The State of Andhra Pradesh v. tvl/s. Bharat Heavy Electricals Limited

Counsel for the Respondent: SRI G. NARENDRA CHETTY T.R.C-No- 41 of 2OO5:. (Petition under Section 22(1) READ WITH Rule 10 of APGST Rules U/s APGST ACT to revise the Order dt 31-03-2004 passed in TA No. 1006 of 2000 on the file of the Sales Tax Appellate Tribunal, A.P. Hyderabad, preferred against the Order of the Joint Commissioner (CT), ( Legal ) office of the Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad dated 21-08-2000 in CCTs Ref. L.lll (l)l 5311 2000 (AP) preferred against the Commercial Tax Officer, Sangareddy in Assessment No. 12032193-94 Dated 16-08-1996 Between The State of Andhra Pradesh, Rep. by the State Representalive before STAT., D.No. 5-4-404 to 408, Nampally, Andhra Pradesh, Hyderabad. AND fvl/s. Bharat Heavy Electricals Limited, Ramachandrapuram, Hyderabad. ...PETITIONER ...RESPONDENT Counsel for the Petitioner: SRl. SWAROOP OORILLA ( SPL SC FOR CT) Counsel for the Respondent: SRI G. NARENDRA CHETTY The Court made the following COMMON ORDER : TTTE HONOI]RABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDTKONDA T.R.C.Nos.39. 40 & 41 of 2005 COMMONJUDGMENT (Per Hon'hle Sri Justice P.Sam Koshy) Heard Mr. Swaroop Oorilla, learned Special Standing Counsel for the State Tax for the petitioner and Mr. G. Narendra Chetty, learned counsel for the respondents. Perused the record.

2. These tax revision cases are filed by the State under Section 22 of the Andhra Pradesh Generai Sales Tax Act, 1957 (for short 'the Act') chalienging the common orders dated 31 .03.2004 passed by the Sales Tax Appellate Tribunal, Andhra Pradesh, I{yderabad (for shorl, 'the Tribunal') in T.A.Nos.556 of 2000, 1006 of2000 and497 of200l

3. Vide the said impugned order, the learned Tribunal has set aside the orders of the Joint Commissioner (CT) (Legal), dated 1 1.04.2000, 21.08.2000 and 24.02.2001 relating to the assessment years 1992-93,1993-94 and 1995-96 respectively. "l \ i I I i I i I I I 2

4. T.A.No.556 of 2000 was an appeal directed against the order dated 11.04.2000. Likewise, T.A.No.1066 of 2000 was an appeal directed against the order dated 21.08.2000 and lastly T.A.No.497 of 2001 rvas an appeal directed against the orderdated 24.02.2001 .

5. The points for consideration which came befbrr: the learned Tribunal rverre (1) Whether the freight and insurance charges incurred by the appellant in the despatch of goods to the placc of the customer could be dsducted from the taxable tumover for the purposc of APCST Act? The disputed tumover for the year l!)92-93 is Rs.84,90,850 and for the year 1993-94, it is Rs.l7.4-1,034. (2) Whethcr the disputed items of goods namely turbo-generators whjch in cornbination with other equipments like turbines, electrical machinery, switch gears, bowl milt, heat exchangers, heat machinery, pumps, gil rigs, oil rigs and switch gear equipment including spares ofthese items revised b1' the Joint Commissioner (CT), Legal are not "Elcctrical gt,ods" covcrcd by Entry 38 of I"t Schedule and are only "machinery" falling under Entry 83 of I"t Schedule to the APGST Act. The tumovers disputed under this head for the year 1992-93,1993-94 and 1995-96 under APGST Act are Rs.-]1,78,10,851, Rs.8,99,66,578 and Rs.33,10,84,054 respectively and; (3) Whether the revised orders passed by the Joint Commissioner (UT). Lcgal fbr the assessment year 1992-93, 1993-94 and I 995-96 under APGST Act are sustainable in larv?

6. The learned Tribunal took up the matter in a Bench consisting of Chairman and 2 Members. The Chairman and Accountant Member gave majority view holding thdl &e view I t 3 passed by the Assessing Officer and the Revisional Authority setting aside the order passed by the Assessing Officer- Commissioner to be bad in law and held that the goods namely turbo-generators and other equipments like tuibines' electrical machinery, switch gears, bowl mill, heat exchangers' heat machinery, pumps, gil rigs, oil rigs and switch gear equipment' etc are not electronic goods covered under Entry 38 of the I Schedule of the Act, but are mechanical goods (machinery) falling under Entry 83 olthe I Schedute ofthe Act'

