2002 (12) TMI 577 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Classification of photocopiers as electronic goods or duplicating machines under the U.P. Trade Tax Act and Central Sales Tax Act.
2. Validity of the directive and circular issued by the respondents.
3. Applicability of alternative remedy in the context of the writ petition.

Detailed Analysis:

1. Classification of Photocopiers:
The primary issue in this case revolves around whether the petitioner's photocopiers should be classified as electronic goods or duplicating machines for tax purposes under the U.P. Trade Tax Act and the Central Sales Tax Act. The petitioner argued that their photocopiers are advanced electronic devices controlled by microprocessors and microchips, akin to other electronic goods such as transistors, televisions, and computers. The petitioner cited technical details and operational mechanisms to support this classification, emphasizing that the entire functioning of the photocopier is automatic and controlled electronically. The respondents, however, classified the photocopiers as duplicating machines based on a directive from the Principal Secretary, Institutional Finance, U.P., and subsequent circulars, which relied on previous judicial decisions like Everest Copiers v. State of Tamil Nadu and Bhuji Products v. State of Gujarat.

2. Validity of the Directive and Circular:
The petitioner challenged the directive dated March 18, 2002, and the circular dated March 21, 2002, arguing that these were based on a misinterpretation of judicial precedents and did not consider the specific nature and technological advancements of modern photocopiers. The court noted that the respondents did not specifically deny the technical details provided by the petitioner, which supported the classification of photocopiers as electronic goods. The court also referenced the Supreme Court decision in BPL Ltd. v. State of Andhra Pradesh, which held that fully automated devices controlled by microprocessors should be classified as electronic goods. The court concluded that the directive and circular were invalid as they failed to recognize the distinct nature of modern photocopiers and their classification under the relevant tax laws.

3. Applicability of Alternative Remedy:
The respondents contended that the petitioner had an alternative remedy and should not have filed a writ petition. However, the court held that alternative remedy is not an absolute bar to a writ petition, especially when the facts are undisputed and the issue can be resolved through authoritative adjudication. The court cited previous judgments, including Ram and Shyam Company v. State of Haryana, to support this view. The court also noted that the controversy was likely to be of a recurring nature and involved questions of law rather than disputed facts, making it appropriate for the High Court to decide the matter.

Conclusion:
The court allowed the writ petition, quashing the impugned directive and circular, and directed the respondents to treat the petitioner's photocopiers as electronic goods under the Central Sales Tax Act and U.P. Trade Tax Act. The court also ordered the refund of any amount deposited by the petitioner under the interim order within a month. The judgment emphasized the importance of recognizing technological advancements in the classification of goods for tax purposes and upheld the principle that fully automated devices controlled by microprocessors should be classified as electronic goods.