Delhi High Court

M/S Balaji Enterprises vs The Commissioner Of Income Of ... on 18 October, 2010

Author: A.K.Sikri

*                 IN THE HIGH COURT OF DELHI AT NEW DELHI

                        {ST. APPEAL NO. 09 of 2009}

     %                            Judgment Delivered On: October 18,2010


M/S BALAJI ENTERPRISES                                   . . . APPELLANT
                  Through:                    Mr. Balram Sangal, Advocate.


                                  VERSUS


THE COMMISSIONER OF INCOME                              . . .RESPONDENT
OF VALUE ADDED TAX

                             Through:         Mr. Rajesh Mahna, Advocate.

CORAM:-

          THE HON'BLE MR. JUSTICE A.K. SIKRI
          THE HON'BLE MR. JUSTICE SURESH KAIT

          1.      Whether Reporters of Local newspapers may be allowed
                  to see the Judgment?
          2.      To be referred to the Reporter or not?
          3.      Whether the Judgment should be reported in the Digest?


A.K. SIKRI, J. (ORAL)

1. The appellant is the manufacturer of chair handles (arm rest),

seats and back of chair made of foam. It moved an application

before the Commissioner, Value Added Tax, for determination of the

following question:-

"Whether chair handles (arm rest), seat and back of chair made of foam are covered by entry No. 166 of Schedule III and thus liable to be taxed @ 4%?"

It is clear from the above that the endeavour of the appellant

was to bring the aforesaid items within the scope of Entry at Sl. No.

166 of Schedule III of the Delhi Value Added Tax Act, 2004

(hereinafter referred to as the Act). This Entry at Sl. No. 166 of the

Act reads as under:-

"166. Fittings for doors, window and furniture including

(1)Hinges-butt, piano, narrow, tee, parliament, handles for locks, furniture knobs, drawer channel, furniture fitting, furniture hinges, furniture catchers, (2)Nails, screws, nuts and bolts, revets, cotter pins staples, panel pins, blue cut taks, hob nails, stars, studs, iron heels, bullock and horse shoes and nails (3)Chains of all kinds, (4)All kinds of metal section, including slotted angles, shelves and accessories, (5)Rods, rails, channels and curtain fittings, (6)Tower bolts, handles, aldrops, window stay, gate hook, door stopper, brackets, card clamp, clips, corners, washers, eyelets, hooks and eyes, hangers, hasps, pegs, pelmet fittings, sliding suspenders, springs, magic eyes, trolley wheels, pulleys and holdfasts, (7)Wire brushes."

2. The Commissioner passed the orders dated 17th April, 2007

opining that the aforesaid items would not be covered by the Entry

at Sl. No. 166. The appellant challenged this order by filing appeal

before the Appellate Tribunal, VAT. The Appellate Tribunal has

confirmed the orders of the Commissioner, VAT. Mr. Sangal, learned

counsel appearing for the appellant, submits that the items

manufactured by the appellant would fall within the ambit of the

term „fitting for the furniture‟. To support his submission, he relies

upon the dictionary meaning of word „fitting‟ as contained in the

following dictionaries:-

"(i)New Webster Dictionary : A standardize fixture or part, furnishing or fixtures.

(ii)Law Lexicon : Anything used in fitting, necessary fixture, apparatus, anything supplied as a part, equipment etc., fixtures etc.

(iii)Webster's Encylopedia : Anything provided as equipment, parts, supply etc.usually fittings, furniture, fixture etc."

3. Predicated on the above, his submission was that even a part

of a particular item would amount to fitting. In the present case, he

argued that the back-rest or the seats are essential parts of the

Chair and, therefore, it would be part of the chair and thus has to be

treated as fitting for the chair. He further submits that the word

„including‟ appearing in Entry 166 would only show that the

definition is inclusive and not exhaustive and, therefore, the

various fittings which are specifically enumerated in Clause (1) to (7)

of Entry 166 are only given by way of example.

4. The Tribunal in his impugned order has inter alia held that the

plain reading of entry would mean that items for fittings for doors,

windows and furniture and also articles with which doors, window

and furniture are to be fitted. To explain this, it has given examples

of fittings of doors, windows as well as furniture. In respect of chair,

following description is given by the Tribunal:-

"Chair is an item of furniture. Chair has its basic part- the frame, the arms, the back and the seat. These are not fittings when one carefully reads the language of Entry No.166. The dictionary meaning of fittings cannot be co-related with the parts of the chair to say that parts of the chair are fittings for the chair. Here again, the fittings would be nails, screws, nuts and bolts, rivets, etc. The meaning of "including" has been rightly explained by the Ld. Counsel for the appellant that it enlarges its scope of the items mentioned in the Entry and does not restrict, but then the enlargement has to be of the similar items and new items which are not in any manner analogous to the items mentioned in the Entry cannot be brought in. If there are fittings for doors, window and furniture which are not included into these as mentioned in the Entry, yes, those could be taxed @ 4% but the parts of doors, window and furniture cannot be by any stretch of imagination included in Entry No. 166.

We agree with the contention of the Ld.Counsel for the Revenue that there is no similarity between the chair handles (arm rest), seat and back of chair made of foam and hinges, knobs, channels, nails, screws, metal sections, tower bolts, brackets, etc. which items are necessarily fittings of doors, window and furniture including the whole lot of items mentioned from Sr. No.1 to 7 in Entry No.

166."

5. When we read this entry as a whole, we are inclined to agree

with the approach adopted by the Tribunal. Mr. Mahana, learned

counsel for the respondent is right in his submission that the word

„fittings‟ has to take its colour from those fittings which are

specially enumerated in clause 1 to 7. In support of his submission

he has relied upon the judgment of the Supreme Court in the case of

Pradeep Aggarbatti, Ludhiana Vs. State of Punjab & Ors. 107

STC 561 in the following words:-

"We are in no doubt whatever that the word "perfumery" in the said Entry No. 16 draws colour from the words "cosmetics' and 'toilet goods' therein and that, so read, the word 'perfumery' in the said Entry No. 16 can only refer to such articles of perfumery as are used, as cosmetics and toilet goods are, upon the person. The word "perfumery" in the context in which it is used has, therefore, no application to 'dhoop' and 'aggarbatti'. The distinction between the present case and the case of Indian Herbs Research and Supply Company is evident for the word ' perfumes' in the entry under consideration in the latter case was not limited by the words before and after, as in the entry before us; both the words ' scent' and 'perfumes' related to articles that produced fragrances."

6. If read in this manner, it cannot be said that each and

every part of the chair, which is otherwise a basic part constituting

the said chair would also qualify the expression "fitting" appearing in

entry 166. That could not be the intent of the Legislature in

enumerating the articles mentioned in the aforesaid entry. No doubt,

the items of fittings which are specified are illustrative and not

exhaustive but that would not mean that any other item which

otherwise is not fitting would be treated as fitting.

7. Mr. Sangal has relied upon the judgment of Andhra Pradesh

High Court in the case of State of Andhra Pradesh Vs. A.P.

Electrical Equipment Corporation, 104 STC 415 to emphasize that

by the use of expression "including", the Legislature has made it