Telangana High Court

The State Of Andhra Pradesh Rep. By The ... vs M/S. Bharat Heavy Electricals Limited, on 3 March, 2025

Author: P.Sam Koshy

Bench: P.Sam Koshy

     THE HONOURABLE SRI JUSTICE P.SAM KOSHY
                     AND
     THE HONOURABLE SRI JUSTICE NARSING RAO
                 NANDIKONDA
                 T.R.C.Nos.39, 40 & 41 of 2005

COMMON JUDGMENT:

(Per Hon'ble 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 General Sales Tax Act, 1957 (for short

'the Act') challenging the common orders dated 31.03.2004

passed by the Sales Tax Appellate Tribunal, Andhra Pradesh,

Hyderabad (for short, 'the Tribunal') in T.A.Nos.556 of 2000,

1006 of 2000 and 497 of 2001.

3. Vide the said impugned order, the learned Tribunal has set

aside the orders of the Joint Commissioner (CT) (Legal), dated

11.04.2000, 21.08.2000 and 24.02.2001 relating to the assessment

years 1992-93, 1993-94 and 1995-96 respectively.

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 was an appeal directed against the order dated 24.02.2001.

5. The points for consideration which came before the learned

Tribunal were:

(1) Whether the freight and insurance charges incurred by the appellant in the despatch of goods to the place of the customer could be deducted from the taxable turnover for the purpose of APGST Act? The disputed turnover for the year 1992-93 is Rs.84,90,850 and for the year 1993-94, it is Rs.37,43,034.

(2) Whether the disputed items of goods namely turbo-generators which in combination with other equipments like turbines, electrical machinery, switch gears, bowl mill, heat exchangers, heat machinery, pumps, gil rigs, oil rigs and switch gear equipment including spares of these items revised by the Joint Commissioner (CT), Legal are not "Electrical goods" covered by Entry 38 of Ist Schedule and are only "machinery" falling under Entry 83 of Ist Schedule to the APGST Act. The turnovers disputed under this head for the year 1992-93; 1993-94 and 1995-96 under APGST Act are Rs.31,78,10,851, Rs.8,99,66,578 and Rs.33,10,84,054 respectively and;

(3) Whether the revised orders passed by the Joint Commissioner (CT), Legal for the assessment year 1992-93, 1993-94 and 1995-96 under APGST Act are sustainable in law?

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 that the view

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 turbines, 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 of the I Schedule of the 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:

ENTRY NO.38:

---------------------------------------------------------------------------------------- Entry Description of goods Point of levy Rate of tax Effective

---------------------------------------------------------------------------------------- 38 (All kinds of electrical goods, At the point 10 paise in 1.8.86 to instruments, apparatus and of first sale in the rupee 31.3.95 appliances other than articles the State of plastic and those specifically mentioned elsewhere including);

(i) wires, holders, plugs, switches, electrical earthenware and porcelain ware;

(ii) casings, cappings, repears, bends, junction boxes, meter-boxes,

switch-boxes, meter-boards and switch-boards;

(iii) electrical fans, lighting bulbs torches, fluorescent tubes and other than fittings, like chokers and starters 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 other parts and accessories thereof;

All kinds of electrical goods, At every point 16 paise in 1.4.95 Instruments, apparatus and of first sale in the rupee appliances other than articles the State of plastic and those specifically mentioned elsewhere, including;

(i) wires, holders, plugs, switches, electrical earthenware and porcelain ware;

(ii) casings, cappings, reapers, bends, junction boxes, meter-boxes, switch boxes, meter-boards and switch boards;

(iii) electrical fans, lighting bulbs torches, fluorescent tubes and other fittings, like 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 parts and accessories thereof;

---------------------------------------------------------------------------------------- ENTRY NO.83:

---------------------------------------------------------------------------------------- Entry Description of goods Point of levy Rate of tax Effective

----------------------------------------------------------------------------------------

83 All kinds of machinery, At the point 6 paise in 8.7.1993 propelled or operated by of first sale in the rupee 1.4.1995

(i) electricity the State

(ii) diesel, (iii) petrol,

(iv) furnace oil,

(v) kerosene, (vi) coal including charcoal, or

(vii) any other fuel or power, including spare parts and accessories of such machinery other than those specifically mentioned elsewhere (1083).

8. Learned Special Government Pleader for State Tax

contended that generators etc and other electronic equipments have

been specifically mentioned and reflected in Entry 38 Class IV and

therefore, the majority view of the Tribunal 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 specifically 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 view expressed should not be accepted and

the impugned order therefore, to the aforesaid extent deserves to be

interfered with.

10. However, upon due consideration of the majority view

expressed by the Chairman and the Accountant Member, what

clearly reflects is that the Tribunal had thread bear looked into the

various items which the Revenue wanted it to be brought under the

purview of Entry 38 and thereafter have gone into the classification

of goods and the contents of the two classified entries under I

Schedule i.e., Entry 38 and Entry 83.

11. To ascertain as to under which entry would these products

fall, the two Members had relied upon the series of judicial

precedents of similar nature from various High Courts and under

similar provision of law. In the process, the majority took the view

of the generators and products which are otherwise reflected in

Entry 38 to be those items which are otherwise used

for domestic purposes and cannot be compared with heavy

machineries and generators used in factories and industrial

establishments and thus, reached to the said conclusion. So far as

the other question of law i.e., whether the freight and insurance

charges incurred by the appellant in the despatch of goods could be

detected from the taxable turnover, 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 concerned, does not warrant any

interference nor can it be said to be in any manner unreasonable or

erroneous finding of fact and so far as the issue of freight and

insurance charges is concerned, 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

been remanded by the Tribunal way back in 2004 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 concerned shall

take up these matters on priority basis for expeditious conclusion of

the proceedings strictly in accordance with law.