M/s Hindustan Poles Corporation Limited vs. Commissioner of Central Excise, State of Rajasthan and Ors. vs. Deys Medical Stores Ltd. and Ors., Commissioner of Sales Tax, Maharashtra State v. Shri Iron and Metal Works, Kirloskar Pneumatic Co. Ltd. vs. State of Maharashtra, Sterlite Optical Technologies Ltd. Vs. Oil India Limited & Ors., State of Tamil Nadu vs. CMC Limited, Canon India Pvt. Ltd. vs. State of Tamil Nadu, Compuage Infocom Limited and Ors. vs. The Assistant Commissioner, Rajasthan, Anti-Evasion-I and Ors., Samsung India Electronics Private Limited vs. State of Rajasthan & Ors., Assistant Commissioner vs. M/s Voltas Limited, Rajasthan Felts Manufacturing Company vs. State of Rajasthan
Laws Referred To
Rajasthan Value Added Tax Act, 2003
1:1 Consultation on Tax Litigation
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1:1 Consultation on Tax Litigation
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1:1 Consultation on Business Valuations
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Non-Compete Agreement
₹0
Stress Management policy Letter
₹0
Minimum Alternate Tax (MAT): Comprehensive Overview and Key Changes under Finance Bill, 2026
Team Counselvise - February 06, 2026
Finance Bill, 2026: Key Direct Tax Amendments on Assessments and Appeals
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SEBI Resets Mutual Fund Rules: A Structural Shift for Investors
Team Counselvise - March 13, 2026