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TMI Blog2018 (1) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... ( Order of this Court was made by S. Manikumar, J. ) Tax Case Revision No.54 of 2017, is filed against the order in S.T.A.No.33 of 2011, dated 16.05.2014, on the file of the Sales Tax Appellate Tribunal (Main Bench) Chennai. 2.1 Short facts leading to the Tax Case Revision are that the petitioner, Tvl.Kores India Ltd, is a dealer in Carbon Papers, Typerwriter Ribbon, Duplicate Ink etc, Chennai 02 and assessed to tax on a total and taxable turnover of ₹ 15,71,30,569/- and ₹ 7,61,32,830/- respectively, under the Tamil Nadu General Sales Tax Act 1959, for the year 2004-2005, by the Assessing Officer, vide order dated 02.06.2006. Subsequently, it was noticed by the Assessing Officer that sales turnover of toner cartridges and ink cartridges to a tune of ₹ 8,09,97,739/- was granted exemption, in the original assessment order and exemption already granted on this turnover was revoked by the Assessing Officer, for the reason that the item of toner cartridges and ink cartridges were not eligible for exemption from resale tax, as per G.O.Ms.No.82 dated 01.07.2002. 2.2. Aggrieved by this order, the petitioner filed W.P.No.2229/2008 and M.P.No.1/2008 and vide order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, he prayed for deletion of penalty also. 2.5. After verification of records and submission made by the petitioner, the Appellate Deputy Commissioner (CT) IV (FAC), Chennai, allowed the appeal, by setting aside the levy of tax at 1% under Section 3H and also deleted the penalty under Section 12(3)(b) of the Act vide proceedings in A.P.No.3 of 2010. Aggrieved over passed by the Appellate Deputy Commissioner (CT) IV (FAC), State of Tamil Nadu represented by Joint Commissioner (CT), Chennai (East) Division preferred an appeal before the Sales Tax Appellate Tribunal, Chennai, disputing the relief of tax under Section 3H at 1% on re-sales turnover of computer toner cartridges granted by the First Appellate Authority. The Sales Tax Appellate Tribunal vide order in S.T.A.No.33/2011 dated 16-05-2014, allowed the state appeal, in respect of the disputed re-sale turnover of ₹ 8,09,97,739/- at 1% and there by restored the revisional order of the assessing authority. 3. Instant Tax Case Revision is raising on the following substantial questions of law:- (iii) Whether the tribunal was justified in allowing a disputed turnover of ₹ 8,09,97,739/- when the Appellate Depute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax increased from 4% to 5% from 12.07.2011). Serial No.68 of Part B and Entries 22 and 24 would be relevant for the purpose of deciding the cases on hand. Serial No.68, Information Technology Products as notified by the Government, Entry 22 Computer Systems and Peripherals, Electronic diaries; (a) Computer systems, peripherals and parts (b) Electronic diaries Entry 24 Parts and Accessories of goods mentioned in serial Nos.21, 11,22 27. 33. In terms of the above entries computer systems, peripherals and parts, and parts and accessories of computer systems, peripherals and parts attract 5% tax. Peripherals has not been defined under the Act. 34. In Commissioner of Central Excise, Mumbai vs. CMS Computers Private Limited [2005-TIOL-57-SC -CX-LB], was an appeal against the judgment of the Tribunal wherein, the assessee was issued show cause notice by the department claiming that monitors and printers were parts of computers and required to be included in the value of computers and if such value to be included, the assessee was not entitled to the benefit of an exemption notification. The Hon'ble Supreme Court held that monitors or printers were perip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is in consonance with the statutory provision, namely, proviso to sub-section (2) of Section 3. In terms of the said proviso all spare parts, components and accessories of such goods shall also be taxed at the same rate, as that of the goods if such spare parts, components and accessories are not specifically enumerated in the First Schedule and made liable to tax under that schedule. 36. Admittedly, ink jet cartridges and toner cartridges have not been specifically enumerated in serial No.68 of Part B of the First Schedule. In such situation, the cartridges being parts and accessories of a peripherals, namely a printer, they should also be liable to tax at the same rate as that of the goods enumerated in Entry 22 and 24. It was contended by the respondent that the cartridges are consumables. On a careful perusal of the entries giving description of goods in Part B of First Schedule, we find that the term consumables has not been used in the VAT Act. Therefore, even if such term was used in the erstwhile TNGST Act, that can hardly be a reason to treat these cartridges as consumables under the VAT Act and resort to residuary entry No.69 of schedule C, which deals with any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unctioning of these cartridges was explained to us from which it appears that ink cartridge is a sophisticated Engineering design to provide and regulate back pressure, which is essential to perform its job of delivering the right amount of ink to the print-head nozzle and toner cartridge, which is fitted in laser jet printer generates laser beam which acts on the photo sensitive drum. Thus, the ink jet cartridge/toner cartridge is a part and accessory to a printer, which has been held to be a peripheral to a computer system. 40. In State of U.P. vs. Kores (India) Limited, [(1977) 39 STC 8] the question which arose for consideration is whether ribbon is an accessory or a part of the typewriter. It was held that the ribbon is an accessory and not a part of the typewriter unlike spool. The Hon'ble Supreme Court held that the description of the class of goods which are to be taxed under an Act have to be construed in the sense in which they are popularly understood by those who deal in them and who purchase and use them. 41. In Annapurna Carbon Industries Co., vs. State of A.P. [(1976) 37 STC 378] the question which arose for consideration is whether sales of arc-carbons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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