TMI Blog1965 (10) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... mestic electrical appliances within the meaning of entry 52 of Schedule B and the sales of electric fans were, therefore, taxable under that entry whereas the assessee contended that electric fans were not electrical appliances and that in any event, even if they were electrical appliances, they were not domestic electrical appliances since their essential or primary use was not for homes or houses but they were meant for use also in offices and commercial and industrial establishments and they were, therefore, not covered by entry 52 of Schedule B and since there was no other specific entry covering them, they fell within the residuary entry 80 of Schedule B. The contention of the assessee was rejected and the claim of the revenue to tax the sales under entry 52 of Schedule B was upheld by all the appellate and revisional authorities and the Tribunal also took the same view. The Tribunal held that in the context in which the words "domestic electrical appliances" occurred in entry 52 of Schedule B and on a consideration of corresponding entries in the previous sales tax statutes, it was clear that these words had an enlarged meaning which included electric fans, and electric fans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... row question which, therefore, arises for consideration is whether electric fans are domestic electrical appliances within the meaning of entry 52 of Schedule B. Mr. S.L. Mody, learned Advocate appearing on behalf of the assessee, contended that electric fans are not domestic electrical appliances and the reasons which he gave in support of this contention were two. The first was that they are not "electrical appliances" as understood in common parlance, which limits the meaning of that expression to articles like cookingranges, heaters, waffle-irons, etc., and the second was that in any event, even if they can be called electrical appliances, they are not domestic electrical appliances since their principal and primary use is not for the home or the house but they are also used extensively for offices and commercial and industrial establishments. Mr. A.D. Desai, learned Assistant Government Pleader appearing on behalf of the revenue, contested the validity of both these reasons and urged that fans are domestic electrical appliances according to the popular sense in which that expression is understood and even if the ordinary natural connotation of that expression is taken it would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Now it is undoubtedly true that when we turn to various entries in Schedules A and B, we find that the Legislature has at some places used the words "other than" and at some other places used the word "excluding". But there does not seem to be any legislative scheme or design behind the use of these different words and they do not seem to have been used deliberately as different legislative devices intended to provide for different situations. Take for example, entry 7 of Schedule B which talks of "raw wool, wool tops and woollen yarn (other than knitting yarn)". Knitting yarn would certainly be woollen yarn but the Legislature has yet used the words "other than". Another entry which may be noted in this connection is entry 58 of Schedule B which relates to "furs and skins (other than those of cattle, sheep and goats)". Here also the skins of cattle, sheep and goats would be included in the generic term "skin " and yet the words used by the Legislature are "other than" and not "excluding". It is therefore not possible to found any argument on the basis of a supposed distinction arising from the use of different words by the Legislature. Mr. S.L. Mody is, however, right when he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition of the words 'including the purchase of freehold property in England or Wales' must be construed as extending the effect of the clause so as to authorise the purchase of freehold property otherwise than as an investment, because he says that, if that were not so, these words would be meaningless. He has referred me to the well-known case of Dilworth v. The Commissioner of Stamps[1899] A.C. 99., in support of the proposition that the effect of the word 'including', when introducing expressions explanatory of the meaning of another word, is prima facie to enlarge the meaning of that word. It seems to me that the words 'including the purchase of freehold property in England or Wales' can be sufficiently accounted for by regarding them as having been inserted by the draftsman ex super abundanti cautela to make sure that no one would suggest that this clause did not extend to the purchase of freehold property as an investment. I think it is pressing the argument altogether too far to say that the effect of inserting those words must be to introduce some process which is not investing at all." This case of course related to words of inclusion but like words of inclusion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and furnaces, gas refrigerators, hot water heaters, kitchen cabinets and tables........." This passage is further elaborated in so far as it refers to accessory heat and ventilation and this is what the Encyclopaedia Britannica has to say under the sub-heading "accessory heat and ventilation": "Although the small electric fan has a certain popularity in the south of the United States and sells rapidly during a few weeks or months in the very warm weather, elsewhere electrical ventilation has never received the public response or use that is possible. Manufacturers provide domestic ventilation fans in a variety of units........" These passages from the Encyclopaedia Britannica which we have quoted above clearly show that electric fans are commercially regarded as domestic electrical appliances. To the same effect we also find observations in another well-known encyclopaedia, namely, Encyclopaedia Americana, where, under the heading "electrical appliance", it is stated as follows: "Electrical appliance: A term given to many devices operated by electricity which are used in the home for domestic purposes. Such appliances may be divided into two general classes: those operated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court thus laid down the test of principal or primary user and applied it in determining the question before it. This decision was strongly relied on by Mr. S.L. Mody on behalf of the assessee. As against this decision, Mr. A.D. Desai on behalf of the revenue cited before us a decision of the Mysore High Court in The State of Mysore v. Kantoomal Kishnomal[1962] 13 S.T.C. 313. , where the question was whether a crow-bar is an agricultural implement exempted from sales tax under Schedule III of the Mysore Sales Tax Act, 1948, and a Division Bench held that it is an agricultural implement. The Mysore High Court observed: "It is not denied that a 'crow-bar' is generally used as an agricultural implement. The question whether it is predominantly used as such an instrument to our mind appears to be an irrelevant question. The use of the 'crow-bar' for agricultural purposes is by no means a remote use. We are also in agreement with the contention of Mr. Gulur Srinivasarao, the learned counsel for the respondent, that the crow-bar is extensively used as an agricultural implement. That being so, we are in agreement with the conclusion reached by the Mysore Sales Tax Appellate Tribunal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder