1976 (3) TMI 224 - HC - VAT and Sales Tax

Summary

Issues:
Sales tax assessment for the assessment years 1966-67 and 1967-68 - Classification of drawing office equipment for tax purposes under the Tamil Nadu General Sales Tax Act.

Analysis:
The judgment delivered by the Madras High Court involved two tax revision cases concerning the sales tax assessments for the years 1966-67 and 1967-68. The assessing authority initially taxed the sales of drawing office equipment at 61%, later realizing it should be classified as a duplicating machine and taxed at 11%. The equipment's nature was described in detail by the manager of the assessee-company, emphasizing its operation with electricity and specific usage limitations for obtaining facsimiles. The assessee argued that the equipment should be classified under entry 41 of Schedule I of the Tamil Nadu General Sales Tax Act, covering all kinds of electrical goods. However, the assessing authority considered it to fall under entry 1, which pertains to duplicating machines and related parts.

For the assessment year 1966-67, the assessing authority, the Appellate Assistant Commissioner, and the Tribunal upheld the classification of the equipment as a duplicating machine under entry 1, subjecting it to tax. In contrast, for the assessment year 1967-68, the Tribunal reached a different conclusion. The revenue contended that the equipment was a duplicating machine intended solely for duplicating purposes, while the assessee argued it was a printing and developing machine falling under entry 41 due to its operation with electricity.

The Court rejected the assessee's argument, emphasizing that the equipment's primary purpose, as evident from the company's pamphlet, was duplicating. Despite being operated by electricity, the equipment did not qualify as electrical goods under entry 41. The Court held that when faced with general and specific entries, the specific entry must prevail for tax purposes. Consequently, the assessing authority's decision to tax the equipment as a duplicating machine under entry 1 was deemed correct.

As a result, Tax Revision Case No. 310 of 1971 was allowed, while Tax Revision Case No. 316 of 1971 was dismissed. No costs were awarded in either revision.