1976 (4) TMI 82 - AT - Income Tax

Summary

Issues Involved:
1. Rate of tax applicable to the sales turnover of microscopes and telescopes.
2. Jurisdiction to revise the assessment.

Issue-wise Detailed Analysis:

1. Rate of Tax Applicable to Sales Turnover of Microscopes and Telescopes:
The primary issue in this appeal concerns the rate of tax applicable to the sales turnover of microscopes and telescopes amounting to Rs. 4,066 for the assessment year 1971-72. The Joint Commercial Tax Officer initially assessed these items at multi-point rates of 3% and 3.5% under Section 3(1). However, he later revised the assessment under Section 16 on June 11, 1974, treating these sales as first sales liable to tax at 15% under Item 8 of the I Schedule read with Section 3(2).

The appellant contended that microscopes and telescopes are fundamentally different from the items listed under Item 8 of the I Schedule. The appellant argued that microscopes, which magnify small objects, are distinct from binoculars and telescopes, which are used to view distant objects. The appellant also invoked the concept of common and commercial parlance to support this differentiation.

The Revenue, on the other hand, argued that "binocular microscopes" fall within the term "binoculars" and "reading telescopes" fall within the term "telescopes" as per Entry 8 of the I Schedule. The Revenue supported its position with references from encyclopedias, dictionaries, and standard specifications.

2. Jurisdiction to Revise the Assessment:
The appellant also questioned the jurisdiction of the Assessing Officer (AO) to revise the assessment. Section 16(1)(b) allows for the revision of an assessment if the turnover is assessed at a rate lower than the applicable rate. Given that the AO viewed the correct rate as 15% under Item 8 of the I Schedule, the revision was deemed justified.

Analysis of Binoculars:
The term "binoculars" generally encompasses all types of binocular apparatus or instruments used for viewing objects with both eyes. References from Encyclopedia Britannica, Chambers Dictionary, and McGraw Hill Encyclopedia of Science and Technology support this broad interpretation. Binocular instruments include binocular microscopes and binocular telescopes, both of which fall under the term "binoculars."

Analysis of Telescopes:
The term "telescopes" refers to optical instruments designed to make distant objects appear nearer and larger. This includes both binocular and monocular telescopes. References from Oxford Illustrated Dictionary, Chambers Dictionary, and Encyclopedia Americana support this interpretation. The "reading telescope" in question is a type of microscope used in laboratories and falls within the scope of "telescopes" under Entry 8 of the I Schedule.

Analysis of Opera Glasses:
"Opera glasses" are essentially small binocular telescopes used in theaters. References from Chambers Dictionary, Oxford Illustrated Dictionary, and Encyclopedia Americana indicate that opera glasses are a type of binocular telescope, thus falling under the term "telescopes" in Entry 8.

Conclusion:
The Tribunal concluded that both "binocular microscopes" and "reading telescopes" fall within the scope of "binoculars" and "telescopes" respectively, as per Entry 8 of the I Schedule. The AO's classification and assessment at a 15% tax rate were found to be in order. The appeal was dismissed, affirming the revised assessment by the lower authorities.

The judgment emphasized that the interpretation and classification adopted by the authorities were supported by technological, scientific, and commercial usages, as well as dictionary meanings and settled positions clarified by the government. The Tribunal found no basis to interfere with the lower authorities' decision.