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1995 (2) TMI 403 - HC - VAT and Sales Tax
Issues:
Interpretation of entries 38(iv) and 83 of the Andhra Pradesh General Sales Tax Act for taxation of biscuit baking oven. Analysis: The High Court of Andhra Pradesh considered the issue of whether a biscuit baking oven should be taxed under entry 38(iv) or entry 83 of the First Schedule to the Andhra Pradesh General Sales Tax Act. The assessee, a dealer in biscuit baking ovens, argued that the oven should be taxed under entry 83 as it is an accessory to the machinery for manufacturing biscuits. On the other hand, the Revenue contended that the oven should be taxed under entry 38(iv) as it falls under electrical goods. The Court analyzed both entries to determine the appropriate taxability. Entry 38(iv) of the Act includes electrical goods like grinders, mixers, and ovens, which are independent items and not part of other machinery or accessories. In contrast, entry 83 encompasses machinery propelled by electricity, including spare parts and accessories, not specifically mentioned elsewhere. The Court noted that an item in entry 38(iv) should be independent, while an item in entry 83 can be part of or accessory to machinery. The nature and use of the goods determine their taxability under the relevant entry, following the common usage test. The Court referred to various judgments, including State of Andhra Pradesh v. Indian Detonators Ltd., where the nature of goods was crucial in determining taxability. Additionally, the Court cited State of A.P. v. Mayur Crystal Palace, emphasizing the importance of commercial parlance in classification. Furthermore, Industrial Machinery Manufacturers Pvt. Ltd. v. State of Gujarat was referenced to highlight the significance of the purpose of the goods in taxability. In the present case, the Court concluded that the turnover related to electrical ovens used as accessories to biscuit baking machinery should be taxed under entry 83, not entry 38(iv). The judgment of the Tribunal was upheld based on different reasoning, dismissing the tax revision cases with no order as to costs.
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