TMI Blog1986 (8) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------------------------------------------------- Description of goods Point of levy Rate of tax ------------------------------------------------------------------------------ (1) (2) (3) ------------------------------------------------------------------------------ 3.. Wireless reception instruAt the point of 12 paise in the ments and apparatus, radios and first sale in the rupee. radio gramophones, electrical State. valves, accumulators, amplifiers and loudspeakers and spare parts and accessories thereof (1003). 38.. All electrical goods, insAt the point of 8 paise in the truments, apparatus and appliances first sale in the rupee. including fans and lighting bulbs, State. electrical earthenware and porcelain and all other accessories excluding electric motors. ------------------------------------------------------------------------------ By virtue of amending Act 49 of 1976 entry 38 was recast and entry 137 added. Entry 38 as recast, and entry 137 read as follows: ------------------------------------------------------------------------------ Description of goods Point of levy Rate of tax --------------------------------------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturer was that the method in which the goods are described or advertised, is not decisive in determining the real nature of the goods, and that inasmuch as dry-cells are not meant to be exclusively used in transistor-radios and are actually used for many other purposes, they do not, and cannot fall under entry 3. It was also argued that dry-cells are neither spare parts, nor accessories to transistors or other wireless equipment mentioned in entry 3. After referring to certain decisions and to the dictionary meaning of the word "accessory", the Bench in its judgment dated 5th February, 1976, opined that dry-cell batteries do fall within the meaning of the expression "accessories" to radios in entry 3 of the First Schedule to the Act. Having so held, the Bench proceeded further to consider the submission of the Standing Counsel for the department that a dry-battery cell is also an "accumulator"-an expression used in entry 3. The said contention was dealt with in the following words: "................it is argued that a dry-battery cell undoubtedly falls within the scope of the expression 'accumulator'. The meaning given to the word 'accumulator' in the Concise Oxford Dictionary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is a special entry meant for them, and not under entry 38 (as accessories to torches, other electrical gadgets and appliances), which is in the nature of a general entry. The reasoning of the department, which is disclosed from the judgment of the Deputy Commissioner, dated 8th June, 1978, (concerned in T.R.C. No. 35 of 1983), runs thus: an electrical storage battery is synonymous with accumulator; the Bench decision of this Court in T.R.C. Nos. 18 and 19 of 1973, dated 5th February, 1976, held dry-battery cells also as "accumulators"; if so, dry-cells fall under the special entry 137, and should not be made to fall under other entries on the ground of being accessories to other goods mentioned in those other entries. Indeed, it appears that the department has not been sure of the situation and has been taxing these goods sometimes under entry 137, sometimes under entry 3 and sometimes under entry 38. While it is not necessary to mention the particulars of the several tax revision cases and writ petitions herein, that is in short the controversy. The particulars of the several tax revision cases and writ petitions are set out in the annexures to this judgment. At this juncture, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tters before us), it, manufactures certain cells which are described as meant for transistors. We are not sure whether the cells manufactured by Union Carbide India Ltd., for transistor purposes carry the ISI specification or not. (The one which was produced for our observation at the time of hearing, did not carry any such ISI marking. Mr. K. Srinivasa Murthy, the learned counsel for this manufacturer, submitted that the dry-cells manufactured by Union Carbide are of international standard, which is somewhat higher than the ISI standard, i.e., IS: 2576). Besides the above, M/s. Union Carbide also manufacture certain other dry-cells which are expressly marked as being meant for flash-lights. The two other manufacturers concerned herein, manufacture both multipurpose drycells carrying IS: 8144 marking, and others without any description as such, not carrying any ISI marking. Now, it goes without saying that though the manufacturers describe the use on some of their products, it does not mean that the said cells will be used only for that purpose, and no other. In other words, a dry-cell which is described as being meant for transistors, can also be used in flash-lights, or for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason alone they cannot be taxed under entry 3. Even if it is held that these dry-cells fall under both entry 38 and entry 3, they should be taxed under entry 38, i.e., at a lower rate, following the maxim that in case of an ambiguity or doubt, a taxing statute must be construed in favour of the assessee. Sri A. Venkataramana, the learned Government Pleader for Commercial Taxes, appearing for the department, supported the reasoning of the Deputy Commissioner. He submitted that the decision of a Bench of this Court in T.R.C. Nos. 18 and 19 of 1973 correctly holds that dry-cells are accumulators. He submitted