1968 (11) TMI 94 - HC - VAT and Sales Tax

Summary

Issues: Classification of hospital equipment as furniture under U.P. Sales Tax Act.

The judgment delivered by the Court addressed the classification of various hospital equipment items manufactured and sold by the assessee under the U.P. Sales Tax Act. The Sales Tax Officer initially categorized the items as furniture, subjecting them to a higher tax rate under a specific notification. The Judge (Appeals) Sales Tax allowed the appeal only in respect of operation tables, ruling that they could not be considered furniture. Subsequently, the Judge (Revisions) Sales Tax dismissed the revision application, leading to the current reference to the High Court to determine whether the remaining articles constituted unclassified items chargeable under section 3 or fell under the category of furniture under section 3-A of the Act.

The Court analyzed the definition of "furniture" as per Notification No. ST-905/X and various dictionaries, emphasizing that furniture includes articles used for convenience or decoration in a house or apartment. The revenue contended that the hospital equipment in question could also be used in a dwelling place, justifying their classification as furniture. However, the Court noted the absence of detailed descriptions, designs, or equipment of the items in the record provided by the revenue. The assessee presented catalogues depicting the items as modern hospital equipment, specially designed for hospital use. Despite some similarities to domestic items, the Court highlighted the lack of clarity in distinguishing between the two types of beds supplied by the assessee.

The Court critiqued the revenue's argument that the design and equipment of the articles did not preclude their use as furniture, emphasizing that the test should focus on whether the items are ordinarily used and accepted as furniture in the general sense. It rejected the notion that items capable of being used as furniture should be classified as such, emphasizing the importance of understanding the popular perception of furniture within the mercantile community and consumer public. Ultimately, the Court concluded that the articles in question should not be classified as furniture under the notification and should be treated as chargeable items under section 3 of the U.P. Sales Tax Act. The reference was answered in favor of the assessee, who was awarded costs and counsel's fees.