M/S Eureka Forbes Limited vs State Of Bihar And Ors

M/S EUREKA FORBES LIMITED Appellant(s)

VERSUS

STATE OF BIHAR AND ORS Respondent(s)

O R D E R

1. Leave granted.

2. The present case relates to assessment of the Appellant herein

concerning assessment years 1990-91, 1991-92, 1992-93 and

1993-94.

3. The assessment proceedings were initiated under the Bihar

Finance Act, 1981 read with Bihar Sales Tax Rules, 1983.

Notices under Section 17 (2)(a) of the Act were issued to the

assessee for examination of books of accounts. The said books of

accounts were produced and assessment orders under Section

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17 (2)(b) of the Act were passed. In the said assessment order,

the assessee was levied tax on vacuum cleaner at the rate of 12%

treating it as electrical goods as against the contention of the

Appellant that vacuum cleaner, which is an article dealt with by

the Appellant, is taxable at the rate of 8%.

4. The Assessing Officer by the assessment order rejected the

aforesaid contention of the assessee while holding that the

assessee is liable to pay tax on vacuum cleaner at the rate of

12%. Being aggrieved by the aforesaid findings and assessment

order passed by the Assessing Officer, the Appellant filed appeals

which were entertained and disposed of dismissing the said

appeals.

5. Being aggrieved by the aforesaid order passed in appeals, the

assessee preferred Revision Applications before the Commercial

Taxes Tribunal. By an order passed on 15.4.2004, the Tribunal

dismissed the said Revisions holding that the vacuum cleaner is

an electrical good or instrument and, therefore, it falls within

Entry 81 of the Notification dated 26.12.1977 issued under

Section 12 of the Bihar Finance Act - Bihar Sales Tax Act, 1959.

Page 2 of 8 6. Being aggrieved by the aforesaid order of the Tribunal, a writ

petition was filed, which was again dismissed by the High Court

by judgment and order dated 26.2.2010 as against which this

appeal was filed.

7. We have heard the learned counsel appearing for the parties in

this appeal, who have taken us through the records. In the light

of their submissions and on perusal of the records, we propose to

dispose of this appeal by recording our reasons.

8. The issue that arises for consideration is whether the article

vacuum cleaner could be included within the Entry 81 of the

Notification dated 26.12.1977 issued under Section 12 by the

respondents.

9. Entry 81 of the said notification reads as follows:-

"81. Electrical goods, instrument, apparatus and

appliances including electric fans and lighting bulbs,

electric earthware and porcelain and all other accessories

excluding electric motor, dry cell batteries, torch, torch

bulbs, exhaust fans, air circulators, and spare parts and

accessories, electric heaters of all varieties."

10.Counsel appearing for the Appellant has submitted before us

that particular article, namely, vacuum cleaner, which is the

article dealt with by the appellant in the course of its business

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cannot be included within the ambit and scope of Entry 81 in

view of the fact that the said article is not mentioned specifically

within the aforesaid Entry. In order to reinforce his arguments,

Mr. S.B. Sanyal, learned senior counsel also relied upon the

subsequent Notification which is issued by the respondents on

26.7.2000. He has drawn our attention to the contents of the

said Notification and particularly to serial no. 247 where vacuum

cleaner is specifically mentioned with the rate of sales tax

payable @ 12%. It is submitted by him that since in the

subsequent Notification in 2000, vacuum cleaner has been

specifically stated under serial no. 247 specifying the rate of

sales tax at 12%, it should be assumed that the aforesaid

vacuum cleaner having not been specifically mentioned in the

earlier Notification under Entry 81, would be liable for the

purpose of tax at 8% being an unspecified good. We have

considered the said submissions in the light of the records. The

Entry 81, which we have extracted above, provides that electrical

goods, instruments, apparatus and appliances would have to be

levied 12% tax effective from 1.4.1982. However, when it states

of electrical goods, the same appears to us to be an inclusive

description as it emphasises on the word `including electrical

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fans and lighting bulbs, etc.' and again it excludes from its

purview electric motor, dry cell batteries, etc.

11.A reference to Section 12 of the Act would also make the position

clear for Section 12 says in the proviso that the State

Government can issue a notification fixing higher rate than eight

percentum by specifying such goods or class of goods or

description of goods. Therefore, by issuing a notification under

Section 12, a higher rate than of 8% could be levied by the State

Government on a class of articles of goods or goods specifically

mentioned therein. The aforesaid position would be more explicit

when we look to the Entries 116 and 127 of the same Notification

of 1977 wherein by the Entry 116, articles like refrigerators, air-

conditioners, air-coolers and air-conditioning plants, etc. have

been taken out from the items "electrical goods" under Entry 81

by levying higher rate of tax.

12.That the vacuum cleaner dealt with by the appellant is an

electrical good, there is no dispute raised for in the Special Leave

Petition itself it is stated by the Appellant that the vacuum

cleaner is a machinery which is run by electricity. Therefore, it is

an agreed and uniform case of the parties that vacuum cleaner is

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an electrical good. The said vacuum cleaner is not excluded from

the purview and ambit of Entry 81 in any manner as is apparent

from a bare reading of the contents of Entry 81.

13.We are concerned with the assessment years prior to 2000 and,

therefore, the Notification issued on 26.7.2000 shall have no

relevance or application to the facts of the present case.

14.Counsel appearing for the Appellant has submitted that since

vacuum cleaner is not specifically included within the Entry 81,

therefore, it should be deemed to be excluded. We are unable to

accept the aforesaid contention in view of the fact that none of

any electrical goods, instruments, apparatus, which is included

in the said Entry is specifically mentioned and if that

interpretation is accepted, all electrical goods would have to be

excluded because they are not specifically mentioned therein.

That could not be the intention of the framers of the Notification

while exercising the powers under the subordinate legislation. If

we also accept such an interpretation, in our opinion, entire

Entry 81 would be rendered otiose.

15.Learned counsel also relied upon a decision of this Court in The

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Federation of Andhra Pradesh Chambers of Commerce &

Industry and Ors. Etc. Etc. v. State of Andhra Pradesh and Ors.

Etc. Etc. reported in (2000) 6 SCC 550, wherein it is laid down in

para 7 that taxing statutes are to be strictly construed and that

nothing could be added to what is stated in the statute itself. We

agree and accept the aforesaid principles of law laid down by this

Court. That is a settled position of law, but according to us, the

said decision in no way helps the Appellant in view of the

reasoning given by us for the findings arrived at by us. So far the

decision of the Division Bench of the Patna High Court in Eureka

Forbes Ltd. v. State of Bihar and Ors. reported in 2000 (119) STC

460 (Pat.) is concerned, the same is also not applicable to the

facts of the present case as the same relates to a case of re-

opening of assessment on the ground of change of opinion and

therefore, the said case also has no application at all. The

decision of the Bombay High Court in Indian National

Shipowners' Association, a Company having its registered office

through its Deputy Secretary and Mr. Badrinath Durvasula

having his place of business v. Union of India (UOI) through

Secretary, Dept. of Revenue, Ministry of Finance Govt. of India

and Ors. reported in 2009 (14) STR 289 (Bom.) also has no

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application to the facts of the present case.

16.We have given our reasons for arriving at our findings and in our

considered opinion, the decisions given by the High Court as also

by all other authorities are correct decisions, recording cogent

reasons, and, therefore, we are not inclined to interfere with the

same.

17.The appeal has no merits and is dismissed accordingly but

leaving the parties to bear their own costs.

............................................J.

(Dr. MUKUNDAKAM SHARMA)

............................................J.

(ANIL R. DAVE)

New Delhi

27th July, 2011.

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