2015 (9) TMI 1511 - HC - VAT and Sales Tax

Classification of goods - UPS and CVT - taxed at 4% only under the relevant entry No.50 of the Notification dated 27.03.1995 or in the residuary entry attracting 10% rate of tax - the issue involved in the instant petition is already covered in favour of the respondent-assessee and decided by coordinate Bench of this Court in the case of Assistant Commissioner, Special Circle-I, Commercial Taxes Deptt., Jaipur Vs. M/s Bits & Bites, Jaipur 2011 (3) TMI 1516 - RAJASTHAN HIGH COURT where it was held that sale of CVT and UPS was taxable at the rate of 4% in the hands of assessee as accessories of computers and could not be taxed at 10% in the residuary entry of the relevant notification - Held that - in view of the judgment rendered by coordinate Bench of this Court on the identical issue vide judgment, referred to, the instant petition stands dismissed - decided against Revenue.

Summary

Issues Involved:
Interpretation of tax notification for goods classification under specific entry vs. residuary entry.

Analysis:
The judgment dealt with the interpretation of a tax notification regarding the classification of goods under a specific entry versus a residuary entry. The petitioner's counsel referred to a previous decision by a coordinate Bench of the same court in a similar case. The court examined the relevant paras of the previous judgment, emphasizing that goods like UPS and CVT, even if not integral parts of a computer, can be considered accessories supporting computer operations. The court noted that the word "accessory" has a broad meaning and need not be narrowly construed. It highlighted that since the goods in question aid computer operations, they fall within the scope of the specific entry in the notification, taxed at 4%, rather than the residuary entry at 10%.

The court rejected the revenue's contention that since the goods could be used as accessories for other items like refrigerators or TV sets, they should not be classified under the specific entry for computers. The court clarified that the same goods could be taxed at different rates when sold as accessories to different items by registered dealers. However, in the present case involving a dealer of computers and computer accessories, the goods were rightly taxed at 4% under the specific entry. The court upheld the decisions of the lower appellate authorities, concluding that the sale of CVT and UPS as accessories of computers should be taxed at 4% and not 10% under the residuary entry.

Based on the previous decision by a coordinate Bench on the same issue, the court dismissed the instant petition, aligning with the earlier judgment's findings. The court emphasized that the goods in question were rightly classified as accessories of computers under the specific entry in the notification, warranting taxation at 4%, and upheld the decisions of the lower authorities in favor of the assessee. The revision petitions filed by the revenue were dismissed accordingly, with no costs imposed.