State of Gujarat vs Kaam Retreat

M.R. Shah, J.�Present reference at the instance of the State has been made by the learned Gujarat Sales Tax Tribunal for our opinion on the following substantial question of law:

"Whether, on the facts and in the circumstances of the case, the Gujarat Sales Tax Tribunal was right in law in holding that sale of Kaam Vertical Industrial process camera complete film size 50 x 60 c.m. with one lens 150 m.m. copy board halogen lamps suction back vacuum fan manufactured by the opponent would be covered by entry 16(1) of Schedule IIA to the Gujarat Sales Tax Act, 1969 (as it stood at the relevant time) for the purpose of levy of tax or its sale is covered by entry 75 of Schedule IIA or alternatively under entry 79 in Schedule IIA."

That the respondent-dealer was registered under the Gujarat Sales Tax Act (hereinafter referred to as "the Act") in respect of its business of manufacturing industrial cameras which were used by printers as one of the printing machine. An application was made to the Commissioner of Sales Tax under section 62 of the Act, to determine the rate of tax payable on the sale of such cameras sold under the name of "Kaam Vertical Industrial process camera complete film size 50 x 60 c.m. with one lens 150 mm copy board, halogen lamps, suction back vacuum fan". It was the case on behalf of the dealer that the aforesaid would fall under entry No. 16(1) as printing machinery liable to be taxed accordingly. Considering the material on record, the Commissioner held that the aforesaid item would fall in entry No. 75 and liable to be taxed accordingly. On appeal, the learned Tribunal has held that the goods in question would fall in entry 16(1) of Schedule IIA as machinery/printing machinery and not as camera in entry No. 75. That at the instance of the revenue, present reference is made to consider aforesaid substantial question of law.

Shri Gandhi, learned Assistant Government Pleader on behalf of the State has vehemently submitted that as such the goods in question shall fall in entry No. 75. It is submitted that even if the goods in question can be said to be machinery in the common parlance as there is specific entry with respect to photographic and other cameras as per entry No. 75, the learned Tribunal has materially erred in holding that goods in question shall fall in entry No. 75. It is submitted that entry No. 75 is a specific entry and the words used therein are "photographic cameras and cinematography cameras" which would clearly mean that not only photographic cameras but all types of cameras would be covered by that entry. It is submitted that as such the product is one type of camera and the same has not been disputed. It is submitted that even keeping in view the functional character of the product, the camera works on the same principle as the photographic camera functions. It is submitted that the learned Tribunal has not properly appreciated the fact that as such entry No. 75 is specific entry and entry No. 16 is general and residuary entry. It is submitted that therefore, the Commissioner was justified in holding that the goods in question shall fall in entry No. 75. It is submitted that in the alternative the goods in question may fall within entry No. 79. It is submitted that the learned Tribunal has materially erred in relying upon the decision of the honourable Supreme Court in the case of Chowgule and Co. Pvt. Ltd. and Another Vs. Union of India (UOI) and Others, as well as decision of this court in the case of Industrial Machinery Manufacturers Pvt. Ltd. Vs. The State of Gujarat, . It is submitted that the learned Tribunal has materially erred in not relying upon the decision of this court in the case of Bhuj Product v. State of Gujarat reported in [1991] GSTB (HC) Vol. II-396 which was with respect to Xerox machine. Making above submissions and relying upon the above decisions, it is requested to answer the question in favour of the Revenue and against the dealer.

The learned advocate has chosen to remain absent. Present sales tax reference is of the year 1999 and as such arising out of the determination order passed by the Commissioner passed in the year 1988. Under the circumstances, we have proceeded further with the hearing of the present reference ex parte. However, we have considered written statement submitted on behalf of the dealer, submitted before the learned Tribunal and the decisions which were relied upon on behalf of the dealer.

Having heard Shri Gandhi, learned Assistant Government Pleader appearing on behalf of the State and considering the goods in question which properly known as industrial camera and its function, we are of the opinion that the learned Tribunal has erred in holding that the goods in question, i.e., industrial camera will fall in entry No. 16(1) in Part A of Schedule II, i.e., machinery. From the impugned order, it appears that the learned Tribunal has held against the Revenue by observing that even State has accepted that the goods in question is a printing machinery/machinery. It is required to be noted that as such it was an industrial camera. Entry No. 75 which was prevalent at the relevant time, reads as under:

"Entry 75 : 1-4-1983 and onwards.

Photographic and other cameras and enlargers, lenses, paper, films and plates required for use therewith and spare parts and accessories thereof."

4.1 Therefore, as per entry No. 75 "photographic and other cameras" shall fall within entry No. 75. Under the circumstances, merely because the product in question was a machinery, the same cannot be considered in entry No. 16(1) of Schedule IIA as machinery, as such product in question is industrial camera and as per entry No. 75 (photographic and other camera) each included in entry No. 75. Therefore, we are of the firm opinion that product in question--industrial camera will fall within entry No. 75 and was subjected to sales tax under the said entry No. 75.

In view of the above and for the reasons stated above, reference is answered in favour of the Revenue and against the dealer by holding that the product in question industrial camera would fall under entry No. 75 and not under entry No. 16(1) of Schedule HA to the Gujarat Sales Tax Act, 1969 as held by the learned Tribunal. With this, present reference is disposed of.