K M MOHAMMED HABEEBULLA Vs. STATE OF KERALA

JUDGEMENT

(1.) The question raised in the Tax Revisions is whether "electronic push button telephone" falls under electronic goods coming under Entry 49, which is later renumbered as Entry 55 of the First Schedule to the KGST Act or whether it comes under Entry 120, which is later renumbered as 134 of the First Schedule to the Act The claim of the petitioner is that electronic push button telephone is an electronic instrument falling under Entry 49, which is later renumbered as Entry 55 of the First Schedule and telephone referred to in Entry 120, which is later renumbered as Entry 134, is ordinary telephone other than electronically operated. Petitioner has referred to Notification, SRO 1728 of 1993 whereunder the Government while reducing rate of tax on electronic goods falling under Entry 49 of the First Schedule to the Act from 10 per cent to six per cent, specifically included electronic push button telephone under Entry 1.11 of the Schedule to the said notification. Counsel for the petitioner contended that the understanding of the Government itself is that electronic push button telephone is an item falling under Entry 49 at the relevant time when the above notification was issued, and so much so, the assessment confirmed by the Tribunal at higher rate of tax is not sustainable. Special Government Pleader on the other hand contended that all types of telephones, whether electronic or not, will fall under Entry 120 which is later renumbered as Entry 134 as the same is specific entry for telephones. He also referred to Entry 49 and contended that there are electronic items specifically mentioned in the Schedule which are not covered by Entry 49 and telephone is one such item covered by another entry, namely, Entry 120.

(2.) Counsel for the petitioner has relied on the decision of the Supreme Court BPL India Ltd. v. State of A.P. 121 STC 450, whereunder the Supreme Court held that automatic washing machines electronically programmed will fall under electronic goods, even though specific entry was provided for electrically operated washing machines. On going through the decision of the Supreme Court we find, the Supreme Court has gone into legislative intention to reduce rate of tax on electronic goods as a fillip to modern technology and to promote consumer electronic industry and accordingly granted lower rate of tax while classifying automatic washing machines under electronic goods inspite of specific entry for washing machines. The decision of the Supreme Court is squarely applicable here because electronic push button telephones are a class by themselves which are electronically programmed to store messages, telephone numbers, etc. Moreover we find that all electronic goods and instruments are covered by Entry 49 later renumbered as Entry 55 and the electronic goods excluded are those elsewhere specifically mentioned in the Schedule to the Act. The inclusion of telephones in Entry 120 along with other sound transmitting equipments, gramaphones, dictaphones, etc. is not a specific inclusion of electronic telephone. Therefore the telephone referred to in Entry 120 renumbered as Entry 134 is ordinary telephone and not the electronic push button telephone. In that view of the matter, electronic push button telephone is an electronic instrument falling under Entry 49 later renumbered as Entry 55 of the First Schedule to the KGST Act. Petitioner is therefore entitled to concessional rate of tax so long as notification was in force. However, for the period, electronic push button telephone enjoyed concessional rate of tax under the notification, petitioner is entitled to the same and for the other period, petitioner has to be assessed on electronic push button telephone under the Entry provided for Electronic goods.