TMI Blog1991 (11) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called "the Act"). Consequently their sellers charged concessional rate of tax at 3 per cent on their sales and paid tax at that rate. The turnover for the four years were as follows: 1973-74 .... Rs. 2,17,874.56 1974-75 .... Rs. 1,89,193.08 1975-76 .... Rs. 95,705.17 1976-77 .... Rs. 1,30,665.00 The assessees sold the dynamo lamps with the cycles. The Assistant Commissioner found that the assessees had not used the dynamo lamps as component parts of the cycles but only as accessories to the cycles. Consequently he found that the assessees ought not to have given the form XVII declaration enabling payment of concessional rate of tax. Holding it as a violation under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 45(2)(e) of the Act by filing form XVII declaration and hence liable under section 23 of the Act to pay penalty. On the other hand Mr. Inbarajan, learned counsel for the assessees, submits that dynamo lamps are in reality component parts of cycles and not merely accessories. He refers to certain decisions on the point, to which we will make a reference a little later. He also argues that in any event the assessees had sold the dynamo lamps along with the cycles and assessees action in filing form XVII declarations was under a bona fide impression and does not call for penalty. 5.. In Indo-Japanese Industries Ltd. v. Assistant Collector of Central Excise [1986] 24 ELT 527 (Cal) the question was whether cycle dynamo lamps were eligible f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial Tax Officer [1991] 80 STC 233, the Supreme Court held that car seat covers and upholstery manufactured and sold in the course of his business by a dealer are "accessories" to motor vehicles. The Supreme Court observed whether an article or part is an "accessory" cannot be decided with reference only to its necessity to the effective use of the motor vehicle as a whole and that general adaptability may be relevant, but it is not by itself conclusive. On the other hand in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Union Carbide India Limited [1976] 38 STC 198 the Kerala High Court was dealing with the leakproof or dry-cell batteries and whether they are spare parts or accessories of transistors. Observed the Kera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a cycle to have a light while riding a bicycle during night it cannot be held that dynamo lamp was component part of the cycle. 6.. Having given our anxious consideration to the question, we are inclined to accept the opinion of Mohan, J. (as he then was) in T.I. Miller Ltd. v. Union of India [1987] 31 ELT 344 (Mad.). With respect we are unable to follow the decision of the Calcutta High Court in Indo-Japanese Industries Ltd. v. Assistant Collector of Central Excise [1986] 24 ELT 527, because we feel that dynamo lamps have only a functional utility when the cycle is taken out during night. It cannot also be disputed that for the purpose of conforming to the Traffic Rules it is enough if the cyclist carries some kind of lamp, be it a dyna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form XVII declarations, were taxed by the assessing officer. It was held that the said articles would fall under item 41 of the First Schedule. But the Tribunal, on appeal held that the sale of the said articles could not be brought under entry 41 of the First Schedule and liable to be taxed at multi-point rates. The assessing authority issued a notice under section 23 of the Act in respect of two assessment years during which the assessees had used the motors and pistons which had been purchased by them on issuing form XVII declaration in the manufacture of air-compressors, and car washers, which did not fall under any of the items mentioned in the First Schedule. In short, the levy of penalty under section 23 of the Act was called for bec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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