1990 (6) TMI 204 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of entry 145 of the First Schedule to the Kerala General Sales Tax Act, 1963 regarding the classification of slotted angles and panels as "furniture."

Detailed Analysis:

1. The revision-petitioner, a manufacturing company, contested the Revenue's assessment of the turnover of slotted angles and panels under entry 145 of the First Schedule to the Kerala General Sales Tax Act. The Sales Tax Appellate Tribunal considered these items as "furniture" under the said entry. The petitioner argued that the items, though used for various purposes like making racks and ladders, do not qualify as furniture within the Act's definition.

2. The First Schedule of the Act includes entries related to furniture, such as upholstered furniture, sofa sets, and safes made of iron or steel. The court emphasized that the items under consideration are not commonly known or understood as furniture made of iron or steel. Even though they can be used to make furniture like racks or ladders, this does not automatically classify them as furniture components.

3. The court highlighted the amendment to entry 145 by the Kerala Finance Act, 1984, which expanded the scope to include "furniture or parts thereof made of iron or steel." Before the amendment, the entry did not encompass separately sold components. The court distinguished previous decisions involving items used and accepted as furniture, unlike the components in this case.

4. Relying on precedents from other jurisdictions, the court clarified that the classification of items as furniture depends on their actual use and acceptance as such. In this case, the slotted angles and panels were not considered furniture components before the amendment to entry 145. The court directed the assessing authority to amend the assessment in line with their judgment.

5. Ultimately, the court held that the Sales Tax Appellate Tribunal erred in categorizing the angles and panels under entry 145 of the Act. Instead, these items should be classified under a different entry for "iron and steel articles not mentioned elsewhere in the First Schedule or the Second Schedule," specifically before the amendment by the Kerala Finance Act, 1984.

6. The court allowed the revision, setting aside the Tribunal's decision and instructing the assessing authority to adjust the assessment accordingly. The legal interpretation provided by the court applied only to the period preceding the relevant entry's amendment by the Kerala Finance Act, 1984.