7. For ready reference and for easy understanding of the issue' the two disputed entries under the I Schedule of the Act are being reproduced herein under: F-, NTRY NO.38: Entry Description of goods Point oflevy Rate oftax Fffective 10 paise in 1.8.86 to the rupce 31.3.95 38 (Alt kinds of electrical goods' At the point instruments, apparatus and offirst sale in appliances other than articles the State of ptastic and those sPecificallY mentioned elsewhere including); (i) wires, holders, Plugs, switches, electrical earthenware and porcelain ware; (ii) casings, cappings, repears, bends' j unction boxes, meter-boxes, 4 switch-boxes. meter-boards and sr.r,irch-boards; (iii) electrical fans, lighting bulbs torchcs. fluorescent tubes and other than fittings, like chokers and sta ers and other parts and accessories thereof; (iv) electrical grinders, mixers, blenders hair-driers, shavers, washing machines, heaters. cooking ranges, boilers, ovens. geysers, generators, transformers and othcr parts and accessories thereof; All kinds olelectrical goods, At every point Instrunlenls, apparatus and offirst sale in appliances other than articles the State of plastic and those specifically menlioncd elsewhere, including; (600e) (i) wircs. holders. plugs. swilches. eleclrical carthenware and porcelain ware; (ii) casings. cappings. reapers, bcnds, junction boxes, meter-boxes. switch hoxes, meter-boards and switch hoards; (iii) electrical fans, lighting bulbs torches. fluoresccnt tubes and other fittings. Iike chokes and starters and other parts and accessories thereof; (iv) electrical grinders, including wet grinders. mixers, blenders, hair driers, shavers. washing machines, heaters, cooking ranges, boilers, ovens, geysers. generators, transformers and pans and accessories thereof; 16 paise in 1.4.95 the rupee ENTRY N0.It3: Entry Description ofgoods Point oflevy Rate of tax Effective 83 All kinds of machinery, propolled or operated by At the point of first sale in 6 paise in the rupee

8.7.1993 1 .4.t995 5 the State (i) elecxicity (ii) diesel, (iii) pctrol, (iv) fumace oil, (v) kerosene, (vi) coal including charcoal, or (vii) any other fuel or power, including spare parts and aocessories of such machinery other than those specifically mentioned elsewhere (1 083).

8. Learned Special Govemment Pleader for State Tax contended that generators etc and other electlonic equipments have been specifically mentioned and reflected in Entry 38 Class IV and therefbre, the majority view of the lribunal does not seem to be proper, legal and justified, particularly when we read the contents of Entry 83, which specifically provides for only those equipments and machineries which are not speciflcally mentioned elsewhere.

9. According to the learned Special Government Pleader, since generators are all specifically mentioned in Entry 38 Class IV, it cannot under any circumstances be brought under Entry 83 and therefore, the majority viev/ expressed should not be accepted and the impugned order therefore, to the aforesaid extent deserves to be interfered with. \ i I l i i i I I l I I l 6

10. However, upon due consideration of the majority view expressed by the Chairman and the Accountant Mernber, what clearly reflects is that the Tribunal had thread bear looked into the various items u4rich the Revenue wanted it to ba brought under the purview of llntry 38 and thereafter have gone into the classification of goods and the contents of the two ciassified entries under I Schedule i.e., Ilntry 38 and Entry 83. I l. To ascertain as to under which entry would these products fall, the tr.r,o Members had relied upon the series of judicial precedents of similar nature from various High Court s and under similar provision of law. In the process, the majority took the view of the generators and products which are otherwise retlected in Entry 3 8 to be those items which are otherwise used for domcstrc purposes and cannot be compared rvith heavy machineries and generators used in lactories and industrial establishments and thus, reached to the said conciusion. So far as the other qrrestion of law i.e.. whether the freight and insurance charges incurred by the appellant in the despatch ofgoods could be I t 7 detected from the taxable tumover, the Tribunal unanimously remanded the said issue to be reconsidered by the CTO.

12. Upon due consideration of the entire facts and circumstances of the case, particularly, taking into consideration of the majority view of the Tribunal, we are of the considered opinion that the view expressed by the majority view of the Tribunal so far as classification of goods is concemed, does not warrant any interference nor can it be said to be in any manner unreasonable or emoneous finding of fact and so far as the issue of freight and insurance charges is concemed, this Bench is of the considered view that the said finding also does not warrant any interference and the tax revision cases filed by the State therefore fails and deserves to be rejected. It is ordered accordingly.

13. However, considering the fact that the matters which have ,I I been remanded by the Tribunal way back in2004 are still pending consideration only because of the pendency of these tax revision cases, we deem it fit to observe that now these tax revision cases stands rejected. It is expected that the Authority concemed shall t I \ t I 8 take up these lnatters on priority basis for expeditious conclusion of the proceedings strictly in accordance with law.

14. Accordingly, all the tax revision cases are disposed of. There shall be no order as to costs. Consequently, miscellaneous petitions pending., ilany, shall stand closed. //TRUE COPY// SD/- K. SRINIVASA RAO JOINT REGISTRAR SECTI ON OF FICER To t The Sales Tax Appellate Tribunal, A.p. Hyderabad, 2. The Commissioner of Commercial Taxes, Andhra pradesh, Hyderabad

3. The Joint Commissioner (CT), _( Legal ) office of the Commissioner of commerciar Taxes, Rnbnr; dr;J;;hlivo?aoao 4 The Commercial Tax Officer, Sangareddy 5. One CC to Sri Saroop Oorilla, Special SC for Commercial Taxes (OpUC) 6. One CC to SRt. G NARENDRA CHETTy Advocate [OpUC] 7. Two CD Copies kul/gh \r I / HIGH COURT DATED:03/03/2025 I I (,OMMON .IT]DGN{I,]NT T.R.C. N os. 39 40& 41 0F 2005 lrrE Sf4 I t- /^\ 3, Zl ilAy zoz5 (.( I C cs rr^T c dfO DISPOSING OF I'FIL ,\I,I- TAX REVISION (]ASES WITHOUT COSTS {