2010 (3) TMI 1007 - HC - VAT and Sales Tax

Whether on the facts and circumstances of the case and on true and correct interpretation of entry C-II-93(a) and C-II-97(b) was the Tribunal justified in law in holding that Onida electronic washing machines effected under invoice No. 2709 dated February 6 1992 are covered by scope of entry C-II-97(b) and not that by C-II-73(b)? Whether the Tribunal was justified in law in holding that entry C-II-97(b) is a special entry for washing machine and entry C-II-73(a) is a specifically mentioned in the Schedule entry C-II-73(a) Held that - In the present case entry 97(b) Part II of Schedule C specifically states about the electronic appliances. Thus the Tribunal has rightly held that the electronic washing machine falls under entry 97(b) Part II of Schedule C. Therefore both the questions referred above are answered against the applicant/Revenue and in favour of the respondent/assessee.

Summary

Issues:
Interpretation of entry C-II-97(b) and C-II-73(a) under the Bombay Sales Tax Act, 1959.

Analysis:

Issue 1:
The primary issue in this case revolves around the interpretation of entry C-II-97(b) and C-II-73(a) of Schedule C under the Bombay Sales Tax Act, 1959. The dispute arose from the classification of an electronic washing machine for sales tax purposes. The Commissioner of Sales Tax initially classified the washing machine under entry 73(a), attracting a 15% sales tax rate. However, the Tribunal overturned this decision, classifying the washing machine under entry 97(b) and subjecting it to a 4% tax rate.

Issue 2:
The crux of the matter lies in determining whether the electronic washing machine falls under the scope of entry C-II-97(b) or C-II-73(a) of Schedule C. The applicant argued that the specific entry should override the general entry, citing a previous judgment by the apex court in a similar case. The applicant contended that the language of entry 97(b) indicates it is a residuary entry, allowing classification under other entries as well. On the other hand, the respondent argued that the term "appliance" in entry 97(b) includes washing machines, supported by common trade parlance and previous court judgments.

Issue 3:
The distinction between "electric" and "electronic" appliances played a crucial role in the decision-making process. The court clarified that "electric" relates to the general concept of electricity, while "electronic" refers to devices powered by electricity. Drawing from a previous judgment involving electronic washing machines, the court established that such devices are considered electronic goods, falling under entry 97(b) of Schedule C.

Conclusion:
After a thorough analysis of the legal provisions and precedents, the court upheld the Tribunal's decision, ruling in favor of the respondent. The court agreed with the Tribunal's classification of the electronic washing machine under entry C-II-97(b), thereby subjecting it to a lower tax rate. The judgment emphasized the importance of specific entries overriding general ones and clarified the distinction between electric and electronic appliances in the context of sales tax classification.