1980 (8) TMI 183 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of electronic goods as electrical goods under the sales tax law.

Analysis:
The judgment pertains to the assessment of sales tax on electronic goods manufactured by a government undertaking for the years 1971-72, 1972-73, and 1973-74. The Commercial Tax Officer taxed the turnover at varying rates, leading to appeals and ultimately a common order by the Sales Tax Appellate Tribunal. The main contention was whether the electronic goods manufactured should be classified as electrical goods under item 37 of the sales tax schedule. The Tribunal, after considering various aspects of electricity and electronics, concluded that all electronic devices marketed by the petitioner are akin to electrical appliances. However, the High Court disagreed with this approach, emphasizing that the classification should be based on how the goods are perceived in common parlance rather than scientific categorization.

The High Court cited precedents to support its stance, highlighting that the criterion for classification as electrical goods is not merely based on the need for electricity to use the goods but on how they are commonly understood in trade. The Court referred to cases where items like wooden gittis and welding electrodes were not considered electrical goods despite requiring electricity for use. The Tribunal's failure to assess each commodity based on its common understanding led the High Court to set aside the Tribunal's order and remand the cases to the Commercial Tax Officer for a proper determination.

The Court also addressed the possibility of some goods falling under specific items like wireless reception instruments or typewriters rather than being classified as general electrical goods. Therefore, the judgment directed a detailed examination by the tax authorities to ascertain the correct classification of each item manufactured and marketed by the petitioner. Ultimately, the Court allowed the revision petitions, setting aside the Tribunal's order and instructing a fresh assessment based on the observations provided in the judgment. No costs were awarded in the matter.