under section 30(2) or section 31(1) affecting any liability of any person to pay the tax, such person or the Collector may by application in writing......require the Tribunal to refer to the High Court any question of law arising out of such order and where the Tribunal agrees it shall draw up a statement of the case and refer it to the High Court. The argument of Mr. A.D. Desai was that question No. 2 related only to imposition of penalty under section 16(4) and penalty was not tax and the question, therefore, did not affect any liability of the assessee to pay tax and could not accordingly form the subject-matter of reference under section 34(1). This contention is, in our opinion, not well-founded, for it ignores the language of the section and misreads what is a condition affecting the order of the Tribunal as a condition requiring to be fulfilled by the question of law arising out of the order. What the section requires is that the order of the Tribunal in respect of which the reference application is made must be an order affecting any liability of any person to pay the tax. Once there is such an order, then any question of law arising out of such order can be referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, since section 16(2) as also rules 4 and 10 required that the assessee must pay the full amount of tax due according to the return into the Government Treasury before filing the return. The revenue urged that the tax due according to the return furnished by the assessee was Rs. 33,221.09 nP. and the assessee should have, therefore, paid the full amount of this tax into the Government Treasury before filing the return but the assessee failed to do so and paid only Rs. 10,000 and the condition specified in section 16(4) was, therefore, satisfied attracting the applicability of that provision. So far as section 16(5) was concerned on which, as we shall presently point out, reliance was placed on behalf of the assessee, the revenue submitted that that was a provision which merely prescribed the procedure to be followed before the revenue authorities could proceed to recover as an arrear of land revenue the amount of tax remaining unpaid at the time of furnishing the return. That provision had nothing to do with the prescription of the time for payment of the amount of tax due according to the return. The time for payment of the amount of tax due according to the return was prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from him according to the return before he furnishes the return, even though the assessment is not yet made on him. Sub-section (3) then provides for a case where the assessee, who has already filed the return, might want to revise it by showing additional turnover and in such a case he must pay into the Government Treasury the extra amount of the tax payable by him according to the revised return before he furnishes such revised return. That sub-section too fixes the liability of the assessee to pay up the extra amount of tax before he furnishes the revised return. These two sub-sections, namely, sub-sections (2) and (3), do not prescribe the time within which the tax is to be paid by the assessee. They merely fix the liability of the assessee and if the assessee does not pay up the amount of the tax according to the return, whether original or revised, sub-section (5) provides for the issue of a notice by the Collector and says that the amount of the tax shall be paid by the assessee into the Government Treasury by such date as may be specified in the notice. The date to be specified in the notice must not be less than thirty days from the date of the service of the notice. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore a registered dealer furnishes the return, he shall pay into the Government Treasury the amount of tax due from him according to the return. This subsection merely declares the liability of the assessee to pay the full amount of tax due according to the return before furnishing the return; it does not prescribe the time within which the amount of tax due according to the return must be paid by the assessee. As a matter of fact it is difficult to see how the prescribed time for payment of the amount of tax due according to the return can be before the filing of the return. It is only on the filing of the return that it is possible to speak of the amount of tax due according to the return and the prescribed time for payment of the amount of tax due according to the return must, therefore, be sometime after the filing of the return and not the date of the filing of the return. It may also be noted that if section 16(2) were construed as prescribing the time within which the amount of tax due according to the return must be paid by the assessee, the "prescribed time" would not be a definite punctum of time prescribed by the Legislature but would be dependent on the assessee in tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the provisions of section 16(2) and section 16(5) but this argument is also without substance and for reasons which we shall presently state, we are unable to accept it. Now in order to understand the true meaning and effect of section 16(5) we will first take a case covered by clause (i)(b) of that subsection where the amount of tax is assessed for any period under section 14 or 15 and is unpaid. The prescribed time for the purpose of section 16(4) in such a case would be clearly the time prescribed under section 16(5). That is now well-settled by the decision of the Bombay High Court in Mohamed Tayoob Daruwala v. The State of Bombay[1960] 11 S.T.C. 612. In that case the assessee contended that by reason of the definition contained in section 2(10), the expression "prescribed" meant prescribed under the rules and since there was no provision in the rules prescribing the time for payment of tax assessed under section 14 or 15, there was no prescribed time within the meaning of section 16(4) and the taxing authorities had, therefore no power to levy penalty for nonpayment or late payment of tax after assessment. A Division Bench of the Bombay High Court consisting of S.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recoverability when default is already made and penalty has started running. It would indeed be a strange scheme which entitles a defaulting assessee, against whom penalty is mounting from day to day, to a minimum of thirty days' time within which to pay up the amount of the tax and even to obtain extension of time and also instalments before any steps can be taken to recover the amount of the tax from him as an arrear of land revenue. Moreover it is difficult to appreciate why an assessee should be made liable to running penalty when he has sufficient reasons for not being able to pay the amount of the tax which would entitle him to extension of time even beyond the period of not less than thirty days given by the notice under section 16, sub-section (5), and also to instalments. The only rational and intelligible way of construing section 16, sub-section (5), is by taking the view that as in the case of the amount of tax assessed under section 14 or 15, so also in the case of the amount of tax due according to the return when the return is furnished without full payment of such amount the Legislature provided that a notice of at least thirty days should be given to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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