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2016 (3) TMI 330 - SUPREME COURT

2016 (3) TMI 330 - SUPREME COURT - 2016 (334) E.L.T. 4 (SC) - Classification of goods - sale of electronic goods (survey instruments) - rate of sales tax 3% or 16% - Held that:- Part-B of the Schedule covers various kinds of goods such as agricultural products, vegetable oils, kerosene, aluminium domestic utensils, raw wool, hosiery goods, gold and silver articles, cycles, tractors, different electronic items, television sets, gramophones, all chargeable at the rate of 3%. In this background, En .....

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teleprinters, tabulating, calculating machines and duplicating machines etc. In all these four entries there is a specific exclusion of electronic variety of these machines - the conclusion is obvious that even electronic survey instruments are covered by Entry No. 14 in Part-F of the First Schedule of the Act. - Decided in favor of revenue.

Levy of penalty - Section 12 of Tamil Nadu General Sales Tax Act, 1959 - Held that:- the return submitted by the appellant was on account of bona .....

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cise of discretion to hold the appellant guilty of submitting incorrect return so as to attract penalty for the same. Hence, in the peculiar facts of the case and in the interest of justice, we set aside the balance dues of penalty. - However, the penalty already paid by the appellant shall not be refunded and the same may be retained by the respondent authorities by way of cost of this protracted litigation. - Decided partly in favor of assessee. - Civil Appeal No. 10554 of 2010, C. A. Nos. 105 .....

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ty and thereby upheld order of Sales Tax Appellate Tribunal which arose out of orders under Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as the Act ) passed by the original authority as well as appellate authority, all against the appellant. 2. For both the assessment years the dispute is confined to an issue of law relating to classification of the goods sold by the appellant. According to the appellant it is engaged in the sale of electronic goods (survey instruments) import .....

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the Appellate Commissioner. On being unsuccessful, the appellant preferred further appeal before the Tribunal and then the matter reached the High Court leading to the impugned order under appeal. The two relevant entries, i.e., Entry 50 of Part B and Entry 14 of Part F of Schedule I are as follows: Part B Sl. No. Description of Goods Point of levy Rate of tax 50 Electronic systems, instruments, apparatus, appliances and other electronic goods (other than those specified elsewhere in the Schedul .....

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asses, diffraction apparatus and mountings therefor including theodolite, survey instruments and optical lenses parts and accessories thereof At the point of first sale in the State 16% 3. There is no difficulty in accepting the consistent finding of the authorities based upon appellant s own declaration in respect of goods which were imported and declared before the customs authorities as survey instruments, that the goods are covered by the generic expression survey instruments . The main cont .....

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We have heard learned counsel appearing for the parties at length. In order to persuade us to take a different view than that of the High Court and the Authorities, learned counsel for the appellant reiterated the submissions advanced before the High Court and further highlighted some entries in Part - B of Schedule I such as Entries 38 to 42 and pointed out that these entries, all providing for rate of tax at 3% use the word electronic in all the entries before various machines such as duplica .....

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would be no rationale for using the word electronic to qualify duplicating machines, teleprinters etc. covered by Entries 38 to 42. The submission lacks merits. Part-B of the Schedule covers various kinds of goods such as agricultural products, vegetable oils, kerosene, aluminium domestic utensils, raw wool, hosiery goods, gold and silver articles, cycles, tractors, different electronic items, television sets, gramophones, all chargeable at the rate of 3%. In this background, Entry 50 of Part-B .....

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ulating, calculating machines and duplicating machines etc. In all these four entries there is a specific exclusion of electronic variety of these machines. On the other hand in relevant Entry no. 14 such exclusion of electronic variety of any of the machines and apparatus such as survey instruments is conspicuously missing. Clearly the intended effect is deliberate so as to include binoculars, monoculars, survey instruments etc. of all varieties, be they manual or electronic. Had the intention .....

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s judgment has been elaborately discussed by the High Court and held to be not applicable to the facts of this case. We have also considered the facts and law involved in the said judgment and we agree with the conclusion of the High Court. In that case the dispute under the Andhra Pradesh General Sales Tax Act, 1957 was on the interpretation of definition of the term Electronic Goods . On the basis of the definition it was held that the goods automatic washing machine was covered by the term el .....

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sideration in the light of submissions to the effect that appellant has been in same business since 1985 and no controversy or dispute of this nature ever arose except for the two assessment years under consideration. It has been pointed out that all earlier Schedules were re-written on account of extensive amendments in the year 1993 and since most of the electronic items were brought under Part-B, a genuine controversy or misunderstanding arose as to whether the goods in question would be cove .....

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alty. Hence, it has been submitted that in the interest of justice the balance penalty be set aside on account of bona fide belief on the part of the appellant that it was liable to pay only at the rate of 3% and therefore there was absolute lack of any mens rea in not paying in time the tax assessed by the authorities. It was also pointed out that against the total tax demand of ₹ 16.39 lakhs approximately the appellant has by now paid about ₹ 16.18 lakhs. 7. Learned counsel for the .....

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e to perform a statutory obligation. In such a situation the discretion has to be exercised judicially after consideration of all the relevant circumstances. Even if minimum penalty is prescribed, the authority may be justified in refusing to impose any penalty in some peculiar situations, such as, where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the Statute. In Sanjiv Fabrics it was reiterated that there is a rebuttable presumptio .....

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he dealer has acted deliberately in defiance of law and is guilty of contumacious or dishonest conduct. 8. In the present case penalty is imposable by the assessing authority under Section 12 of the Act, both, for failure to submit return or for submission of incorrect or incomplete return. Appellant, in the eyes of the Authorities has submitted incorrect return leading to imposition of penalty in accordance with relevant clauses of Section 12. Considering that the situation of dispute arose on .....

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