1991 (11) TMI 241 - HC - VAT and Sales Tax

Summary

Issues:
Identification of taxable turnover for barber chairs and determination of applicable tax rate.

Analysis:
The judgment pertains to four tax revision cases where the Revenue is the petitioner, and the same assessee is the respondent for all cases. The cases involve the assessment years 1983-84, 1984-85, 1985-86, and 1986-87, concerning the sale of barber chairs. The assessing authority made best judgment assessments due to the non-inclusion of turnover from barber chairs in the returns. The assessee contended that he was only a manufacturer and that barber chairs were part of a works contract. The primary issue was the taxability and the applicable tax rate for the turnover of barber chairs.

The Appellate Tribunal, based on a government clarification, directed the assessing authority to apply a tax rate of 5% for the sales turnover of barber chairs instead of the 12% rate applied earlier. However, the High Court disagreed with this decision. The Court analyzed the definition of "furniture" and differentiated between a dental chair and a barber chair. It cited previous case law to establish that a barber chair falls under the category of "furniture" and cannot be equated to a dental chair, which is a specialized tool. Therefore, the government's clarification regarding the tax rate for dental chairs was deemed inapplicable to barber chairs.

Consequently, the High Court allowed the tax revision cases, vacated the order of the Appellate Tribunal, and upheld the orders of the assessing authority and the Appellate Assistant Commissioner. The Court ruled that the barber chair should be considered as "furniture" for tax purposes, and the tax rate of 12% applied by the assessing authority was deemed correct.