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1995 (3) TMI 190 - SC - VAT and Sales TaxWhether dry cell batteries manufactured by the assessees are eligible to tax under Entry No. 3 or Entry No. 38 of the First Schedule to the Andhra Pradesh General Sales Tax Act 1957? Whether the arc carbons manufactured by the assessees are eligible to tax under Entry No. 4 or Entry No. 38 of the First Schedule to the Andhra Pradesh General Sales Tax Act 1957 ? Held that - The decision of the High Court that arc carbons are taxable under Entry No. 4 of the First Schedule to the Act does not call for any interference. The expression accessories thereof in Entry No. 3 indicates that Entry No. 3 can be attracted only if the dry batteries or cells can be treated as accessories of the wire reception instruments etc. specified in Entry No. 3 or else they would fall under Entry No. 38 as other accessories of all electrical goods being the residuary entry. The dry cells or batteries marked for use in transistors as is the case of some such batteries manufactured by the Union Carbide India Ltd. alone during the pre-1976 period may fall under Entry No. 3 as held by the High Court. However multi-purpose batteries not specified for use in transistors alone cannot be treated as accessories thereof of wireless reception instruments etc. for the purpose of Entry No. 3. No infirmity in the view taken by the High Court. Appeal dismissed.
Issues Involved:
1. Taxability of dry cell batteries under Entry No. 3 or Entry No. 38 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. 2. Taxability of arc carbons under Entry No. 4 or Entry No. 38 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. Issue-wise Detailed Analysis: 1. Taxability of Dry Cell Batteries: The primary issue was whether dry cell batteries were taxable under Entry No. 3 or Entry No. 38 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. The High Court had held that only dry cell batteries marked "for transistors" were taxable under Entry No. 3, while multi-purpose dry cell batteries were taxable under Entry No. 38. The Tribunal's decision was challenged, and the Supreme Court examined the arguments from both sides. The State contended that all dry cell batteries should fall under Entry No. 3 as "accessories" of wireless reception instruments or as "accumulators." However, the Court noted that dry cell batteries are primary cells, distinct from "accumulators" or "storage batteries," which are secondary cells. The Court referenced various technical definitions to support this distinction, emphasizing that primary cells are not rechargeable, unlike accumulators. For the period before 1976, only Union Carbide India Ltd.'s batteries marked "for transistors" were taxed under Entry No. 3, while others were taxed under Entry No. 38. Post-1976, all dry cell batteries were taxed under Entry No. 38. The Court upheld this view, stating that multi-purpose batteries could not be predominantly categorized as accessories of wireless reception instruments to fall under Entry No. 3. 2. Taxability of Arc Carbons: The second issue was whether arc carbons were taxable under Entry No. 4 or Entry No. 38 of the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957. The High Court had held that arc carbons were taxable under Entry No. 4, a decision supported by the Supreme Court in Annapurna Carbon Industries Co. v. State of Andhra Pradesh. The assessee argued that arc carbons, being consumable, should not be considered accessories and thus should be taxed under Entry No. 38. However, the Court emphasized the predominant use of arc carbons in cinematographic equipment, aligning with the description in Entry No. 4. The Court highlighted that the general or predominant use determines the classification, and arc carbons were primarily used in projectors, justifying their categorization under Entry No. 4. Conclusion: The Supreme Court found no grounds to interfere with the High Court's judgment on both issues. The Court upheld that arc carbons are taxable under Entry No. 4, and dry cell batteries, except those marked "for transistors" before 1976, are taxable under Entry No. 38. Consequently, all appeals and the special leave petition were dismissed.
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