The State of Andhra Pradesh v. M/s. Bharat Heavy Electrical Limited

Counsel for the Respondent: Sri G. Narendra Chetty The Court delivered the following: JUDGMENT TH]' HON'BLE SRI JUSTICE T. VINOD KUMAR AND THE HON'BLE SMT. JUSTTCE P. SREE SUDHA TRC. No.34 of2004 JUDCMENI: (per llon'ble Sri Justice T. Vinotl Kumar) This 'lax Revision Case is directed against the order. of the Sales Tax Appellate Tribunal (for short ,the Tribunal) dated I 3.08.2003 vicle 'I'ax Appeal bearing T.A. No.6 t 7 of l !)9g.

2. 'fhe R-cvision petitioner herein is the State wlLich rvas the respondent bcfore the Tribunal. .fhe Assessment year. involved is I 990-91 under the APGST Act. 1 957

3. Eleard learned Special Standing Counsel appearirrg on behall of thc revision petitioner./State and the leamed Counsr:l appearing on behalf of the respondent/assessee.

4. The case of the revision petitioner/State is that the respondent/assessee sold ceftain goods like turbines of varl0us capacrttes, purnps, electrical rnachinery, bowl mills, switchgear equlpments, heat exchangers, compressors and its spares and I l r I i : I I 1l .t 2 claimed the said goods as mechanical goods liable to tax at 6oh, but in fact are electrical goods which are liable to tax at 1002

5. The revision petitioner/State contended that the Assessing Authority though initially proposed to levy tax on the aforesaid sales of the respondent/assessee to tax at 10%o, however, by considering the objections ol the rcspondent/assessee had levied tax at the raLe of 60/o treating the turnover relating to the aforesaid goods as mechanical goods

6. The revision petitioner further contended that the Deputy Commissioner noticing that the order of Assessing Authority in subjecting the aforesaid goods to tax by tleating the same as mechanicai goods and the said order being prejudicial to the interests of revenue, resulting in short ler.y of tax, in exercise of revisional powers confered under Section 20(2) of the Act had revised the order of assessment by treating the goods sotd by thc respondent/assessee as electrical items liable to tax at higher rate as falling under Entry 38 to I Schedule of the Act

7. The levision petitioner/State contends that on the Deputy t i Commissioner passing the order revising the order of assessment, the responrlent/assessee had hled Appeal before the -I'ribunal the Tribunal consisting of tll.ee members by major ty. opinion of 2: I had all,:wcd tl.re Appeal of the respondent/assessec by holding that turbinr:s of various capacities, pumps, electric rl machinery, bowt mills, srvitchgear equipments etc., are not elt:ctrical goods falling und,:r Entry 38 of the I Schedule of the Act rLs held by the revisional authority and, in tact, would have to te treated as machinery ['alling under Entry 83 of the I Schedule to the ApGST Act

8. On b,:hallof the revision petitioner/State, it is contended that the accounr-ant member however had opined that since the said goods functior.r only with electrical energy, the same r.reed to be classif,red a:i electrical goods.

9. Learned Special Standing Counsel contends thar since the turbines are, used for generating electricity, the same need to be classified as electrical goods and that the majority view of the Tribunal is incorrect. 4

10. It is also contended on behalf ofthe revision petitioner/State that the goods viz., generators, turbines, turbo generators are only intended for the purpose of generating electricity and as such would have to be considered as electrical goods.

11. Per contra, leamed Counsel appearing on behalf of the respondent would contend that Entry 38 of I Schedule to the Act deals with all kinds of goods, instruments, apparatus and appliances which are household articles and would not cover machinery which is propelled by electricity, diesel, petrol, fumaoe oil, kerosene etc.

12. On behalf of the respondent, it is contended that no turbine or turbo generator can be considered as electrir:al goods having regard to other items which are rnentioned under the said Entry by applying the principle of NOSCITOR --O- SOCil.

13. On behalf of the respondent, it is also contended that the Tribunal had dealt with the issue in detail in its order and thus, the order of the Tribunal does not give rise for any question of law. t4. We have taken note of the aforesaid submissions. @ry t _ -';;;:..:; i. 5

15. 1.hough the revision petitioner/State had conte.rded that the goods sold 1:y thc respondent/assessee as being liable to tax falling undcr Entry 38 of I Schedule of the Act as noted her,:inabove, the said lrntry deals in all kinds of electrical goods, insrrurnents, apparatus and appliances mentioned therein

16. A rea.ding of the heading of the said Entry itr;elfl indicates that the go,cds mentioned therein are finished goocls which are intended to le put to Lrse on being bought. 11 . On the other hand the goods sold by the petitioner being turbines, turbo generators, bowl mills etc., cannot be <:onsidered as finished goc,ds u,hich are purchased and put to use.

18. On the other hand they are used for generating electricity be it a turbine which is used in a gas fired power gerrer.ating unit, turbine used for generating electricity through wind or hydal. The turbines are also used to propel an aircraft. Thus, if tlie contention of the revision petitioner/State that such goods are to be treated as electrical is accepted, the same would make an air,lraft also an electrical item. 6 .:;iitiirrt

19. The Tribunal by considering the submissions made by the revlslon petitioner/State as well as respondent/assessee, by its detailed analysis had held that the goods sold by the respondent/assessee are rightly classifiable under Entry 83 of thc I Schedule of the Act. 20 It may not be out of place to mention here that the said goods sotd by the respondent/assessee on being manufactured are cleared under Chapter 84 of the Central Excise Tarifl Act dealing with machineries and mechanical appliances

21. The Tribunal having made a detailed analysis on the basis of working of each of the items sold by the petitioner, this Courl is of the view that the said reasoning of the Tribunal cannot be said as either eroneous or perverse giving rise to a question of law fbr the revision petitioner/State to approach this Courl by the present revision petition.

22. Accordingly, this Court is of the view that the Tax Revision Case as filed is devoid of merit and is dismissed. No order as to ,: -,4':Effii-s:!!'s':5/ . "- .slF:qi - " .); - .. :t? l. ,.. .., t / 1 i - ,r'l, As a scquel, miscellaneous petitions pending if any shall stand closerl. No order as to costs. sd/-K s$+xHis[lR / //TRUE COPY/' Fv- SECTION OFFICER To, 1 . The Sales Tax Appellant Tribunal' Andhra Pradesh' H yderabad 2. The Deputy Commissioner (CT)' Hyderabad Division' Hyderabad 3. The Commercial Tax Officer' Sangareddy Circle' SanSareddy 4 Two CCs to Spe-qial GP for Taxes' High Court for tl-re State of Telangana at 5. One CC to Sri G Narendra Chetty' Advocate [OPUC' 6. Two CD CoPies HYderab'ad IOU ll VH/PSI-(t- '7 HIGH COURT DATED: 2810512025 !r: . ,. r-U -.(1, o ', I 11SEP2ffi I i -, --/ .. ) ,'r' --"_,.,-'r)/ .ir-' " -\....-.-.-=-:--7 JUDGMENT TRC.No.34 of 2004 \- DISMISSING THE TRC q.4&n- *n"