1968 (7) TMI 66 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of entry 44H of Schedule C to the Bombay Sales Tax Act, 1959 regarding classification of shelving rack and binstak as iron and steel furniture.

In this case, the Tribunal referred two questions to the High Court concerning the interpretation of entry 44H of Schedule C to the Bombay Sales Tax Act, 1959. The first question was whether the shelving rack and binstak sold by the applicant could be classified as iron and steel furniture under entry 44H. The applicant, a private limited company manufacturing iron and steel products, argued that the shelving rack was meant for office use, not personal convenience or decoration, and therefore should not be considered furniture. The Deputy Commissioner disagreed, ruling that both items fell under the category of iron or steel furniture as per entry 44H. The Sales Tax Tribunal upheld this decision, leading to the reference to the High Court.

The High Court analyzed the definition of "furniture" using dictionary references, which indicated that furniture includes articles of convenience or decoration used to furnish a place of business or office. The court determined that the shelving rack, designed for keeping files and papers in an office or industrial setting, qualified as an article of convenience used for furnishing a place of business and thus fell under the definition of furniture. Additionally, the binstak, despite being described as a box, was found to be an article of convenience meant for furnishing places of business, especially considering its design for efficient storage and space-saving features. The court noted that the binstak was part of office furniture and, being made of steel, could be classified as steel furniture under entry 44H.

Moreover, the High Court considered the promotional materials of the applicant, which advertised the shelving racks and binstaks as part of their "Chandan Steel Furniture" line. The court emphasized that if the goods were stocked and sold as furniture by the company, and if customers purchased them as such, it constituted a sale of furniture. The court concluded that both the shelving racks and binstaks manufactured and sold by the applicant were indeed items of steel furniture, supported by the company's marketing and sales practices.

Therefore, the High Court held that both the shelving racks and binstaks qualified as steel furniture within the meaning of entry 44H of Schedule C to the Act. The court answered both questions in the affirmative and directed the assessee to pay the costs of the reference to the State of Gujarat. The reference was answered accordingly, affirming the classification of the items as iron and steel furniture for sales tax purposes.