Sales Tax: Are the ‘Survey Instruments’ covered by Entry 50 or Entry 14 of the Schedule- I of the Tamil Nadu General Sales Tax Act, 1959
Civil Appeal No. 10554 of 2010
Bench: Justice Shiva Kirti Singh; Justice R. Banumathi
Case Brief: by way of the present appeals, the common judgement and order of the Madras High Court in the tax cases and a writ petition are challenged. In the facts of the case, there was seen a dispute which was confined to the issue of law for the assessment years 1993- 1994 and 1994- 1995. In the question of law arose before the court, the Goods’ classification which were sold by the appellant is challenge. The appellant claimed to have engaged in the sale of electronic goods (survey instruments) which are imported from foreign countries and thus such goods were claimed to rightfully fall within Entry 50, Part- B of the Schedule- I of the Tamil Nadu General Sales Tax Act, 1959 attracting rate of 3 per cent. However, as per the authorities, the said survey instruments (either electronic or otherwise) are covered under Entry 14, Part- F of the Schedule- I of the Act and chargeable at the rate of 16 per cent. As such, the Commercial Tax Officer denied the claim of the assessee and assessed the appellant at 16 per cent leading to the demand of tax and also penalty. The Appellate Commissioner further and thereafter Tribunal also denied assessee’s claim and as such the matter was placed before the High Court. The High Court also rejected the case of the Appellant and confirmed the order of the Sales Tax Appellate Tribunal. Now, the Apex Court after considering the concerned Entry- 50 and Entry 16 under the Schedule- I of the Act, observed that there is no difficulty in accepting the consistent finding of the authorities based upon the declaration of the appellant in relation to the goods which were imported and declared before the customs authorities as survey instruments. However, the issue arose is that for falling under Entry 50 whether the goods would be out of Entry 14. Further, the court has considered the reliance placed by the appellant upon the judgement of the apex court, which was already discussed by the High Court in its judgement, and this court is also agree with the conclusion of the High Court, thus, for this and many other reasons the Court had denied the challenge of the appellant to extent to which he claimed the falling of his goods under Entry 50 of the Schedule- I of the Act. However, further, the court has consider the challenge under the appeal to the Writ Petition, where the Penalty was challenged. The court considered that there was a penalty imposed by the assessing authority under section 12 of the Act for failure to submit return or for submission of incorrect or incomplete return. Moreover, it was observed by the court that based on the situation, the dispute was arose on account of amendments in the Schedule in 1993. Court further found that the return submitted by the assessee was on account of bona fide belief in correctness of assessee’s stand that goods in question were chargeable only @ 3 per cent. Thus, the court set aside the balance dues of the penalty and the sums which have already been paid by the assessee will not ordered for refund, however, the same is ordered for retaining by the authorities by way of cost of litigation.
Read the Judgement: MS. Electro Optics (P) Ltd. Vs. State of Tamil Nadu