1995 (2) TMI 415 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether computers qualify as "scientific and laboratory equipment" under the notification dated February 21, 1972, issued under section 8(5) of the Central Sales Tax Act, 1956.
2. Whether the Tribunal was justified in not considering the expert opinion tendered before it after having taken the same on record without any objection from the State.

Issue-Wise Detailed Analysis:

Issue 1: Classification of Computers as Scientific and Laboratory Equipment
The primary question addressed was whether computers sold by the assessee could be classified as "scientific and laboratory equipment" under the notification dated February 21, 1972, issued under section 8(5) of the Central Sales Tax Act, 1956. The Tribunal had previously ruled that computers did not fall under this category, referencing entries 33 and 97(a) of Part II of Schedule C to the Bombay Sales Tax Act, 1959.

The High Court examined the language of the notification and found it clear and unambiguous, stating that the benefit of reduced tax rates was applicable to all "scientific equipment and instruments" without restriction to those listed under entry 33. The Court emphasized that the notification's language did not warrant the Tribunal's restrictive interpretation.

The Court further elaborated on the definition of "scientific equipment and instruments," citing Corpus Juris Secundum, which describes such instruments as those designed for use and principally employed in any branch of science for observation, experiment, instruction, or professional practice. The Court concluded that computers fit this description, being extensively used in educational institutions, hospitals, and laboratories for scientific purposes.

Thus, the Court held that the Tribunal was not justified in excluding computers from the category of "scientific and laboratory equipment" under the notification, and accordingly answered the first question in the negative, in favor of the assessee.

Issue 2: Consideration of Expert Opinion
The second issue concerned whether the Tribunal was justified in not considering the expert opinion that had been tendered and accepted without objection from the State. Given the resolution of the first issue in favor of the assessee, the Court deemed this question academic and chose not to address it substantively.

Additional Observations:
The Court noted that the Tribunal had mentioned potential deficiencies in the declarations issued by purchasers under the notification. The Court suggested that if these deficiencies were material or substantial, the Tribunal could allow the assessee an opportunity to rectify them while implementing the Court's opinion.

Conclusion:
The High Court answered the reference in favor of the assessee, concluding that computers qualify as "scientific and laboratory equipment" under the relevant notification. The second issue was rendered academic and thus not addressed. No order as to costs was made.