1998 (3) TMI 649 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Concessional rate of sales tax for computer stationery.
2. Classification of computer stationery under electronic goods.
3. Interpretation of Government Orders (G.O.s) and memos.
4. Applicability of concessional rate post-rescission of G.O. Ms. No. 520.
5. Impact of non-reissuance of memo clarifying "electronic goods."

Issue-Wise Detailed Analysis:

1. Concessional Rate of Sales Tax for Computer Stationery:
The petitioner, an association of manufacturers of computer stationery, claimed that computer stationery should be granted a concessional rate of sales tax. They argued that computer stationery had been treated as part of electronic goods and subjected to a concessional tax rate of 2% up to September 6, 1993, and 4% thereafter.

2. Classification of Computer Stationery Under Electronic Goods:
The primary contention was whether computer stationery could be classified under "electronic goods" as per the relevant Government Orders. The petitioner argued that computer stationery, although generally categorized as paper, was given special treatment as part of electronic goods to encourage the industry. The court examined whether computer stationery could be considered "material and parts and accessories" of electronic equipment but concluded that it could not, as it is a consumable essential for operation but not an integral part of the equipment.

3. Interpretation of Government Orders (G.O.s) and Memos:
The petitioner referred to various G.O.s, including G.O. Ms. No. 520 and G.O. Ms. No. 864, which provided a concessional rate for electronic goods. The court noted that the definition of electronic goods in these G.O.s included "electronic systems, instruments, appliances, apparatus, equipment operating on electronic principles and all types of electronic components, parts, and materials." The classification by the Electronics Commission, adopted by a memo, included computer stationery under miscellaneous electronic items. However, the court found that the classification was more appropriate for manufacturers rather than for defining the scope of "electronic goods" in common parlance.

4. Applicability of Concessional Rate Post-Rescission of G.O. Ms. No. 520:
G.O. Ms. No. 520 was rescinded by G.O. Ms. No. 864, which increased the tax rate from 2% to 4%. The petitioner argued that since the definition of electronic goods was repeated in G.O. Ms. No. 864, the concessional rate should still apply to computer stationery. The court observed that the memo clarifying the scope of electronic goods was not reissued with G.O. Ms. No. 864, leading to ambiguity.

5. Impact of Non-Reissuance of Memo Clarifying "Electronic Goods":
The court noted that the omission to reissue the memo clarifying "electronic goods" with reference to G.O. Ms. No. 864 created uncertainty. The court directed the government to decide and notify whether the omission was intentional or accidental within three months. This decision would impact the applicability of the concessional rate to computer stationery under the Andhra Pradesh General Sales Tax Act, while noting that the concession still applied under the Central Sales Tax Act.

Conclusion:
The writ petition was disposed of with a direction to the government to clarify the issue of whether the omission to reissue the memo was intentional or accidental. The petitioner was permitted to move the Appellate Deputy Commissioner to restore the appeals on file and keep them pending until the government's clarification. Pending the disposal of the appeals, status quo was to be maintained.