2011 (3) TMI 1515 - HC - VAT and Sales Tax

Whether the disc sold by the assessee would qualify as electronic item for the purpose of attracting the notifications granting concessional levy? Held that - On going through the various entries in the Act, we are satisfied that the disc sold by the assessee does not fit either under entry 9 as contended by the Revenue or under entry 41C as had been contended by the appellant. In the circumstances, when a particular item in question is enumerated, viz., the device does not fit in with the entries of the First Schedule, the entry under which it can be taxed is under section 3(1) of the Act to attract multi-point levy, which was available at the relevant point of time, i.e., during the assessment years in question. Going by the said aspect, we have no hesitation in setting aside the order of the revisional authority and at the same time, we hold that the item in question is assessable only under multi-point levy and not under entry 9 of the First Schedule or under entry 41C of the Tamil Nadu General Sales Tax Act

Summary

Issues:
Assessment of tax on gramophone records under specific entries of the Tamil Nadu General Sales Tax Act and Central Sales Tax Act.

Detailed Analysis:
The judgment pertains to appeals against the orders of the Joint Commissioner under suo motu revision powers, concerning the tax levied on L.P. records. The assessee, a dealer in gramophone records and cassettes, claimed concessional tax rates under entry 41C of the First Schedule to the Tamil Nadu General Sales Tax Act, supported by a government notification. The assessing officer initially accepted this claim, but later revised the assessment, leading to appeals and a show-cause notice by the Joint Commissioner.

The Appellate Assistant Commissioner upheld the assessee's case, emphasizing the electronic nature of the products. However, the Joint Commissioner, considering L.P. records as non-electronic items, restored the assessing officer's order, prompting the present appeals by the assessee. The counsel for the appellant argued based on relevant entries, notifications, and the electronic character of the products, supported by legal precedents and clarifications issued by the Commissioner of Commercial Taxes.

The court analyzed the entries under the Act, notifications granting concessional levy on electronic goods, and the distinction between gramophone records and electronic items. It concluded that the discs sold by the assessee did not qualify as electronic items under entry 41C, nor did they fit under entry 9. Therefore, the court set aside the revisional authority's order, determining that the item in question was assessable only under multi-point levy, not under specific entries of the Sales Tax Act.

In conclusion, the court disposed of the appeals related to the Tamil Nadu General Sales Tax Act and the Central Sales Tax Act, affirming the assessment under the multi-point levy system. The judgment provides a detailed analysis of the legal and factual aspects concerning the classification and taxation of gramophone records, emphasizing the interpretation of relevant statutory provisions and notifications.