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TMI Blog2005 (10) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... citors" are to be treated as "electronic goods" within the meaning of that term under various Government Orders, viz., G.O. Ms. No. 864, dated September 7, 1993, G.O. Ms. No. 252, dated May 19, 1995 and G.O. Ms. No. 653 dated July 31, 1997. The assessing authorities in some of the cases while framing assessments accepted the claim treating the "capacitors" as "electronic goods" and levied concessional rate of tax, while in some of the cases, the assessing officers negatived the claim as to the concessional rate of tax leviable on the "capacitors" sold by them. Where the assessees are not successful before the assessing authorities, they have preferred appeals, while in the cases where the assessing authorities accepted the claim of the dealers, the assessments were revised by the Deputy Commissioner (CT). Similarly, where the appeals were allowed, such orders were revised by the appropriate revisional authority and finally all the matters went in appeals before the Sales Tax Appellate Tribunal. Though the Appellate Tribunal disposed of the appeals under different orders, but the conclusion is identical negativing the claim of the dealers that "capacitors" are not "electronic goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is stated that the said notification has even defined the term "electronic goods", apart from specifying as many as 12 items, which would come within the above term of "electronic goods". In addition, as there was certain difficulty in ascertaining which are the items of goods, which would come under the said definition of "electronic goods", on the representations seeking clarification, the Government of Andhra Pradesh issued a memo dated June 1, 1989 clarifying the position and informing the Commissioner of Commercial Taxes that the Government has decided that the list of electronic items prepared by the Electronics Commission may be followed for the purpose of concessional rate of tax on "electronic goods" ordered in G.O. Ms. Nos. 520 and 521. In terms of the said memo issued by the Government, the Commissioner of Commercial Taxes issued a circular dated July 13, 1989 clarifying the above position as specified in the Memo of the Government and the assessing authorities are requested to take action accordingly. It is stated by the learned counsel that though G.O. Ms. No. 520 was rescinded by G.O. Ms. No. 864, dated September 7, 1993, except for the change in the concession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand of the department as well as the Tribunal, the learned Standing Counsel contended that in order to get the benefit of concessional rate of tax the item that is being dealt with by the dealers has to conform the requirements to be treated as an "electronic goods" or component or material. According to the learned counsel irrespective of the description of a particular item unless such item functions on the electronic principle, it would not get the benefit of concessional rate of tax under the Government Orders issued from time to time. According to the learned counsel, the Tribunal considered this test whether the "capacitors" dealt with by the petitioners satisfies the test that the same functions on the electronic principle or not and found that the "capacitors" are not satisfying the required test, being functioning on the electronic principle, and therefore, negatived the claim. In view of the said finding recorded by the authorities the dealers are not entitled for any relief. On factual aspects, the learned counsel also contended that some of the dealers, in fact, have collected higher rate of tax from its customers, and therefore, it is not open to the dealers to claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in G.O. Ms. Nos. 520 and 521, which were in operation in the field as on that date. Following the said Memo of the Government, the Commissioner of Commercial Taxes in turn issued a circular dated July 13, 1989, conveying the same to all the assessing authorities. Subsequently, G.O. Ms. No. 520 was rescinded by G.O. Ms. No. 864, but at the same time granting the benefit of concessional rate by increasing from two paise, which was fixed under G.O. Ms. No. 520 to four paise in a rupee at the point of first sale in the State with effect from August 1, 1993. The said Government Order contains the same para 2 as was contained in G.O. Ms. No. 520 and also enumerates the same 12 items that are enumerated in the earlier Government order. This was followed by G.O. Ms. No. 252 where the relevant notification was in para XXX, which is also in the same lines and also enumerating the same 12 items. By the subsequent orders in G.O. Ms. No. 653, dated July 31, 1997 the rate of tax was reduced from 4 per cent to 3.5 per cent without effecting any of the terms in G.O. Ms. No. 252, which continued to be in operation except the amendment as to the rate of tax. The contention of