2002 (9) TMI 903 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether dental chairs are considered "furniture" under the Entry Tax Act.
2. Interpretation of the term "furniture" in the absence of a specific definition in the statute.
3. Applicability of entry tax on dental chairs brought into Kerala from outside the state.
4. Validity of the notices issued by sales tax authorities demanding entry tax on dental chairs.
5. Comparison of decisions from Bombay and Gujarat High Courts regarding the classification of dental chairs.

Issue 1:
The petitioners, dental doctors, or hospitals, purchased dental chairs from manufacturers outside Kerala, which were detained at sales tax checkposts for entry tax as "furniture" under the Kerala Tax on Entry of Goods into Local Areas Act. The petitioners argued that dental chairs are medical equipment, not furniture, citing decisions from the Bombay and Gujarat High Courts. The Government Pleader relied on a local court decision and a clarification stating dental chairs are "steel furniture."

Issue 2:
The Court emphasized that in interpreting items in taxing statutes, the common parlance meaning should be preferred unless a specific definition is provided. As the Entry Tax Act lacks a definition for "furniture," the common understanding should apply. Dental chairs, designed for medical use with electrical gadgets and adjustability, do not fit the common understanding of furniture, as per decisions from Bombay and Gujarat High Courts.

Issue 3:
The Court ruled that dental chairs, being medical equipment, do not fall under the category of "furniture" for entry tax purposes. The object of the Entry Tax Act is to prevent sales tax evasion, aligning the interpretation of entries in the Act with the Kerala General Sales Tax Act. Therefore, the petitioners were not liable to pay entry tax or penalties for importing dental chairs, and the assessing officers had no right to demand such taxes.

Issue 4:
The notices issued by sales tax authorities demanding entry tax on dental chairs were deemed invalid, as dental chairs do not meet the common parlance definition of furniture. The Court held that the clarification issued by the Commissioner under the Kerala General Sales Tax Act did not reflect the correct legal position, as the Entry Tax Act does not grant the Commissioner the power to issue such clarifications.

Issue 5:
The Court distinguished the decision in E.V. Industries' case, which dealt with hospital furniture like tables and lockers, from the current case involving dental chairs. The decisions from Bombay and Gujarat High Courts were found more applicable, supporting the petitioners' contention that dental chairs are not considered furniture for entry tax purposes.

In conclusion, the Original Petitions were allowed, declaring that the petitioners were not liable to pay entry tax or penalties for importing dental chairs. The impugned proceedings were canceled, and any appeals filed were deemed unnecessary as the original proceedings were quashed.