1982 (4) TMI 276 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of entries 81, 41, and 41-B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.
2. Classification of a belt grinding machine under the relevant entry for taxation purposes.

The judgment of the Court addressed the issue of whether the goods sold by the assessee fell under entry 81, entry 41, or entry 41-B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 for the assessment year 1974-75. Entry 81 pertained to machinery worked by electricity and other fuels, while entry 41 covered electrical goods and machinery. Entry 41-B, introduced later, specified certain electrical appliances and their parts. The Tribunal initially classified the belt grinding machine as an electrical grinder falling under entry 41-B post-March 1975. However, the Court found that the machinery was not an electrical grinder as described under entry 41-B, but rather machinery worked by electricity, falling under entry 81. The Court emphasized the distinction between electrical machinery and machinery worked by electricity, as highlighted in previous case law. It was concluded that the belt grinding machine should be taxed under entry 81 as "machinery worked by electricity."

The Court analyzed the nature of the belt grinding machine, noting that its primary function was abrasive action powered by a 2 h.p. electric motor. Despite being operated by electricity, the machine did not qualify as electrical machinery under entry 41 or an electrical grinder under entry 41-B. The Court referenced a prior decision emphasizing that electrical goods or machinery under entry 41 must inherently require electricity for operation and must align with the definition of electrical goods. Given the specific description of machinery worked by electricity under entry 81 and the nature of the belt grinding machine, the Court determined that the appropriate classification for taxation purposes was under entry 81.

In conclusion, the Court modified the Tribunal's order, directing that the turnover related to the belt grinding machine be taxed at a single point under entry 81 at a rate of 5 percent. The assessee was granted costs, including counsel fees. The judgment clarified the distinction between machinery worked by electricity and electrical machinery, providing a clear interpretation of the relevant entries for taxation purposes under the Tamil Nadu General Sales Tax Act, 1959.