1999 (4) TMI 590 - HC - VAT and Sales Tax

Summary

Issues:
Levy of sales tax on fully automatic washing machines under the Andhra Pradesh General Sales Tax Act, 1957.

Analysis:
The judgment pertains to a batch of tax revision cases concerning the classification of fully automatic washing machines for the levy of sales tax under the Andhra Pradesh General Sales Tax Act, 1957. The dispute revolves around whether these machines should be classified as electronic goods for eligibility for a concessional rate of tax. The assessees argued that since fully automatic washing machines operate using advanced computer technology, they should be considered electronic goods and taxed at a lower rate. They relied on a Government Memo and previous court decisions to support their stance.

The fully automatic washing machines in question work on Fuzzy Logic Computers Programme and are microcomputer controlled, selecting appropriate washing methods based on weight and fabric type. The assessees contended that any equipment operating on electronic principles should be classified as electronic goods, hence qualifying for a lower tax rate. They emphasized that the microprocessor technology controlling these machines falls under electronic principles.

On the other hand, the Revenue argued that the presence of a microprocessor in the control panel does not automatically categorize the washing machine as an electronic device. They pointed out that washing machines are specifically mentioned in the tax schedule and do not operate primarily on electronic principles. The Revenue highlighted that while the control panel may involve electronic components, the machine's fundamental operation is mechanical, based on centrifugal force.

The Court examined the arguments presented by both parties and analyzed the nature of fully automatic washing machines. It concluded that despite the sophisticated control system involving microprocessors, these machines fundamentally operate on centrifugal force, making them electro-mechanical rather than purely electronic. The Court upheld the view of the tax assessing authorities and the Sales Tax Appellate Tribunal, dismissing the tax revision cases based on the classification of fully automatic washing machines as electronic goods for tax purposes.

In summary, the judgment clarifies the classification of fully automatic washing machines under the Andhra Pradesh General Sales Tax Act, emphasizing the distinction between electronic and electro-mechanical operations to determine the applicable tax rate.