1967 (6) TMI 41 - HC - VAT and Sales Tax

Summary

Issues: Classification of welding electrodes as electrical goods under entry 41 of Schedule I to the Madras General Sales Tax Act, 1959.

Analysis:
The judgment by the Madras High Court, delivered by Justice Veeraswami, addressed the issue of whether welding electrodes should be considered electrical goods under entry 41 of the Madras General Sales Tax Act, 1959. The Tribunal had previously ruled that welding electrodes do not fall under this category as they are not used with electrical energy. The Court examined the language of entry 41, which includes items requiring electrical energy for use. The Court noted that prior to 1959, the predecessor of entry 41 did not specifically mention the requirement of using the article with electricity only. The revenue argued that since welding electrodes cannot be used without electrical energy, they should be classified as electrical goods under entry 41. However, the Court emphasized that while the use of the article with electricity is a test for entry 41, it is not the sole criterion. The goods must first be classifiable as electrical goods before applying this test.

The Court referenced a previous case, William Jacks and Co. Ltd. v. State of Madras, where it was held that a lathe fitted with an electrical motor was not inherently "electrical goods" solely because it required electrical power for operation. The Court established that for an article to be considered electrical goods, it must intrinsically fall within that category and also require electrical energy for use. Merely needing electricity for operation does not automatically classify an article as electrical goods. The Court provided examples such as a motor-car needing batteries or a dynamo, which does not make it an electrical good. Similarly, in the process of electroplating, the solution used with electricity does not make the particles themselves electrical goods. Applying this reasoning to welding electrodes, the Court concluded that while they require electrical energy for the welding process, they are essentially copper rods that melt with electrical power. Therefore, welding electrodes, in themselves, do not qualify as electrical goods under entry 41.

In light of the above analysis, the Court upheld the Tribunal's decision and dismissed the petition with costs, emphasizing that the nature of the goods must align with the definition of electrical goods before applying the test of requiring electrical energy for use.