TMI Blog1988 (9) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... t 10 per cent as a lock falling under the said entry, which reads as follows: "All kinds of padlocks and locks". A brief legislative history relating to the levy of tax on the sale of cycle locks under the Act is necessary to be stated in order to properly appreciate the petitioners' case and decide the point in controversy. Entry 14 of the Second Schedule to the Act, as was found in the Act right from the inception, as inserted by Act 25 of 1957, read as follows: "14. Bicycles, tandem cycles and cycle combinations." This entry was substituted by Act 31 of 1958, and the substituted entry read as follows: "Bicycles, tandem cycles (cycle combinations and parts and accessories and tyres and tubes thereof)." By Act 9 of 1970, perambulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accessories and tyres and tubes thereof, perambulators, children's bicycles and similar articles." This is the undisputed position as to the law relating to levy of tax on cycle locks till 17th November, 1983 when entry 150 was inserted in the Second Schedule by Act 23 of 1983 when the Commissioner issued the circular bearing No. CLR. C.R. 240/87-88 dated 18th June, 1987 published in the Commercial Tax Bulletin for the quarter ending 31st March, 1987 and 30th June, 1987 as circular No. 2/87-88. This circular was issued by the Commissioner in exercise of his powers under section 3A of the Act for the guidance of the officers of the department and for the information of the assessees. Subsequent to the issue of the circular, the propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference so far as the cycle locks are concerned having regard to the incontrovertible fact that the department itself treated the cycle locks as accessories of cycles. The other argument which is advanced, with some emphasis, is based on the ratio decidendi contained in several decisions on this point. It is argued by the learned Government Pleader for the respondents that cycle locks are properly brought to tax under entry 150 after the said entry was introduced, for the first time, with effect from 18th November, 1983 and the cycle locks satisfy the description of the goods in entry 150, "all kinds of padlocks and locks". It is argued further by the learned Government Pleader that this entry 150 being a specific entry should apply to cy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for other purposes. Sri Gandhi has relied upon the following decisions in support of his contention: 1.. State of Tamil Nadu v. Kannika Cycle Stores [1983] 53 STC 429 (Mad.). Mirrors sold by an assessee, a dealer in cycles and not in glassware, for use as a rear view mirror to be fitted into cycles, were held to be an accessory to cycle and taxable as such. The Madras High Court applied the principle laid down in Yacub Hussain v. State of Tamil Nadu [1980] 46 STC 470 (Mad.), in which it was held that the purpose for which the commodity is used should be a guiding factor to determine its character. 2.. Choudhry Bros. v. State of A.P. [1979] 43 STC 480 (AP). Fare meters fixed in auto-rickshaws and motor vehicles were held to fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly under item 34A, and not tinder item 23A(4). In Annapurna Carbon Industries' case [1976] 37 STC 378, the Supreme Court was interpreting whether arc carbons were classifiable as parts and accessories of cinematographic equipment including projectors, etc. The Supreme Court held, that arc carbon, though can be used for other purposes like signalling, searchlight, etc., having regard to its predominant use as "cinema arc carbons", it was rightly taxed under entry 4 of the First Schedule along with cinematograph equipment such as projectors, etc. The Supreme Court further observed, that the predominant or general use of an article should be the deciding factor. Sri Dattu, the learned Government Pleader has sought to distinguish the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chinery and, therefore, not taxable under item No. 20 of the Second Schedule to the Karnataka Sales Tax Act. Tractor-trailer required for use of a tractor cannot be an accessory to a tractor. The Supreme Court, in Atul Glass Industries' case [1986] 63 STC 322, laid down the test, which is commonly applied in cases where controversy as to classification and levy arises, thus: "How is the product identified by the class or section of people dealing with or using the product? That is a test which is attracted whenever the statute does not contain any definition. It is generally by its functional character that a product is so identified." The Supreme Court held, that glass mirrors cannot be classified "as other glass and glassware" under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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