2003 (5) TMI 497 - HC - VAT and Sales Tax

Summary

Issues: Taxability of automatic voltage stabilizers as electronic goods or electrical goods

Analysis:
The High Court of Allahabad heard six revisions filed by the Commissioner of Trade Tax regarding the taxability of automatic voltage stabilizers. The assessees argued that voltage stabilizers should be taxed as electronic goods per specific notifications, while the department contended they should be taxed as electrical goods.

The dealers involved in the case were engaged in the manufacture and sale of voltage stabilizers. While some assessing officers accepted the claim that voltage stabilizers should be taxed as electronic goods, these decisions were later set aside in revisions. The Tribunal ultimately held that voltage stabilizers are electronic goods.

The relevant notifications, specifically entry 74 of Notification No. 1223 dated March 31, 1992, and subsequent amendments, were crucial in determining the tax rate applicable to voltage stabilizers. The court examined past judgments and circulars to establish whether voltage stabilizers should be classified as electronic or electrical goods.

The court distinguished previous cases where voltage stabilizers were considered accessories to other products, emphasizing that the current issue was the tax classification of voltage stabilizers. The circular dated June 6, 1992, listing voltage stabilizers as electronic goods for tiny units, played a significant role in the argument presented by the dealers.

Citing a Supreme Court decision and the binding nature of the circular issued by the Commissioner, the court upheld the Tribunal's decision that voltage stabilizers should be treated as electronic goods. The lack of discussion in the Commissioner's order regarding the classification further supported the court's ruling in favor of considering voltage stabilizers as electronic goods.

Based on the evidence presented and the interpretation of relevant notifications and circulars, the court dismissed all revisions, affirming the classification of voltage stabilizers as electronic goods for tax purposes.