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1987 (8) TMI 422 - HC - VAT and Sales Tax
Issues:
1. Interpretation of the scope of a notification regarding taxation on specific goods. 2. Determination of whether certain items qualify as accessories of electrical equipment for tax purposes. The judgment by the High Court involved two revisions by the Revenue for the assessment years 1969-70 and 1973-74. The dispute centered around whether clamps and channels supplied to the electrical department fell under a specific notification for taxation purposes. The notification in question, serial No. 7-A, covered "Electrical equipment, plants and their accessories required for generation, distribution and transmission of electrical energy." The Revenue argued that clamps and channels, being accessories for distribution and transmission of electrical energy, should be taxed at 7 per cent. On the other hand, the assessee's counsel contended that only accessories of electrical equipment or plant could be taxed at the higher rate, not any other items. To support this argument, reference was made to a decision by the Kerala High Court regarding the interpretation of similar provisions. The Kerala High Court had ruled that certain items, like stay-wires for electric posts, could not be considered accessories of electrical goods. Drawing from this precedent, the High Court judge reasoned that clamps and channels, used for supporting electric wires on poles, could not be classified as accessories of electrical equipment or plant. The judge cited a previous case where concrete poles supplied to the electricity department were also not considered accessories of electrical equipment. Consequently, the High Court upheld the Tribunal's decision that clamps and channels were liable to tax at lower rates of 4 per cent and 3 per cent for the respective assessment years. The judge concluded that the items in question did not meet the criteria to be taxed at the higher rate specified in the notification. As a result, the revisions by the Revenue were dismissed, and no costs were awarded.
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