1994 (11) TMI 409 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of PVC granules and insulated copper wire under the Andhra Pradesh General Sales Tax Act, 1957.
2. Interpretation of entry 88 and entry 38 of the First Schedule.
3. Determination of whether PVC granules and insulated copper wire fall under specific entries or are taxable under section 5(1) of the Act.

The High Court of Andhra Pradesh heard revisions by the State regarding the classification of PVC granules and insulated copper wire under the Andhra Pradesh General Sales Tax Act, 1957. The assessing authority initially treated both items as unclassified and taxed them under section 5(1) of the Act. The Deputy Commissioner later classified PVC granules under entry 88 and insulated wire under entry 38 of the First Schedule. However, the Sales Tax Appellate Tribunal reversed this decision, taxing both items under section 5(1) of the Act for the assessment years 1974-75, 1975-76, and 1977-78. The Court consolidated the revisions due to the common question of fact and law.

Regarding PVC granules, the Court analyzed entry 88, which pertains to "Articles of PVC materials." It compared this entry with others like entries 43, 54, and 89, noting that where the prime form of material was intended to be taxed, the Legislature explicitly included it in the entry. As PVC granules are the prime form of PVC, they do not fall within the scope of entry 88. Consequently, the Court confirmed that PVC granules are taxable under section 5(1) of the Act.

Concerning insulated copper wire, the Court examined entry 38, which covers "All kinds of electrical goods." Referring to a previous case, it highlighted that the term "electrical goods" should be understood in common parlance, and the inclusion of insulated wire under this entry depends on whether it qualifies as an electrical good. The Court observed discrepancies in the information provided by the assessee regarding the type of wire supplied. Due to the lack of a definitive finding by the Tribunal on whether the wire was insulated or bare, the Court set aside the Tribunal's decision and remitted the matter for further determination.

In conclusion, the Court upheld the Tribunal's decision on PVC granules, confirming their taxation under section 5(1) of the Act. For insulated copper wire, the Court directed a reassessment by the Tribunal to ascertain the nature of the supplied wire before making a classification decision. The revision cases were disposed of without costs.