that a cell does not cease to be an accumulator for the reason that it cannot be re-charged. In any event, he brought to our notice an advertisement issued by Raleigh ('Rallis') Company, a reputable concern in this country, advertising a gadget by which these dry-cells can also be re-charged; (this advertisement was issued only recently, i.e., in the year 1986). He submitted that while introducing entry 137, the 1976 Amendment Act simultaneously amended entry 1 excluding the batteries used in motor vehicles, from the said entry. The learned Government Pleader submitted that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c cell which can be charged and discharged. On charge, when an electric current is passed through it into the positive and out of the negative terminals (according to the conventional direction of flow of current), electrical energy is converted into chemical energy. The process is reversed on discharge, the chemical energy, less losses both in potential and current, being converted into useful electrical energy. Accumulators therefore form a useful portable supply of electric power, but have the disadvantages of being heavy and of being at best 70 per cent efficient. More often known as battery, also called reversible cell, secondary cell, storage battery, (Ocean). A spring of rubber or steel attached to a trawling warp, to lessen any sudden strain due to the trawl catching". "Dry Battery" is given the meaning "a battery composed of dry-cells", and the expression "dry-cell" is given the following meaning: "A primary cell in which the contents are in the form of a paste; (See Leclanche cell)." In Encyclopaedia Britannica, Volume 2, the following statement occurs under the sub-heading "dry-cells", which are dealt with under the heading "Primary or Voltaic Batteries"; (the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eries and (2) Electric storage batteries. Dry batteries are manufactured for use in flashlights and for working radio sets, while storage batteries are made for use in cars, buses, trucks, motor-cycles, diesel conveyance, for working radio sets for use as aircraft ground starter and for use in the mine workers' cap lamps. The assessable storage battery parts are (1) container, (2) cover, and (3) plates. In appendix "A" to paragraph 28, it is stated: "A storage battery is nothing more than a device which is used repeatedly for storing energy at one time for use at another time. This energy is stored in a chemical form and is delivered from it in an electrical form. The process of putting energy into a battery is termed 'charging' and when a battery is delivering current, it is termed 'discharging'. The essentials of a storage battery are two unlike plates in a solution. The solution is called 'electrolyte', and acts upon the plates in such a way as to give one of them a tendency to deliver a current of electricity and to the other a tendency to draw in current. The one with the tendency to deliver current is called the 'positive' and the one which has a tendency to draw in cur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actured by the petitioners cannot and do not fall within entry 137 of the First Schedule to the Andhra Pradesh General Sales Tax Act. These dry-cells fall under, and have to be taxed under entry 38 as accessories to torches and other electrical gadgets and appliances mentioned therein. We may repeat that in so far as the dry-cells carrying the description that they are meant for being used in transistors and/or radios, are concerned, they are assessable and have to be taxed under entry 3, being accessories to transistor-radios/radios, as held in T.R.C. Nos. 18 and 19 of 1973. Of course, with the introduction of entry 152, these dry-cells directly fall under the said entry, and need not be taxed as accessories to torches and other electrical gadgets and appliances mentioned in entry 38, or as accessories to radios under entry 3. There is another aspect which needs to be dealt with. The dry-cells manufactured by the petitioners, whether described as "multipurpose" or not, and even where described as meant for being used in flash-lights, can also be used in transistor-radios/radios. Indeed, the very description "multipurpose" specifically means that they can also be used in transist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is well-settled that the words in these entries have to be understood and interpreted as they are understood in commercial parlance, i.e., as a man normally dealing with these goods, would understand them. While construing entry 137 we have not only referred to the scientific/technical/literary meaning, but we have also referred to the Manual issued by the Central Excise Department of the Government of India itself, which treats dry-batteries (dry-cells) and storage batteries as different goods, though falling under the same tariff item. The Central Government publications also make it clear that dry-batteries and storage batteries are entirely different and distinct goods. Similarly, the gadget now said to have been invented by Raleigh Company enabling even the dry-cells to be re-charged, is a very recent event of 1986, and is not relevant for the purpose of these petitions. In any event, once entry 152 is introduced, all dry-cells and dry-batteries fall under the said item, whether re-chargeable or not. For the above reasons, we are of the opinion that the dry-cells manufactured by the petitioners (excepting those which are described as meant for being used in transistor-r ..... 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