2010 (8) TMI 818 - HC - VAT and Sales Tax

Whether the Desk Top Projector dealt with by the respondent-assessee will fall under Entry 33 of Part D of the First Schedule or Entry 44 of Part B of the First Schedule? Held that - going by the literature of the manufacturer and the usage of the product viz. Desk Top Projector the common usage of which is in conferences and institutions while holding meetings and training programs as an in-house practice it can be safely held that there is absolutely no scope to hold Desk Top Projector is a cinematographic equipment or it is used in movie theatres for exhibiting regular cinemas in order to hold that the said projector would fall under Entry 33 of Part D of the First Schedule. We for all the above stated reasons do not find any scope to interfere with the order of the Tribunal. Revision failed.

Summary

Issues:
1. Interpretation of whether Desk Top Projector falls under Entry 33 of Part D or Entry 44 of Part B of the First Schedule.

Analysis:
The judgment by the Madras High Court involved a challenge to the order of the Sales Tax Appellate Tribunal regarding the classification of a Desk Top Projector for the assessment year 1995-96. The primary issue was determining whether the Desk Top Projector would be categorized under Entry 33 of Part D or Entry 44 of Part B of the First Schedule. The Desk Top Projector in question was an electronically operated equipment used for boardroom conferences, educational institutions, and training programs, not for regular cinema theaters. The literature described it as a multimedia equipment ideal for displaying movies and videos in various settings.

The Court analyzed the specific language of Entry 33 and Entry 44 to differentiate between cinematographic equipments and electronic goods. Entry 33 included projectors as part of cinematographic equipments, while Entry 44 listed projectors separately under electronic goods. The judgment emphasized that the Desk Top Projector, not being intrinsically connected with cinematography, would fall under Entry 44 rather than Entry 33. The Court highlighted the distinct language used in the entries to support this interpretation.

The Assessing Authority initially classified the Desk Top Projector under Entry 33, but the Appellate Assistant Commissioner upheld this decision without detailed reasoning. However, the Sales Tax Appellate Tribunal thoroughly examined the product, including visual inspection and relevant clarifications, before concluding that the Desk Top Projector should be classified under Entry 44. The Court agreed with the Tribunal's analysis, finding it based on compelling evidence and reasoning.

In a comparative reference to another case, the Court clarified the application of principles in interpreting tax classifications based on popular usage and manufacturer's descriptions. Applying these principles to the Desk Top Projector case, the Court affirmed that its common usage in conferences and educational settings aligned with Entry 44 for electronic goods, rather than Entry 33 for cinematographic equipments. Consequently, the Court dismissed the tax case revision, upholding the classification of the Desk Top Projector under Entry 44 of Part B of the First Schedule.