1979 (7) TMI 214 - HC - VAT and Sales Tax

Summary

Issues:
- Interpretation of sales tax exemption for electrical hearing-aids and accessories
- Determination of whether dry-cells imported for hearing-aids qualify for exemption
- Review of Board of Revenue's decision on taxation of batteries sold as accessories

Analysis:
The case involved an appeal against the Board of Revenue's order concerning the taxation of dry-cells imported as accessories for hearing-aids. The assessing authority initially deemed the batteries taxable as they were not exclusively for hearing-aids. However, the Appellate Assistant Commissioner exempted the turnover related to these batteries. The Board of Revenue, on its own motion, sought to revise this decision, arguing that the batteries could be used for transistors as well, making them taxable. The key issue was whether the batteries qualified as accessories of electrical hearing-aids under item 41 of the exemption list.

The High Court analyzed the purpose of the import and sale of the batteries, emphasizing that they were imported solely as hearing-aid accessories, even though they could be used for transistors in countries where such transistors were available. Referring to a previous judgment, the Court highlighted that accessories essential for the functioning of hearing-aids, like dry-cells, should be exempt from taxation. The Court held that the batteries were rightfully exempted by the Appellate Assistant Commissioner and wrongly taxed by the Board of Revenue. Consequently, the Court allowed the tax case, ruling in favor of the assessee.

In conclusion, the Court's decision clarified that the batteries imported for hearing-aids, even if capable of other uses, were considered accessories of electrical hearing-aids and thus eligible for exemption under the sales tax law. The judgment emphasized the importance of the intended purpose of the goods and affirmed the assessee's entitlement to exemption, overturning the Board of Revenue's decision.