DEPUTY COMMISSIONER OF AGRICULTURAL INCOME-TAX AND SALES TAX LAW BOARD OF REVENUE TAXES ERNAKULAM Vs. UNION CARBIDE INDIA LIMITED

JUDGEMENT

(1.) THE assessee is the respondent in this tax revision case. It manufactures leakproof or dry-cell batteries, which are labelled as transistor batteries. THE assessee also manufactures cinema arc carbons. Two questions arise : Are the batteries spare parts or accessories of radios and transistors so as to fall under item 12 of the First Schedule of the Kerala General Sales Tax Act, 1963 ? Are the arc carbon parts or accessories required for use with cinematographic equipments so as to fall under item 14 of the said schedule ? According to the Sales Tax Officer and the Appellate Assistant Commissioner, such batteries and carbons fall respectively under items 12 and 14 of the said schedule. THE assessee, however, contended before these authorities that batteries fell under item 26 of the said schedule which relates to "all electrical goods". It also contended that carbons came under the residuary provision, namely, section 5 (1) (ii ). THEse contentions were rejected by the Sales Tax Officer and the Appellate Assistant Commissioner. But the assessee succeeded before the Sales Tax Appellate Tribunal, Trivandrum. THE Tribunal by its order dated 18th July, 1973, held that the dry-cell batteries fell under item 26 and the arc carbons under the residuary clause, namely, section 5 (1) (ii ). We shall now read the concerned provisions. Section 5 says : " 5. Levy of tax on sale or purchase of goods.- (1) Every dealer (other than a causal trader or agent of a non-resident dealer) whose total turnover for a year is not less than twenty thousand rupees and every casual trader or agent of a non-resident dealer, whatever be his total turnover for the year, shall pay tax on his taxable turnover for that year, - (i) in the case of goods specified in the First or Second Schedule at the rates and only at the points specified against such goods in the said schedules; and (ii) in the case of other goods, at the rate of four per cent at all points of sale. . . . . . " THE relative entries as they stood at the relevant time are : ------------------------------------------------------------------------ S. No. Description of the goods Point of levy Rate of tax ------------------------------------------------------------------------ 1 2 3 4 ------------------------------------------------------------------------ 12. Wireless reception instruments At the point of 12 and apparatus, radios and first sale in per cent radiogramophones, electrical the State by a valves, accumulators, dealer who is amplifiers and loud-speakers liable to and spare parts and accessories tax under thereof. section 5. 14. Cinematographic equipments do. 12 including cameras, projectors per cent and sound recording and reproducing equipments, lenses, films and parts and accessories required for use therewith. 26. All electrical goods (other do. 7 than these specifically mentioned per cent in this schedule), instruments, apparatus, appliances and all such articles the use of which cannot be had except with the application of electrical energy, including fans and lighting bulbs, electrical earthen-wares and porcelain and all other accessories and component parts either sold as a whole or in parts.

(2.) THE Tribunal found that the batteries manufactured by the assessment could be used for various purposes; the transistors were sold without batteries; these batteries could not be recharged once they were discharged. THE Tribunal, on the basis of such finding, held that the batteries could not be described as spare parts and accessories of wireless reception instruments and apparatus, and that they were electrical goods falling under item 26. As regards the arc carbons, the Tribunal found that they were general appliances, which could be used for various purposes such as special types of printing and processing; and also where intense brilliance was required, as in the case of search-lights, signalling lamps, cinema projectors and the like. It was therefore held that arc carbons, although called cinema carbons, were general goods falling under section 5 (1) (ii ).

(3.) TWO unreported decisions of the Andhra Pradesh High Court were placed before us by counsel for the revenue. In T. R. C. Nos. 46 and 47 of 1969, the Andhra Pradesh High Court held : " That the goods in question are required for use as accessories in cinematographic equipment is not in dispute. The mere fact that they could also be used for other purposes does not in any way take these goods out of the scope of item 4. . . . . . . Essentially, these goods, are the name itself demonstrates, are used as accessories in cinematographic equipment. The fact that they could be put to use for other purposes makes absolutely no difference. " Their Lordships also referred to an earlier decision of the same court in T. R. C. No. 26 of 1962, where it was held that cinema carbons were accessories required for use with cinematographic projectors.