the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal allowed the claim of the assessee treating the batteries as electronic component. But, however, this decision was distinguished by the Tribunal in the impugned orders on unsustainable grounds. In India Extrusion v. Commissioner of Commercial Taxes [2001] 124 STC 474 (AP), another division Bench of this court to which one of us (SAR, J.) is a party had an occasion to consider the G.O. Ms. Nos. 520 and 521 as well as the clarificatary memo issued by the Government. While considering whether cable jointing kits are electronic goods or not, the division Bench also referred to the decision of the apex court in State of Orissa v. Dinabandhu Sahu & Sons [1976] 37 STC 583, where the apex court while dealing with as to the binding nature of the notification issued by the Ministry of Finance, Department of Economic Affairs, Government of India, with reference to certain commodities under the head "oil-seeds" was pleased to observe: "It cannot, however, be denied that the Ministry of Finance, Department of Economic Affairs, is intimately conversant not only with the policy of legislation for the purpose of implementation of the provisions of the Central Act but is also familiar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh [1988] 68 STC 324, the apex court had an occasion to consider the user test while interpreting the term "timber", and observed-- "The nature of the goods cannot be determined by the test of the use to which they are capable of being put. The user test is logical but inconclusive. The particular use to which an article can be applied in the hands of a special consumer is not determinative of the nature of the goods". In Porritts & Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433, the apex court, while considering the exemption notification with reference to dryer felts made out of cotton or woollen yarn by process of weaving and commonly used as absorbents of moisture in paper manufacturing units, held that all varieties of cotton, woollen or silken textiles falling under item XXX of Schedule B of the Punjab General Sales Tax Act, 1948 are exempt from tax. The authorities including the Tribunal rejected the claim on the ground that the dryer felts were textiles within the meaning of item XXX of Schedule B. They were, therefore, not exempt from sales tax. On a reference, the High Court also confirmed the view of the lower authorities. But, however, the apex court rever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respective of the local sales tax paid by himself and the relevant observation is "An amendment which is by way of clarification of an earlier ambiguous provision can be useful aid in construing the earlier provision, even though such an amendment is not given retrospective effect." In Indo National Ltd. v. State of Andhra Pradesh [1987] 64 STC 382, a division Bench of this court while considering whether dry-cells would fall under which of the entries of the First Schedule, viz., 3, 38, 137, 152, it was held that even if an item falls under more than one entry, the said item should be considered under one where a lower rate of tax is applicable and accordingly held that dry-cells should be considered under entry 38, which provides lower rate. In S. Gopal Reddy v. Commissioner of Income-tax [1990] 181 ITR 378 , a division Bench of this court while construing the second proviso to section 54E(1) of the Income-tax Act, 1961, which was inserted by way of amendment, holding it as a clarificatary, observed as under: "A taxing statute or any other statute has to be construed reasonably. The effort should always be made to ascertain the intention of Parliament from the words employed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are intended to encourage the electronic industry, therefore, the said orders have to be liberally construed so as to serve the purpose for which they are intended. Further, the State Government which issued the orders granting concessional rate of tax itself issued a clarificatory memo adopting the items that are enumerated by the Electronics Commission for the purpose of extending the benefit of concessional rate of tax treating those items as items falling within the purview of the orders issued by the Government. Though the clarificatory memo issued by the Government and the consequential circular are with reference to the G.O. Ms. Nos. 520 and 521, and though the G.O. Ms. No. 520 was rescinded by a subsequent series of orders, the sum and substance of the Government Orders have not altered, except variation as to the rate of tax. Further, even the Government did not rescind or cancel the clarificatory memo issued by it, so also the circular issued by the Commissioner. Further, the G.O. Ms. No. 521 issued under the CST Act was not rescinded or altered and continues to be in operation. In the light of the said position, would it be open to the department to contend that the clar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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