2005 (3) TMI 726 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of entry 145 of the Kerala General Sales Tax Act, 1963 for the years 1983-84 and 1984-85.
2. Classification of slotted angles, panels, etc., as furniture or iron and steel items under the relevant entries.
3. Applicability of the Explanation introduced in entry 145 regarding slotted angles forming furniture when assembled.

Issue 1: Interpretation of entry 145 for the years 1983-84 and 1984-85
The High Court analyzed the application of entry 145 of the Kerala General Sales Tax Act, 1963 for the years 1983-84 and 1984-85. For the year 1983-84, the Court referred to the decision in Godrej & Boyce Mfg. Co's case, where it was held that items under entry 145 are end-products used as articles of furniture. However, for the year 1984-85, the Court interpreted the amended entry 145, which included "furniture or parts thereof made of iron or steel." The Court examined the definitions of "safe," "almirah," and "furniture" to conclude that slotted angles and panels could be considered furniture under entry 145.

Issue 2: Classification of slotted angles, panels, etc., under entry 145
The Court addressed the classification of slotted angles, panels, etc., as either furniture or iron and steel items under entry 145. The assessing authority had considered these items as parts of safes, almirahs, and furniture, taxable at 12 per cent. The Appellate Assistant Commissioner upheld this view, but the Tribunal disagreed, stating that these items cannot be termed as furniture. The Court, however, held that slotted angles and panels, even in unassembled form, fall within the expression "furniture" under entry 145 due to their common usage in making racks akin to safes and almirahs.

Issue 3: Applicability of the Explanation in entry 145
The Court discussed the Explanation introduced in entry 145 regarding slotted angles being deemed as furniture when assembled. It disagreed with the reasoning of the Madras High Court in a similar case and emphasized that slotted angles would fall under entry 145 even without the Explanation. The Court held that slotted angles and panels are indeed furniture and upheld the levy of tax at 12 per cent under entry 145 of the First Schedule.

In conclusion, the High Court partially allowed the petition, setting aside the Tribunal's order and upholding the assessing authority's decision to levy tax at 12 per cent on the sales turnover of slotted angles and panels under entry 145 of the First Schedule.