2014 (8) TMI 925 - HC - VAT and Sales Tax

Classification of goods - Whether on the facts and in the circumstances of the case Gujarat Sales Tax Tribunal was right in law in holding that sale of Kaam Vertical Industrial process camera complete film size 50 x 60 cm with one lens 150 mm copy board Halogen lamps Suction back vacuum fan manufactured by the opponent would be covered by entry 16(1) of Schedule IIA to the Gujarat Sales Tax Act 1969 (as it stood at the relevant time) for the purpose of levy of tax or its sale is covered by entry 75 of Schedule IIA or alternatively under entry 79 in Schedule IIA - Held that - Tribunal has erred in holding that the goods in question i.e. Industrial Camera will fall in entry no. 16(1)A i.e. machinery. From the impugned order, it appears that the learned Tribunal has held against the revenue by observing that even State has accepted the goods in question is a printing machinery / machinery. It is required to be noted that as such it was an Industrial Camera. - Therefore, as per entry no.75 Photographic and other cameras shall fall within entry no.75. Under the circumstances, merely because the product in question was a machinery, the same cannot be considered in entry no. 16(1) of Schedule IIA as machinery, as such product in question is industrial Camera and as per entry no.75 (Photographic and other Camera) each included in entry no.75. Therefore, we are of the firm opinion that product in question Industrial Camera will fall within entry no.75 and was subjected to sales tax under the said entry no.75. - Decided in favour of Revenue.

Summary

Issues:
Interpretation of entry for levy of tax on the sale of Industrial Cameras under the Gujarat Sales Tax Act, 1969.

Analysis:
The case involved a reference made by the Gujarat Sales Tax Tribunal regarding the classification of Industrial Cameras for tax purposes. The respondent dealer, registered under the Gujarat Sales Tax Act, manufactured Industrial Cameras used by printers as a printing machine. The Commissioner initially classified the cameras under entry no. 75 for tax purposes, while the Tribunal classified them under entry no. 16(1) as machinery/printing machinery. The main issue was whether the Industrial Cameras fell under entry no. 75 for photographic and other cameras or under entry no. 16(1) as machinery.

The Assistant Government Pleader argued that the cameras should be classified under entry no. 75, which specifically mentioned "photographic cameras and cinematography cameras." He contended that the Tribunal erred in not considering the specific nature of entry no. 75 and that the functional character of the cameras aligned with photographic cameras. Additionally, he highlighted that entry no. 16 was a general and residuary entry, supporting the Commissioner's classification under entry no. 75. The Pleader also referenced specific court decisions to strengthen the argument for classification under entry no. 75.

The Tribunal, in an ex-parte hearing due to the absence of the dealer's advocate, disagreed with the Tribunal's classification and held that the Industrial Cameras should be classified under entry no. 75 for photographic and other cameras. They emphasized that the nature of the product as an Industrial Camera did not exclude it from falling under the specific entry no. 75, which covered all types of cameras, including photographic ones. The judgment clarified that even though the product was a type of machinery, it should be taxed under entry no. 75 as a camera, not under the general entry no. 16(1) for machinery.

In conclusion, the High Court ruled in favor of the revenue, holding that the Industrial Cameras should be taxed under entry no. 75 for photographic and other cameras, rejecting the Tribunal's classification under entry no. 16(1) as machinery. The judgment provided a detailed analysis of the specific entry requirements and the functional characteristics of the Industrial Cameras to support the decision.