important point
When the item has been specifically included in the list prepared by Electronic Commission, the Tribunal could not have applied ‘functional test’, ‘operating principle’ or ‘user test’.

Headnote:(a)Andhra Pradesh General Sales Tax Act, 1957 r/w Central Sales Tax Act, 1956 – Capacitors – Whether ‘electronic goods’ entitled for concessional rate of tax – Government of Andhra Pradesh, deciding that the list of electronic items prepared by the Electronic Commission should be followed for the purpose of concessional rate of tax on electronic goods – The said list expressly containing the item ‘Capacitors’ – High Court was right in holding that ‘Capacitors’ could be said to be ‘electronic goods’ and was covered by a concessional rate of tax under the Act. (Paras 10, 15 and 20)
       1998 (111) STC 664 (AP); (2001) 124 STC 474 – Noticed with approval.
       (1989) Supp (2) SCC 523; (1999) 2 SCC 607; (2004) 6 SCC 722 – Referred.
       (b)Andhra Pradesh General Sales Tax Act, 1957 r/w Central Sales Tax Act, 1956 – Capacitors – Whether ‘electronic goods’ entitled for concessional rate of tax – When the item has been specifically included in the list prepared by Electronic Commission, the Tribunal could not have applied ‘functional test’, ‘operating principle’ or ‘user test’ – Only a limited inquiry as to whether the item had been included in the list prepared by the Electronic Commission was to be made by the Tribunal. (Paras 21 and 23)
       (c)Unjust enrichment – Where an assessee is not entitled to a particular benefit, he cannot be permitted to retain such benefit – No assessee can be allowed ‘unjust enrichment’ – Revenue given liberty to take appropriate proceedings for the recovery of the excess amount collected by any assessee by way of higher rate of tax from its consumers. (Paras 24 and 26)
       (1997) 5 SCC 536 – Relied upon.
       Facts of the case :
       1.The respondents in this appeal are manufacturers, dealers or traders of electronic goods, components and materials. They claimed that Capacitors, manufactured by them, was exigible to tax at a concessional rate as ‘electronic goods’ in terms of various Government Orders issued from time to time and not as ‘electric goods’ subject to higher tax. It was their case that the Assessing Authorities had taken conflicting views in different cases.
       2.All the matters were, therefore, placed before the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad. The Tribunal observed that the item in question i.e. Capacitors did not operate on electronic principle and could not be considered as ‘electronic’ goods or component for the purpose of concessional rate of tax.
       3.Being aggrieved by the orders passed by the Tribunal, the assessee approached the High Court of Andhra Pradesh by filing Revisions. The High Court held that it was clearly established that ‘Capacitors’ would fall under the category of ‘electronic goods’.
       Findings of the Court :
       When the item has been specifically included in the list prepared by Electronic Commission, the Tribunal could not have applied ‘functional test’, ‘operating principle’ or ‘user test’.
       Result : Appeals disposed of with observations.

JUDGMENT

C.K. THAKKER, J.—

1.Leave granted.

2.This appeal is filed by the State of Andhra Pradesh & Anr. (Revenue for short) against common judgment and order dated August 31, 2005 in several Revisions. By the impugned order, the High Court allowed Tax Revision Cases (TRC) filed by manufacturers, dealers and traders (assessee for short) and held that Capacitors is one of the items of electronic goods or components, taxable at a concessional rate of tax under the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as the State Act) as also under the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Act).

3.To appreciate the issue raised by the Revenue, few relevant facts may be stated.

4.The respondents in this appeal are manufacturers, dealers or traders of electronic goods, components and materials. They are duly registered under the State Act as well as Central Act. Their claim was that Capacitors, manufactured by them, was exigible to tax at a concessional rate as electronic goods in terms of various Government Orders issued from time to time and not as electric goods subject to higher tax. It was their case that the Assessing Authorities had taken conflicting views in different cases. In some cases, while making assessment orders, they accepted the case of manufacturers/dealers/traders treating Capacitors as electronic goods and levied concessional rate of tax; while in other cases, the Assessing Authorities negatived such claim as to concessional rate of tax and ordered to levy Capacitors as electric goods. Where the Assessing Authorities had decided against the assessee, the assessee challenged the action before the Tribunal and where the issue was decided by the Authorities in favour of assessee, the Revenue had challenged such decision. All the matters were, therefore, placed before the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad. The Tribunal considered the rival contentions of the parties as also provisions of the State Act and Central Act and various G.O.Ms. and observed that the item in question i.e. Capacitors did not operate on electronic principle and could not be considered as electronic goods or component for the purpose of concessional rate of tax. It, therefore, remanded the cases to the Assessing Authorities to pass fresh assessment orders giving opportunity to the assessee to produce any material to show that they sold Capacitors which could be said to be electronic goods.

5.Being aggrieved by the orders passed by the Tribunal, the assessee approached the High Court of Andhra Pradesh by filing Revisions. The High Court, on consideration of relevant provisions of law as also various G.O.Ms. and referring to several decisions, held that from the relevant material, it was clearly established that Capacitors would fall under the category of electronic goods and the Tribunal was wrong in upholding the contention of Revenue that the item could not be said to be electronic goods. The High Court also held that in G.O.Ms. issued by the Revenue from time to time, various items were expressly specified and Capacitors was one of them. In view of specific mention of the item, the Revenue was bound to grant benefit to the assessee of concessional rate of tax and the Tribunal was not justified in considering the question on the basis of operating principle. The said process could have been undertaken by the Tribunal had there not been a specific mention of the item and the question was required to be decided on general principle and practice. But once there was a list of electronic items prepared by the Electronic Commission and G.O.Ms. referred to those items wherein Capacitors was included, only thing the Tribunal required to do was to ascertain whether the item found place in the list or not. Once the item is included in the list, no further inquiry could have been undertaken. Accordingly, all Revisions were allowed and the issue was answered in favour of the assessee.

6.The Reve

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2007 Supreme(SC) 1349

important pointWhen the item has been specifically included in the list prepared by Electronic Commission, the Tribunal could not have applied ‘functional test’, ‘operating principle’ or ‘user test’.

Cases Referred (6)

important point
When the item has been specifically included in the list prepared by Electronic Commission, the Tribunal could not have applied ‘functional test’, ‘operating principle’ or ‘user test’.