1976 (12) TMI 172 - HC - VAT and Sales Tax

Summary

Issues:
1. Rejection of petitioner's accounts
2. Assessment of tax on sales of leather cases for transistors as accessories
3. Assessment of tax on sales of leakproof battery cells as spare parts of transistors

Analysis:
The High Court of Madras heard a tax revision petition challenging the order of the Sales Tax Appellate Tribunal, Pondicherry, which decided against the petitioners on three points. Firstly, the rejection of the petitioner's accounts was not pursued further by the petitioners' counsel. Therefore, the Court proceeded to consider the remaining points regarding the assessment of tax on sales of leather cases for transistors and leakproof battery cells. The Tribunal held that leather cases for transistors constituted accessories as they added convenience to the transistors, falling within the description of goods in the relevant tax schedule. However, the Court disagreed with the Tribunal's conclusion on the sale of leakproof battery cells as spare parts of transistors.

Regarding the sale of leakproof battery cells, the Tribunal classified them as spare parts of transistors, justifying their inclusion under the tax schedule. The Court, however, analyzed the definition of "spare part" from various dictionaries, emphasizing that a spare part must be an essential component of the machine or apparatus. The Court highlighted that leakproof battery cells were not exclusively meant for transistors and could be used in other devices as well. Therefore, the Court concluded that leakproof cells did not qualify as spare parts of transistors under the tax schedule.

Consequently, the Court ruled that the leakproof battery cells did not fall under any specific category in the tax schedule, making them subject to multi-point tax under the general taxing provisions of the statute. The tax revision petition was allowed only concerning the turnover related to the sale of leakproof battery cells, which was deemed assessable at multi-point tax. The Court made no order as to costs, partially allowing the petition.