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TMI Blog2008 (6) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax at the rate of 4% treating PCO Monitors as a type of computer falling under Entry 56 of the First Schedule to KGST Act. 3. Since the conceded turnover was less than Rs. 15,00,000/- the assessing authority has completed the assessments under Section 17(4) of the KGST Act, accepting the returns filed, but levying tax at the rate of 8% on the sales turnover of "PCO Monitor" treating it as an item falling under Entry 55 of First Schedule to KGST Act. 4. The appeals filed against the assessment orders passed for both the assessment years, were allowed by the First Appellate Authority following the earlier decision of the Appellate Tribunal, Additional Bench-I, Ernakulam in T.A. No. 159 of 2001, in which the Tribunal has held that PCO Monitor is also a type of Computer, exigible to tax under Entry 56 of First Schedule to KGST Act and the rate of tax is 4%. 5. The Revenue being aggrieved by the orders passed by the Appellate Assistant Commissioner, Ernakulam in S.T.A. Nos. 1801 of 2002 and S.T.A. No. 2263 of 2003 for the assessment years 2000-01 and 2001-02 respectively has filed Second Appeals before the Sales Tax Appellate Tribunal, Additional Bench-II, Ernakula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the term computer is as follows:- "Computer - a person or thing that computes, specif., an electronic machine that performs rapid, often complex calculations or compiles, correlates, and selects data". What is performed by PCO Monitor is exactly the same function as is given in the dictionary meaning. Therefore, is the Tribunal justified in law in holding that PCO Monitor will not fall under the entry 56 "Computer of all descriptions" in the 1st Schedule to the KGST ACT? (ii) The certificate issued by the Assistant Professor, Department of Electronics Engineering, Government Engineering College, Thrissur states that PCO Monitor is a computer controlled machine. Therefore, it is clear that the function of PCO Monitor is performed on account of the computer installed in it and the outer body is only an accessory to the computer. Applying the test of predominancy and functional character, is the Tribunal justified in law in holding that a PCO Monitor is not a type of computer? (iii) PCO Monitor has all the qualities of a computer. It performs rapid calculation, it compiles and selects data as any other computer. Therefore, its function is exactly that of a computer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the controversy between the parties, we need to know firstly what is "PCO Monitor" and how it works? 10. A Public Call Office is a telephone facility located in public place. In India, manned and automated (coin operated pay phone) versions of the service are in existence. There are two types of PCO, landline and wireless. Wireless PCO uses two kinds of technology, CDMA and GSM. The CDMA - Code Division Multiple Access is a channel access method utilised by various radio communication technologies. The GSM - Global System for Mobile Communication is a cellular network and is the most popular standard for Mobile Phones. To ensure accurate metering, PCO Monitors are used. They are also called "Call Charge Indicators". The pulses are given on telephone line every time the subscriber meter in the telephone exchange is incremented. Telephone call charge indicator uses these pulses to increment the chargeable units. 11. The PCO Monitor is also known as 'Phone Booth Call Meter', 'Telephone Call Meter' or 'Phone Call Calculator'. It is equipped with LCD Screen with Remote Display Units which can make the clients monitor their call details. It is designed to function on a stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puter differs from a PCO device or a simpler computing device like a calculator in that the computer is a multi-functional device that can perform more than a subject of tasks. Unlike a calculator or PCO monitor, a computer is able to store a program and retrieve information from its memory. For example, a calculator takes input from a keypad and performs some computation and displays it. A calculator operators on a subset of computational tasks that are limited to mathematical operating like addition and subtraction. A computer, on the other hand, can perform a whole gamut of tasks and can be programmed to perform more than subset of functions. Public Call Office Monitor is a micro processor based equipment connected to telephone instrument. It continuously monitors the telephone line. A PCO device displays the number that is being dialled, monitors the call length, does statistical calculations for the call and prints the total cost of call. Again, a PCO device does a subset of tasks in the entire realm of computing abilities. The subset of tasks that a PCO device can perform, therefore, is restricted to telephony related tasks. A PCO device cannot be programmed to perform oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 5 of the Act which is the charging provision. The rate of tax is at 4%. 15. The Apex Court in the case of Indian Aluminium Cables Ltd. v. Union of India, (1967) 64 STC 180, after referring to its earlier decisions has held, that, in determining the meaning or connotation of words and expressions describing an article in a tariff schedule, those words and expressions should be construed in the sense in which they are understood in the trade by the dealer and customer when goods are marketable. The court has observed, that, to consider whether an item falls within the meaning of an entry of a Schedule to an Act, it has to be seen whether its qualities would fall in any one of the entries or in any one of the items included in that entry. It is also well settled legal position that various entries in the Schedule have to be harmoniously construed so as to avoid confusion and over lapping. It is also well settled rule of construction of sales tax statutes that the words used by the legislature in entries in various Schedules to describe different kinds of goods for prescribing different rates of tax should be construed not in any technical or scientific sense, but as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., (1977) 39 STC 355. In the said decision, the precise question that came up for consideration is that whether or not Hume Pipes are "Sanitary Fittings" as contemplated by a notification issued by the Government under U.P. Sales Tax Act. The court while deciding this issue has relied upon the certificates issued by Local Self Government Engineering Department to show that the Hume Pipes supplied by the respondent was never used as 'sanitary fittings' since there was no other material produced by the State as against the certificate issued, the court gave relief to the assessee by rejecting the State's appeal. In our view, the decision relied on by the learned counsel for the assessee would not strengthen his case, in view of the essential difference we have observed in the course of our order. 19. The learned counsel would further contend that, if there are two entries - one general and the other special, the special entry should be applied for the purpose of levying tax. In support of this submission, the learned counsel has relied on the observations made by this Court in the case of Kevi Hardware v. State of Kerala, 2003 (2) KLT 776 (F.B.). We have no quarrel on this p ..... 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