2012 (5) TMI 140 - HC - VAT and Sales Tax

Whether or not multi functional printers are input or output units under Entry No.41A of the notification issued under the DVAT Act. - held that - the issue in question first requires determination of factual aspects viz., whether or not the multi functional machine in question, is in fact, input or output unit of an automatic data processing machine. For deciding this fact - Since petitioners have alternative remedy, writ petition dismissed.

Summary

Issues:
1. Challenge to notice of default assessment of tax and interest under Section 32 of the Delhi Value Added Tax Act, 2004.
2. Interpretation of whether multi functional printers are input or output units under Entry No.41A of the notification issued under the Act.
3. Assessment of multifunctional product under the unclassified rate of 12.5% for the assessment year 2007-08.
4. Determination of whether the multi functional machine is an input or output unit of an automatic data processing machine.

Issue 1: Challenge to Notice of Default Assessment:
The writ petitions were filed challenging the notice of default assessment of tax and interest under Section 32 of the Delhi Value Added Tax Act, 2004. An interim order was passed staying the demand, and the case was entertained based on the decision of the advance ruling authority in a related matter. The doctrine of principal and dominant purpose was applied to determine the classification of multi functional machines as input or output units under Entry No.41A.

Issue 2: Interpretation of Multi Functional Printers:
For the period after November 30, 2005, the judgment analyzed the relevant entries in 41A and compared them with the Central Excise Tariff Act, 1985. It was emphasized that the dominant purpose of a multi functional machine would decide its classification as an input or output unit of an automatic data processing machine. The onus was on the appellant to establish the principal purpose of the machine, and factual examination was deemed necessary for each machine.

Issue 3: Assessment of Multifunctional Product:
In the case of Infres Methodex Limited, assessments were framed subjecting multifunctional products to tax at an unclassified rate of 12.5% for the assessment year 2007-08. The judgment indicated that the decision in a related case would be equally applicable to this situation, emphasizing the importance of determining whether the machine is an input or output unit based on its principal purpose.

Issue 4: Classification of Multi Functional Machine:
The judgment reiterated the need to determine the principal purpose for which a multi functional machine was designed and manufactured to ascertain whether it qualifies as an input or output unit of an automatic data processing machine. It was suggested that statutory remedies should be exhausted to elucidate both questions of law and facts, and the writ petitions were dismissed with a direction for the petitioners to pursue such remedies.

This detailed analysis of the judgment provides insights into the challenges to the notice of default assessment, the interpretation of multi functional printers, the assessment of multifunctional products, and the classification of multi functional machines as input or output units of automatic data processing machines.