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2015 (4) TMI 167 - HC - VAT and Sales TaxClassification of goods - computer peripherals / router - whether the goods sold by the respondent/assessee is exigible to tax at the rate of 4% as goods falling under Sl. No.22 of Entry 68 of Part B of I Schedule or falling under Entry 69 of Part C of the I Schedule of the Tamil Nadu Value Added Tax Act, 2006, (hereinafter called as TNVAT Act, 2006) as claimed by the Revenue - Held that - What are all computer peripherals have not been defined in Serial No.22 of Entry 68 of Part B of I Schedule to TNVAT Act, 2006. Therefore, whatever goods, which are falling within the definition of peripheral would be entitled to such a benefit. We find that router , from the nature of its use in conjunction with the computer as has been defined by the Appellate Deputy Commissioner and the Tribunal based on relevant computer related dictionary and data, is a peripheral of a computer. It is also held by the Tribunal that router is a computer network device that transmits data from one area to another and expands the capabilities of the computer, hence, it does not form part of core computer architecture. Therefore, we find that the Appellate Deputy Commissioner as well as the Tribunal are justified in holding that the goods sold by the assessee, namely, router, is a computer peripheral, falls under Serial No.22, Entry 68 of Part B of I Schedule of TNVAT Act, 2006. - No question of law arises - Decided against Revenue.
Issues:
1. Whether the goods sold by the respondent/assessee are exigible to tax at the rate of 4% under Entry 68 of Part B or 12.5% under Entry 69 of Part C of the TNVAT Act, 2006? Analysis: The Revenue challenged the assessment of a dealer in computers and spares, arguing that routers sold by the dealer should be taxed at 12.5% under Entry 69 of Part C, not at the concessional rate of 4% under Entry 68 of Part B. The Assessing Officer rejected the dealer's claim, leading to an appeal before the Appellate Deputy Commissioner. The Appellate Deputy Commissioner, relying on a definition of a router from Wikipedia, concluded that routers are computer peripherals falling under Entry 68, thus eligible for the 4% rate. The Tribunal upheld this decision, emphasizing that routers are network devices forwarding data and expanding computer capabilities, not forming part of the core architecture. The Tribunal's decision was based on definitions from the Microsoft Dictionary and the Information Technologies Act 2000, supporting the classification of routers as computer peripherals eligible for the 4% rate. The Revenue appealed the Tribunal's decision, leading to the present Tax Case (Revision) before the High Court. The Court considered the definition of "peripheral" and the nature of routers as ancillary devices outside the core computer architecture, expanding computer capabilities. It noted that routers, as defined by the Tribunal, are computer peripherals that transmit data between areas, justifying their classification under Entry 68 for the 4% tax rate. The Court found no substantial question of law, confirming the Tribunal's decision and dismissing the Tax Case (Revision). In conclusion, the High Court upheld the Tribunal's decision that routers are computer peripherals falling under Entry 68 of Part B of the TNVAT Act, 2006, eligible for the 4% tax rate. The Court found no legal issues warranting further consideration, confirming the Tribunal's ruling and dismissing the Revenue's appeal.
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