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1997 Supreme(Mad) 1419
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M.S. JANARTHANAM AND THE HONOURABLE MR. JUSTICE K.P. SIVASUBRAMANIAM
Lawrence and Mayo India Private Limited - Appellant
Versus
State of Tamil Nadu - Respondents
Tax Case (Appeal) No. 379 of 1993
Decided On : 04 December 1997
Theodolite, an instrument used for survey purposes, cannot be construed to fall under entry 8 of the First Schedule to the TNGSTA, which includes 'binoculars, telescopes and opera glasses'.
Headnote:
TAMIL NADU GENERAL SALES TAX ACT, 1959 - SCHEDULE I, ENTRY 8 - THEODOLITE - WHETHER FALLS UNDER ENTRY 8 - HELD, NO
Fact of the Case:
The assessee-dealers, who are dealers in scientific instruments, telescope, magnifiers, microscope, etc., sold 'theodolite', a survey instrument, to the tune of Rs. 2, 71, 458. The assessing officer levied tax at 15 per cent on the sales turnover for want of 'C' and 'D' forms, treating 'theodolite' as falling under entry 8 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 (TNGSTA), which included 'binoculars, telescopes and opera glasses'. The assessee-dealers contended that 'theodolite' is not at all falling under entry 8 of the First Schedule to the TNGSTA and consequently, the sales turnover of 'theodolite', amounting to Rs. 2, 71, 458 is liable to be taxed at multi-point at the appropriate rate, falling under section 3(1) of the TNGSTA.
Finding of the Court:
Theodolite', an instrument used for survey purposes, can, by no stretch of imagination, be stated to fall within entry No. 8 of the First Schedule appended to the TNGSTA.
Issues: Whether 'theodolite', a survey instrument, falls under entry 8 of the First Schedule to the TNGSTA?
Ratio Decidendi: 1. The court construed the meaning of 'theodolite' and 'telescope' as given in various dictionaries and encyclopedias. It held that 'theodolite' is an instrument used for precise measurement of horizontal and vertical angles, while 'telescope' is an optical device that focuses light from distant objects so that the image formed may be observed. 2. The court also referred to various precedents where courts have construed the meaning of articles or goods listed in an entry either in a taxing statute or other statutes for purposes of levying tax or duty of excise. It held that the goods listed in a particular entry had been construed in a commercial or popular sense in the sense of the goods, as understood by the people in the market and not in a technical or scientific sense. 3. The court further held that when a goods or product consists of various component products, what was intended for sale was the product as an integrated whole and not its component parts. The survey instrument 'theodolite', consisting of different component products, therefore, must have to be viewed a product as a whole, in the sense of a distinct article of trade, commercially understood by the people in the market, as different from telescope, a distinct article of trade.
Final Decision: The appeal is allowed. The order of the Joint Commissioner (SMR) of Commercial Taxes, Madras-5 setting aside the order of AAC, restoring the order of the assessing officer, viz., the Commercial Tax Officer, Triplicane-I Assessment Circle, is aside and the order of AAC is ordered to be restored. There shall, however, be, in the circumstances, no order, as to costs.
M.S. JANARTHANAM, J.
This appeal, at the instance of the assessee - Lawrence and Mayo India (Private) Ltd., No. 68, Anna Salai, Madras 600 002, is directed against the order dated November 25, 1992 in suo motu revision proceedings in Ref. No. M1/62015/92 of the Joint Commissioner (SMR) of Commercial Taxes, Madras 5.
2. The assesses, it is said, are dealers in scientific instruments, telescope, magnifiers, microscope, etc. The assessing officer, viz., the Commercial Tax Officer, Triplicane-I, Assessment Circle, Madras, in his assessment proceedings for the year 1988-89, levied tax at 15 per cent on the sales turnover of "theodolite" to the tune of Rs. 2, 71, 458 for want of "C" and "D" forms. The assessing officer treated the "theodolite"- a survey instrument, as falling under entry 8 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act No. 1 of 1959 - for short "the TNGSTA"). Entry 8 included in its fold, "binoculars, telescopes and opera glasses". The assessee-dealers' claim is that : theodolite", a survey instrument is not at all falling under entry 8 of the First Schedule to the TNGSTA and consequently, the sales turnover of "theodolite". amounting to Rs. 2, 71, 458 is liable to be taxed at multi-point at the appropriate rate, falling under section 3(1) of the TNGSTA.
(a) This sort of a claim made by the assessee was not at all accepted by the assessing officer and he construed "theodolite" as falling under entry 8 of the First Schedule to the TNGSTA and got the sales turnover, relatable to "theodolite", as stated above, assessed to tax at appropriate rate, as aforesaid, in the absence of production of "C" and "D" forms.
3. The aggrieved assessee-dealers filed appeal in C.S.T. No. 276 of 1991 before the Appellate Assistant Commissioner (C.T.) IV, Madras-108 (for short "the AAC"), who, in turn, after taking into consideration the relevant materials placed on record, and, of course, after hearing the arguments of learned representatives on either side, accepting the case of the assessee, allowed the appeal, by order dated January 22, 1992.
4. The Joint Commissioner (SMR) of Commercial Taxes, Madras-5, in his suo motu revision proceedings, after complying with the requisite formalities, set aside the order of the AAC and restored the order of the assessing officer, in the sense of the turnover relatable to "theodolite" amounting to Rs. 2, 71, 458 getting assessed to tax at the appropriate rate for want of "C" and "D" forms.
5. The aggrieved assessee-dealers resorted to the present action - Tax Case (Appeal) No. 379 of 1993.
6. From the pith and submissions of the arguments of Mr. C. Natarajan, learned Senior Counsel appearing for, the assessee-dealers and Mr. K. Elango, learned Government Advocate (Taxes) representing the Revenue, the one and only point that crops up for consideration is as to :" *
Whether, the order of the Joint Commissioner (SMR) of Commercial Taxes, Madras-5, construing 'theodolite' as falling under entry 8 of the First Schedule to the TNGSTA, and therefore, exigible to tax at the appropriate rate for want of "C" and "D" forms, on the facts and in the circumstances of the case, is sustainable in law ?
"7. Three goods with specific names are included in entry 8 of the First Schedule to the TNGSTA, viz., "Binocular, telescope and opera glasses". The contention of the Revenue is that "theodolite" in nothing, nut an improved version of a "telescope" and, therefore, the said instruments falls under entry 8 of the First Schedule, exigible to tax, at the appropriate rate. We have already noticed that the assessee-dealers, with all vehemence, contended that "theodolite" used for survey purpose, can, by no stretch of imagination, be construed to fall under entry 8 of the First Schedule and it is an item of goods liable to be taxed at multipoint, as falling under section 3(1) of the TNGSTA.
8. In the process of determination of the tenability or otherwise of the rival submissions, a
