TMI Blog1984 (12) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the Bombay Sales Tax Act, 1959: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that kirloskar refrigeration compressor model K 60 x 110 manufactured and sold by the applicant under invoice dated 15th October, 1974, is covered by entry 47 of Schedule C to the Bombay Sales Tax Act, 1959?" 2.. The invoice in question is in respect of a kirloskar refrigeration compressor model K 60 x 110 manufactured and sold by the assessees. In respect of this compressor the assessees had produced before the authorities the relevant literature and technical information as also figures relating to sales. According to the assessees, the compressor in question is mainly used in refrigeration plants or systems. It is occasionally used in air-conditioning plants or systems also. The compressor is not designed for being used in a refrigerator nor can it be used in an air-conditioner. It is designed for use in a refrigeration plant or a refrigeration system, which may be set up for obtaining and maintaining a very low level of temperature either in a cold room for storage and preservation of goods or for removal of process heat in certain manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of a total of 29 compressors which were sold, only 4 were sold for use in an air-conditioning plant. The rest were sold for use in a refrigeration plant. If the figures for 5 years were to be taken into account starting from the year 1972-73 and ending with the year 1976-77, a total of 101 such compressors were sold by the assessees out of which only 25 were used in an air-conditioning plant. The assessees thus contended that the primary use of the compressor in question was in a refrigeration plant. It was only occasionally used in an air-conditioning plant. Hence, the compressor in question should be classified on the basis of its primary use. It could not, therefore, be treated as a component or part of an air-conditioning plant. The department, on the other hand, did not challenge the factual basis of the submission made by the assessees. The department accepted the contention that the compressor was primarily used in a refrigeration plant. The department, however, submitted that the compressor could be used in an air-conditioning plant and hence it could be classified under entry 47(b) of Schedule C to the said Act. This contention of the department was accepted by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... archlights, signalling, stage lighting and for powerful lighting for photography or for other purposes could not detract from the classification. 6.. In this connection a reference may also be made to a decision of the Bombay High Court in the case of Commissioner of Sales Tax v. Jayanand Khira Co. Pvt. Ltd., reported in [1975] 36 STC 242. In that case the question related to the classification of an oil-tank sold by the respondent for the purpose of being fitted on the chassis of a motor vehicle. The relevant entry in that case was entry 58 of Schedule C to the Bombay Sales Tax Act, 1959 as it stood at the relevant time. It dealt with (inter alia) components and spare parts of motor vehicles. The Court held that, "in order to determine whether a particular article is a component part of another article, the correct test would be to look both at the article which is said to be the component part and the completed article and then come to the conclusion whether the first article is a component part of the whole or not. If one were to look at a complete and finished product, one might find so many parts which, by being fixed or otherwise made part of the said product, would lead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to in that case were to be considered as accessories of refrigerators or air-conditioners or electrical goods. The Gujarat High Court held that sales of these autovolters for use as accessories to refrigerators would be covered by entry 76 while sales of autovolters which were sold for use with an air-conditioner would be covered by entry 69 of the said Act. If they were sold neither for use with a refrigerator nor with an airconditioner, they would be classified as electrical goods covered by entry 41. With respect to the Gujarat High Court, we are unable to agree with this decision of the Gujarat High Court. The classification of any goods cannot vary with the use to which the article would be put by the purchaser. If the logic of the judgment of the Gujarat High Court were to be applied, then, in respect of the same goods sold by the same dealer to different purchasers, the same goods will be classified differently and may attract different rates of tax depending upon how the purchaser uses the article. In our view, this would be an untenable position under the Sales Tax Act. In the first place, every seller would be required to make elaborate enquiries from the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rimary use as a part of refrigeration system. However, it had also been used as a part of an air-conditioning plant. The primary use as part of a refrigeration system, could not however lead to the position that the article in question which had been used as a part of an air-conditioning plant, could not fall within the entry C-47." Mr. Jetly emphasised the words "may have primary use". He submitted that there was no finding of fact involved here. In our view, the entire paragraph in question which we have reproduced earlier from the Tribunal's judgment must be read as a whole. In effect the Tribunal has said that although a refrigeration compressor is primarily used as a part of a refrigeration system it is also used as a part of an air-conditioning plant. The Tribunal has gone on to observe that its primary use as a part of a refrigeration system cannot take the compressor out of entry 47 of Schedule C. The words "may have primary use" do not render the finding given by the Tribunal hypothetical or problematic. In our view, findings of fact are often given in this manner by the Tribunal. The Tribunal has accepted that the refrigeration compressor is primarily used as a part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e compressors are taken out of entry 47 because they are not parts of a moveable air-conditioning plant. Even otherwise, we do not find much substance in the argument. Because one has to look to the plain language of the entry in order to decide whether an item falls within that entry or not. The components or parts of an air-conditioning plant are clearly included in entry 47 of Schedule C. If certain types of air-conditioning plants are considered as immovable property, they will not be exigible to tax under the Bombay Sales Tax Act, 1959. Their exclusion will not be on account of their not falling within entry 47 of Schedule C. It will be on account of the fact that they are not "goods", and therefore, not taxable under a legislation concerning sale of goods. Components or parts of such plants are certainly goods and hence exigible to tax. They would fall under entry 47 of Schedule C since they are covered by the description in the entry. In the absence of any relevant finding, however, and in view of the decision that we have come to earlier, it is not necessary to decide this aspect of the matter. 15.. In the premises, the question referred to us is answered in the negative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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