Summary
The Supreme Court held that gypsum board fell within gypsum in all its forms under amended Entry 56 of Schedule IV to the Rajasthan VAT Act for the assessment years in dispute, attracting 4% tax rather than the 12.5% residuary rate. The manufacturing process did not substantively change gypsum’s character. The separate entry introduced for gypsum board in 2014 governed the position thereafter.
Issues
- Whether gypsum board was covered by the expanded gypsum entry or the residuary entry for the relevant assessment years.
- What significance attached to the manufacturing process and the later separate entry.
Provisions considered
- Schedule IV, Entry 56, as substituted by notification dated 19 April 2006, Rajasthan Value Added Tax Act, 2003The expanded description gypsum in all its forms included gypsum board for the relevant assessment years at 4%. (¶¶ 2, 13, 14, 15, 16, 17, 18, 20)
- Schedule V, Entry 1 and later Entry 19(viii), Rajasthan Value Added Tax Act, 2003The former residuary rate did not apply; the separate gypsum-board entry introduced on 14 July 2014 explained the distinct subsequent treatment. (¶¶ 2, 21)
Held
- The amendment from gypsum to gypsum in all its forms had to receive substantive meaning. The expanded wording covered different forms of the commodity and was not confined to geometric changes in shape. (¶¶ 13, 14, 15, 16, 20)
- Crushing, dehydration, additives and paper sheets used to manufacture board did not substantively alter gypsum’s character. Its composition, manufacturing process and capacity for reuse supported inclusion within the expanded entry. (¶¶ 14, 17, 18)
- The separate gypsum-board entry introduced in Schedule V in 2014 excluded it from the earlier expanded entry thereafter; it did not justify applying the residuary entry for the assessment years in dispute. (¶ 21)
Result
Revenue appeals dismissed; gypsum board taxable under amended Schedule IV Entry 56 for the assessment years concerned. Parties to bear their own costs.