1976 (2) TMI 163 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of the term "glassware" in entry 44 of Schedule C to the Bombay Sales Tax Act, 1959.
2. Classification of magnifying glasses under the appropriate entry for tax purposes.
3. Applicability of trade parlance in determining the classification of goods.

Issue-wise Detailed Analysis:

1. Interpretation of the term "glassware" in entry 44 of Schedule C to the Bombay Sales Tax Act, 1959:
The primary issue revolves around whether the term "glassware" in entry 44 of Schedule C is limited to articles of domestic use. The Tribunal held that "glassware" should be interpreted as including only items of domestic use such as vessels, decorative pieces, and sanitaryware. The department argued that this interpretation was incorrect, pointing out that the entry's requirement for domestic use applied only to articles made of porcelain or glazed earthenware, not to glassware. The court noted that the term "glassware" in entry 44 was not explicitly restricted to domestic use, especially after the amendment of the entry in 1962, which omitted the requirement of domestic use for glassware.

2. Classification of magnifying glasses under the appropriate entry for tax purposes:
The respondents contended that magnifying glasses should be classified under entry 22 of Schedule E, which is a residuary entry, rather than under entry 44 of Schedule C. They argued that magnifying glasses were not predominantly made of glass, as the cost of the handles and frames exceeded the cost of the lenses. The Commissioner of Sales Tax initially rejected this argument, classifying the magnifying glasses under entry 44 of Schedule C. The Tribunal, however, concluded that magnifying glasses were not "glassware" within the meaning of entry 44, as they were not articles of daily use by common men.

3. Applicability of trade parlance in determining the classification of goods:
The court emphasized the importance of trade parlance in determining the classification of goods. It was noted that the respondents described their products as "optical appliances" in their application and were known as manufacturers of optical and surgical appliances. This description indicated that magnifying glasses were regarded in trade parlance as optical appliances rather than glassware. The court referred to previous judgments, including Tribuwandas Gulabchand & Bros. v. State of Maharashtra and Commissioner of Sales Tax v. Dawoodbhoy M. Tayabally, which supported the principle that the meaning of terms in tax entries should be gathered from trade parlance or common parlance in trade.

Conclusion:
The court concluded that magnifying glasses sold by the respondents could not be regarded as glassware and thus were not covered by entry 44 of Schedule C. The court reframed the question for determination as: "Whether, on the facts and in the circumstances of the case, the magnifying glasses (optical appliances) sold by the respondents are 'glasswares' for the purpose of entry 44 of Schedule C to the Bombay Sales Tax Act, 1959?" This question was answered in the negative, indicating that magnifying glasses should be classified under entry 22 of Schedule E. The reference was answered accordingly, with no order as to costs due to the absence of representation by the respondents.