STATE OF TAMIL NADU Vs. UNIVERSAL AGENCIES

JUDGEMENT

(1.) THE two points that arise for consideration in this tax case are : (1) Whether the purchase turnover under section 7-A of the Tamil Nadu General Sales Tax Act, 1959, could be included in the total turnover and (2) Whether the copper wire manufactured and sold by the assessee could be brought in under entry 41 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. So far as the first question is concerned, we have the recent decision of the Full Bench of this Court in T.C. No. 731 of 1977 - State of Tamil Nadu represented by Deputy Commissioner (C.T.), Madras Division v. Manakchand dated 3rd February, 1983, holding the purchase turnover taxable under section 7-A of the Tamil Nadu General Sales Tax Act, 1959, should also form part of the total turnover of the assessee. Following the said decision of the Full Bench we have to hold that the purchase turnover of the assessee taxable under section 7-A of the said Act will have to be included in the total turnover. THE Tribunal had held that the purchase turnover under section 7-A of the said Act cannot be included in the total turnover of the assessee and this view is quite inconsistent with the view expressed by the Full Bench in (T.C. No. 731 of 1977) State of Tamil Nadu represented by Deputy Commissioner (C.T.), Madras Division v. Manakchand which has been rendered subsequent to the decision of the Tribunal. THE decision of the Tribunal on that aspect of the case is therefore set aside.

(2.) COMING to the second question, it is seen that the assessee is manufacturing alloy copper wires. It is the case of the assessee that the copper wire manufactured by it cannot be used as electrical wire and that it can be used only for earthing purposes. It is also the assessee's case that the alloy copper wires manufactured by it are mainly sold for other uses or purposes, and therefore, the wires manufactured by it cannot be brought under the term "electrical goods" referred to in entry 41. According to the assessee the alloy copper wires manufactured by it are used widely in the manufacture of water tanks, copper rivets, nails, vessels, handles, bolts and nuts, etc., and that in fact the wires sold to the electrical dealers or electrical contractors form only an insignificant part of their sales, and therefore, the wires manufactured by it cannot be brought under entry 41. The Tribunal has accepted the said contention of the assessee and has held that it is only the wire which can be used as electrical wire, i.e., used for transmission of the energy, that can be brought under entry 41, and the alloy copper wires manufactured by the assessee which cannot be used as electrical wire for the transmission of the energy, the same cannot be taken to fall under entry 41.

(3.) THE Tribunal has proceeded to assume that the object of the amendment is only to increase the rate of tax and not to bring any new items in entry 41. We do not see how such an assumption came to be made. A comparison of entry 41 as it exists now with the same provision before its amendment will clearly indicate that the amendment is intended to bring in more articles under that item. THE expression "the use of which cannot be had except with the application of electrical energy" has been deleted in the present entry 41. THErefore, the limiting factor in old entry 41 which restricted the items of electrical goods to those articles the use of which cannot be had except with the application of electrical energy is no longer there and all goods which will come under the expression "electrical goods" will come within entry 41 and have to be taxed at a single point at 9 per cent. Whatever be the objects and reasons for bringing the amendment by Tamil Nadu Act 15 of 1975, the expression or language actually used by the legislature in the entry will have to be understood and given effect to. As it is, after the amendment, entry 41 takes in all kinds of electrical goods, including wires, holders, plugs, switches, casings, cappings, reapers, bends, junction boxes, meter boxes, switch boxes, meter boards, switch boards, electrical earthernwares and porcelainware. As it is, even the electrical goods the use of which can be had even without the application of electrical energy can be brought under entry 41. THErefore, the wire used for earthing purposes will clearly fall within the definition of "electrical goods".