1981 (2) TMI 222 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to the levying of sales tax at a higher rate on super-enamelled copper wire.
2. Interpretation of item No. (17) in Schedule A of the Punjab General Sales Tax Act, 1948 regarding the taxation rate for electrical goods.

Detailed Analysis:
1. The petitioner, a registered firm dealing in electrical goods, challenged the reassessment levying a higher sales tax rate of 10% on super-enamelled copper wire instead of 6%. The reassessment was based on a memorandum from the Excise and Taxation Commissioner, Punjab, stating the correct tax rate. The petitioner contended that the wire should be taxed at 6% as it falls under an exception in the Act.

2. The main issue was whether super-enamelled copper wire qualified as an accessory under item No. (17) in Schedule A of the Punjab General Sales Tax Act, 1948. The Court examined expert testimony from Dr. B. Thapar, who confirmed that the wire is used in winding motors, transformers, and other electrical equipment, making it an accessory to electric plant and equipment. The State argued that the wire should be taxed at 10%, citing a previous case, but the Court disagreed, ruling that the wire falls under the exception of item (17) and should be taxed at 6%.

In conclusion, the Court allowed the writ petition, quashing the reassessment order and determining that super-enamelled copper wire qualifies as an accessory under the Act, thus subject to a lower tax rate of 6%.