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PUNJAB & HARYANA HIGH COURT
Harbans Singh and Bal Raj Tuli JJ.
Assessing Authority
Versus
Amir Chand Om Parkash
Letter Patent Appeal No. 12 of 1973,
Decided On : MAY 8, 1973
PUNJAB GENERAL SALES TAX ACT - SECTION 5(1) - SCHEDULE A - LUXURY GOODS - INTERPRETATION - COURT'S JURISDICTION TO DETERMINE WHETHER AN ITEM IS A LUXURY GOOD - FACTUAL BACKGROUND: - Dhoop and agarbatti (incense sticks) were classified as perfumery under Schedule A of the Punjab General Sales Tax Act, 1948, and were subject to a higher sales tax rate. - Glass test tubes, beakers, flasks, etc., used in school and college laboratories for educational purposes, were classified as glassware under Schedule A and were also subject to a higher sales tax rate. - Electrical water still automatic and electrical insulator and oven, used in school and college laboratories for educational purposes, were classified as electrical goods under Schedule A and were subject to a higher sales tax rate. - The issue before the court was whether the court had the jurisdiction to determine whether these items were luxury goods, even though they were included in Schedule A by the State Government.
Fact of the Case:
The assessee, a dealer in dhoop and agarbatti, challenged the assessment of sales tax at a higher rate on the ground that these items were not luxury goods. The assessee also challenged the assessment of sales tax at a higher rate on glass test tubes, beakers, flasks, etc., used in school and college laboratories for educational purposes, on the ground that these items were not luxury goods. The assessee also challenged the assessment of sales tax at a higher rate on electrical water still automatic and electrical insulator and oven, used in school and college laboratories for educational purposes, on the ground that these items were not luxury goods.
Finding of the Court:
The court held that the court had the jurisdiction to determine whether an item was a luxury good, even though it was included in Schedule A by the State Government. The court held that the State Government could only include luxury goods in Schedule A and that the court could determine whether a particular item answered the general description of an entry given in the schedule and was a luxury good.
Issues: 1. Whether the court had the jurisdiction to determine whether an item was a luxury good, even though it was included in Schedule A by the State Government. 2. Whether dhoop and agarbatti were luxury goods. 3. Whether glass test tubes, beakers, flasks, etc., used in school and college laboratories for educational purposes, were luxury goods. 4. Whether electrical water still automatic and electrical insulator and oven, used in school and college laboratories for educational purposes, were luxury goods.
Ratio Decidendi: 1. The court held that the court had the jurisdiction to determine whether an item was a luxury good, even though it was included in Schedule A by the State Government. The court held that the State Government could only include luxury goods in Schedule A and that the court could determine whether a particular item answered the general description of an entry given in the schedule and was a luxury good. 2. The court held that dhoop and agarbatti were not luxury goods. The court held that these items were used for religious purposes and were not items of personal hygiene or pleasure. 3. The court held that glass test tubes, beakers, flasks, etc., used in school and college laboratories for educational purposes, were not luxury goods. The court held that these items were indispensable for giving education to students getting scientific knowledge. 4. The court held that electrical water still automatic and electrical insulator and oven, used in school and college laboratories for educational purposes, were not luxury goods. The court held that these items were used for educational purposes and were not items of personal hygiene or pleasure.
Final Decision: The court dismissed the appeals filed by the department and answered the question referred by the Sales Tax Tribunal in the affirmative.
Harbans Singh, J.
1. This order will dispose of three appeals under clause 10 of the Letters Patent (L.P.A. Nos. 12, 13 and 126 of 1973) and General Sales Tax Reference No. 12 of 1972, which all raise a common question of law. The three appeals relate to Punjab whereas the business is carried on by the assessee in the sales tax reference at Ambala Cantonment in Haryana, but, for the purpose of the decision of the law point, there is hardly any difference between the law as applicable to the two States.
2. Section 5 of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act), is the taxing section. Sub-section (1) of this section is to the following effect: Subject to the provisions of this Act, there shall be levied on the taxable turnover of a dealer a tax at such rates, not exceeding seven paise in a rupee as the State Government may by notification direct:
Provided that a tax at such rate, not exceeding ten paise in a rupee, as may be so notified, may be levied on the sale of luxury goods as specified in Schedule A appended to this Act from such date as the State Government may by notification direct. The State Government after giving by notification not less than thirty days notice of its intention so to do may by like notification add to, or delete from, this schedule, and thereupon this schedule shall be deemed to have been amended accordingly.
3. Subsequently, some changes have been made by the Haryana State with regard to the rate or the period for which the notice is to be given. However, this does not in any way affect the matter before us. The sole point for decision before us is, whether, if an article is specified by the State Government in Schedule A not specifically, but only in a generic form and then a question arises, whether a particular article answering that general description is a "luxury goods" and, therefore, liable to tax at the enhanced rate, as provided in the proviso to Sub-section (1) of Section 5 of the Act, the question can be gone into by this court.
4. In L.P.A. Nos. 12 and 13 of 1973, the goods in dispute are dhoop and agarbatti. In L.P.A. No. 126 of 1973, the goods in dispute are test tubes, beakers, flasks, etc., while in the sales tax reference, they are electrical water still automatic and electrical insulator and oven, which are used in School and college laboratories for educational purposes.
5. So far as L.P.A. Nos. 12 and 13 of 1973 are concerned, according to the department, dhoop and agarbatti are covered by entry No. 16 of Schedule A as in force in Punjab State. This entry is to the following effect:
Cosmetics, perfumery and toilet goods, but not including tooth-paste, tooth-powder, soap and kum-kum.
6. In the third appeal (L.P.A. No. 126 of 1973), the glass test tubes, etc., according to the department, are covered by entry No. 23 of the aforesaid schedule, which runs as under:
Glassware, glazedware and chinaware, including crockery.
7. So far as the sales tax reference is concerned, it is entry No. 17 of Schedule A as in force in Haryana State, which is said to cover the items in dispute. This entry is as follows:
Electrical goods other than -- (a) electrical plant, equipments and their accessories including service meters required for generation, transmission, and distribution; or
(b) electric bulbs, plugs, plug-shoes, plug bases, bulb-holders, flexible wires, torches, torch cells and monoblock pumping sets.
8. Schedule A both in Haryana and Punjab bears the heading "List of luxury goods".
9. Messrs. Amir Chand Om Parkash, who are the respondents in L.P.A. Nos. 12 and 13 of 1973, filed Civil Writs Nos. 703 and 704 of 1972 in this court challenging the assessments made by the general sales tax authorities at the enhanced rate for the years 1968-69 and 1969-70, treating dhoop and agarbatti, in which the assessee was dealing, as "luxury goods" requiring the enhanced rate of sales tax, being covered by the description "perfumery" as given in entry No. 16 o
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