1981 (2) TMI 221 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Taxability of "glass marbles" under the Karnataka Sales Tax Act, 1957.
2. Applicability of the "doctrine of common parlance" in determining the classification of "glass marbles."
3. Jurisdiction and procedural propriety of notices issued by the Deputy Commissioner.

Detailed Analysis:

1. Taxability of "glass marbles" under the Karnataka Sales Tax Act, 1957:
The primary legal question was whether "glass marbles" should be taxed under entry 109 of the Second Schedule to the Act as "glassware" at 6%, or as unspecified goods at 3% under section 5(1) of the Act. The petitioner, a registered dealer, argued that glass marbles should be treated as playthings and not as glassware. The assessing authority initially taxed glass marbles at 3% but later revised it to 6%, treating them as glassware. The petitioner challenged this reclassification.

2. Applicability of the "doctrine of common parlance" in determining the classification of "glass marbles":
The petitioner contended that in common parlance, glass marbles are considered playthings, not glassware. The petitioner supported this argument with references to publications and classifications in directories and tariffs that listed marbles under toys and playthings. The assessing authority rejected this argument, asserting that the doctrine of common parlance is inapplicable when the facts are clear. However, the court found that in the absence of a specific definition of "glassware" in the Act, the principle of common parlance should apply. The court cited precedent cases where the common parlance test was used to determine the classification of goods for tax purposes.

3. Jurisdiction and procedural propriety of notices issued by the Deputy Commissioner:
The petitioner also challenged the notices issued by the Deputy Commissioner to revise the assessment orders for the years 1971-72 and 1972-73. The court held that the petitioner should have responded to the notices and presented evidence to the Deputy Commissioner. The court found no jurisdictional error in the issuance of the notices and dismissed the writ petitions challenging them.

Judgment:

In W.P. No. 7300 of 1975:
(i) Rule made absolute.
(ii) The impugned order of the Commercial Tax Officer, dated 29th November, 1975, was quashed insofar as it related to the turnover of glass marbles.
(iii) The assessing authority was directed to make a fresh assessment on the turnover of glass marbles, considering the doctrine of common parlance.
(iv) The petitioner was allowed to adduce further evidence if desired.

In W.P. Nos. 7290 and 7291 of 1975:
(i) Rule discharged.
(ii) Petitions dismissed.
(iii) The petitioner was granted the liberty to show cause against the notices, and the Deputy Commissioner was instructed to pass orders considering the principles of common parlance.

The court emphasized that the principle of common parlance should be applied to determine whether glass marbles are considered glassware or playthings in the market. The assessing authority was instructed to reassess the classification of glass marbles accordingly.