2007 (8) TMI 718 - HC - VAT and Sales Tax

Classification of goods - hether Ink Cartridges and Toner Cartridges used in Inkjet printers and Laserjet printers are covered under Entry No. 41 A (xxv) of the Third Schedule appended to the Delhi Value Added Tax Act, 2004? - Held that - There is no dispute that toners and cartridges are used in the above kinds of printers. Therefore, toners and cartridges are part and accessories of goods mentioned in HSN 84.71 and therefore, covered by Entry 41A (xxv) of the DVAT Act, 2004 - appeal dismissed.

Summary

Issues:
Interpretation of Entry No. 41A(xxv) of the Third Schedule of the Delhi Value Added Tax Act, 2004 regarding the taxability of 'Ink Cartridges' and 'Toner Cartridges' used in printers.

Analysis:
The judgment revolves around the interpretation of Entry No. 41A(xxv) of the Third Schedule of the DVAT Act, 2004, concerning the taxability of 'Ink Cartridges' and 'Toner Cartridges' used in Inkjet and Laserjet printers. The key issue is whether these cartridges fall under the said entry, subjecting them to either 4% or 12-1/2% tax under the DVAT Act.

The court examined the relevant entries in the Third Schedule, specifically Entry No. 41A(xxv) and Entry 53. It was noted that while toner and cartridges are excluded from Entry 53, the question remained whether they could be classified under Entry 41A(xxv). The analysis involved a reference to the Harmonized System of Nomenclature (HSN) codes 84.69, 84.70, and 84.71, which encompass various types of printers like Laserjet and inkjet printers.

The court concluded that since toners and cartridges are essential parts and accessories used in printers falling under HSN 84.71, they are covered by Entry 41A(xxv) of the DVAT Act. This decision was supported by the fact that these items are integral to the functioning of the specified printers, aligning with the legislative intent behind the tax provisions.

Moreover, the court addressed the arguments raised by the Revenue, referencing judgments from the Supreme Court. It was clarified that these judgments were not directly applicable to the DVAT Act and did not impact the current case's interpretation of the relevant entry. Consequently, the court upheld the Tribunal's decision, emphasizing that no substantial legal questions arose from the appeals.

In conclusion, the court dismissed the appeals, affirming the Tribunal's ruling on the taxability of 'Ink Cartridges' and 'Toner Cartridges' under Entry 41A(xxv) of the DVAT Act, based on their association with printers specified under HSN 84.71.