2014 (5) TMI 369 - HC - VAT and Sales Tax

Electronic gas lighter - Whether Tribunal was right in relying on the Dictionary meaning, when the same item is treated by the Gujarat Act as an item falling under electronic goods Rate of Tax - Tax Exemption - Classification - Electronic gas lighter - Held that - As seen from the orders passed by the Assessing Authority, the Assistant Appellate Commissioner and Tribunal, though from the beginning it is the case of the assessee that it is an electronic good and also vehemently contended that it falls under Entry 41(c) of the First Schedule and not under Entry 123 of the First Schedule and also disputed levy of tax at 8%, all the three authorities have given their own consideration by consistently holding that the assessee has not maintained its records either through purchase or sale of the above said goods - Therefore, in the absence of such materials and in view of the the elaborate consideration of the Tribunal based on the circulars issued by the Special Commissioner and CCT and extracting the dictionary meaning thereby satisfying themselves for rejecting the claim of the assessee, no purpose will be served in remanding the matter back - This Court is satisfied that the authorities have not committed any illegality or mistaken definition of the meaning of the term, electronic good , while holding that electronic gas lighter is not an electronic good operated through electricity or devices like sensor, but it is operated manually, as per the circular issued by the Special Commissioner and Commissioner of Commercial Taxes Thus, Revision is dismissed Decided against assessee.

Summary

Issues Involved:
1. Classification of gas lighters as electronic goods or otherwise.
2. Applicability of tax rates based on classification.
3. Reliance on dictionary definitions versus statutory definitions.
4. Consistency in classification across different states.

Detailed Analysis:

1. Classification of Gas Lighters:
The core issue revolves around whether gas lighters should be classified as electronic goods. The petitioners argued that gas lighters are electronic goods, thus eligible for a concessional tax rate of 3%. They cited the Gujarat Sales Tax Act, which classifies these items as electronic goods. However, the Assessing Officer, Appellate Authority, and Tribunal consistently classified gas lighters under Entry 123 of the First Schedule, subjecting them to an 8% tax rate. The Tribunal relied on the Oxford Advanced Learners Dictionary, defining 'electronic system' as having or operating with components or microchips controlling an electronic current, concluding that gas lighters do not fit this definition as they operate manually.

2. Applicability of Tax Rates:
The petitioners reported a taxable turnover of Rs. 2,09,373 for the assessment year 1992-93. Initially assessed at 3%, the assessment was revised to 8% based on a clarification from the Special Commissioner and Commissioner of Commercial Taxes. The revised assessment resulted in a taxable turnover of Rs. 3,04,495. The petitioners' failure to maintain proper records and provide supporting documents led to the rejection of their returns as incomplete and incorrect, prompting a best judgment assessment.

3. Reliance on Dictionary Definitions:
The Tribunal's reliance on the dictionary definition of 'electronic system' was a contested point. The petitioners argued that the Tribunal should have considered the Gujarat Act's classification and ISI specifications, which recognize gas lighters as electronic goods. They cited precedents where the Supreme Court and High Courts emphasized understanding goods in common parlance for taxing statutes. However, the Tribunal and lower authorities adhered to the dictionary definition, supported by the Special Commissioner's clarification, to classify gas lighters under Entry 123.

4. Consistency Across States:
The petitioners highlighted the inconsistency in treating the same item differently across states. They argued that gas lighters classified as electronic goods in Gujarat should be similarly classified under the Tamil Nadu General Sales Tax Act. Despite this, the Tribunal upheld the classification under Entry 123, emphasizing the lack of electronic operation in gas lighters.

Conclusion:
The High Court dismissed the tax case revision, affirming the consistent findings of the Assessing Officer, Appellate Authority, and Tribunal. The Court held that the authorities did not err in their interpretation, relying on the dictionary definition and clarifications from the Special Commissioner. The Court found no merit in remanding the matter, distinguishing it from a cited Division Bench judgment that allowed for reassessment based on additional evidence. The final judgment confirmed that gas lighters are not electronic goods, thus subject to an 8% tax rate, and upheld the assessment of Rs. 3,04,495 for the year 1992-93.