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2023 (6) TMI 57 - RAJASTHAN HIGH COURTClassification of goods - applicable rate of tax - LAN Connection Cable (CAT-5, CAT-6) - taxable under S. No. 3 or 24 of Part A of Entry No. 65 of Schedule-IV or at General Rate as per Schedule-V appended to the Rajasthan Value Added Tax Act, 2003? - HELD THAT:- The word ‘computer system’ and ‘peripheral’ is not defined anywhere in the RVAT Act. At this juncture, it would be apt to consider the way in which it has been interpreted by different Courts. In the case of KORES (INDIA) LIMITED VERSUS ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ANTI EVASION [2016 (2) TMI 1363 - RAJASTHAN HIGH COURT], Coordinate Bench of this Court observed that That as a matter of fact, the entry is wider, which includes not only computer printers, but computer peripherals also. This Court finds no justification in the contention raised by the learned counsels for the Revenue, that the word peripherals has to be construed narrowly to limit and include only accessories like, mouse, webcam or keyboard, as computer peripherals, to be taxed @ 4% under the said entry, and not to include therein the Multi Functional Devices. Further, in the case of M/S SHARP BUSINESS SYSTEMS (INDIA) LTD. VERSUS THE ASSISTANT COMMISSIONER ANTI-EVASION, ZONE-I, THE RAJASTHAN TAX BOARD, KAR BHAWAN, THE ASSISTANT COMMISSIONER ANTI-EVASION AND (VICE-VERSA) [2017 (5) TMI 1808 - RAJASTHAN HIGH COURT], Co-ordinate Bench of this Court observed that Merely because “FM” specifically has not been included in entry 7, is no reason to infer that it will fall in Schedule-V. Once the claim of the assessee is that it fall under entry 7 Schedule- IV, then the revenue has to bring material on record, which has not been brought on record. From the analysis of the aforesaid judgments, it is clear that the term peripheral has been given an expansive meaning and is not restricted to input/output devices, as contended by the Revenue. It is also clear that even if the goods in question can have different applications independent of computer, the same would not preclude them from being considered computer peripheral if they are also being used in computer system to expand the capabilities of computer system. The Entry No. 3 and 24 of Part-A of Schedule IV to the RVAT Act was subsequently amended to specifically include “networking items” in Entry 3 and “networking cables of different types such as Flat Cables, CAT 3 cables, CAT 5 cables, CAT 6 cables” in Entry 24. What is significant is that the amendment was brought into force the same day of the introduction of State Budget for the year 2013-2014, wherein while introducing the Budget, the Hon’ble Chief Minister specifically acknowledged the difficulties faced by different businesses engaged in the sale of ‘computer related items’ and resolved to set a clear rate of tax on such items - HSN can only be used for limited purpose of aid and assistance in matters pertaining to RVAT Act as the HSN has not been adopted under RVAT Act and it thus lacks statutory force. In the given case, for the reasons as stated above, it can safely be concluded that the goods in question would fall under Part-A of Schedule IV to the RVAT Act and therefore resort to HSN is not necessary. The question(s) of law framed have to be answered in favour of the petitioner-assessee and against the Revenue - Revision allowed.
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