| SooperKanoon Citation | sooperkanoon.com/56743 |
| Court | Sales Tax Tribunal STT West Bengal |
| Decided On | Jun-13-1989 |
| Judge | B Chakrabarti, P Banerji, L Ray |
| Reported in | (1990)78STC72Tribunal |
| Appellant | indus Airconditioning Private |
| Respondent | Commercial Tax Officer, Chichira |
2. The applicant manufactures car air-conditioners, etc., in its factory in Maharashtra and transports the same to Calcutta for sale thereof to Hindustan Motors Ltd. The sales tax authorities of West Bengal have all along treated car air-conditioners as "luxury goods" because of inclusion in Schedule II and have always charged the maximum rate of tax. Tax dues from the applicant have been assessed up to the period ending April 17, 1984. The applicant was given to understand by the sales tax authorities that Schedule II goods, including car air-conditioners, were liable to the maximum rate of tax and by a letter dated April 14, 1982, the Public Relations Officer of the Office of the Commissioner, Commercial Taxes (annexure "B") informed the applicant's tax consultant accordingly. The applicant has all along been importing the said goods to West Bengal without any permit and selling the same as Schedule II non-notified goods. On April 3, 1989, the Inspector of Commercial Taxes of Chichira check-post, Midnapore, seized the goods in question, being car air-conditioners which were being brought into West Bengal by lorry No. MCU 479 on the ground that such import of notified goods was without permit. Thereafter, penalty proceedings were started. The applicant made its submissions against seizure and penalty proceedings, but on April 18, 1989, a penalty of Rs. 1,07,500 was imposed by the concerned Commercial Tax Officer, holding that car air-conditioners were accessories of motor cars and therefore were goods notified under Section 4A of the said 1941 Act.
Hence this application challenging the seizure and penalty.
3. The case of the respondent is that although car air-conditioners are "air-conditioners" within the meaning of entry 3 of Schedule II to the said 1941 Act, the same goods are also motor car accessories and, therefore, "notified goods" within the meaning of Section 4A of the said Act in terms of Notification No. 1319-FT dated April 19, 1984. The letter written by the Public Relations Officer in the year, 1982 has been alleged to be an incorrect interpretation of the law. It is further stated that it will be no problem for the applicant to collect declaration forms from Hindustan Motors Ltd. and claim concessional rates of tax in accordance with law.
4. It is admitted by both sides that spare parts, accessories and components of motor vehicles were previously exigible to tax under the West Bengal Sales Tax Act, 1954, but subsequently such goods were brought under the purview of the 1941 Act. There is no dispute at all that on the material date the spare parts, accessories and components of motor vehicles were governed by the said 1941 Act, since those had been specified in Notification No. 1319-FT dated April 19, 1984, as notified goods under Section 4A of the same Act with effect from April 23, 1984. There is also no dispute that on the material date, air-conditioners stood specified in entry 3 of Schedule II of the said 1941 Act. It needs to be recorded that both the parties have admitted that car air-conditioners are also "air-conditioners" within the meaning of entry 3 of the aforesaid Schedule II.5. Initially the learned Advocate for the applicant contended that any particular goods, if included in Schedule II, cannot be specified as notified goods under Section 4A. This was opposed by the learned State Representative. Finally, Mr. S.K. Chakraborty, appearing for the applicant, conceded that any particular goods specified in Schedule II of the 1941 Act may be specified as notified goods in exercise of the powers under Section 4A of the same Act.
6. The only point for determination is whether car air-conditioners are included in the item "accessories" appearing in Notification No.1319-FT dated April 19, 1984, which came into effect from April 23, 1984. For better appreciation we quote below entry 3 of Schedule II and the relevant item in the aforesaid notification : 3. Refrigerators, air-conditioners, air-coolers and air-conditioning plants, and spare parts, accessories and component parts thereof." Spare parts, accessories and components (including storage batteries) of motor vehicles, motor-cycles and cycle combinations, motor-scooters including mopeds and motorised cycle-rickshaws, motorettes and tractors (but excluding tyres and tubes, and flaps of tyres and tubes).
Explanation.--For the purposes of this notification, 'tractors' shall include bull dozers, scapers, excavators, wheel loaders and pipe layers." 7. It is admitted that the car air-conditioners in the present case are sold in West Bengal by the applicant exclusively to Hindustan Motors Ltd. It was submitted during arguments that Hindustan Motors Ltd. have been using the same in "Contessa Classic" motor cars manufactured by them. The term "accessories" notified under Section 4A has not been defined in the 1941 Act or the Rules made thereunder or in the relevant notifications. Neither party has taken the position before us as to the meaning given to the said term in the trade circles, that is to say, by those who deal in and use the car air-conditioners. In Black's Law Dictionary, Fifth Edition, the following meaning is given to the word "accessory": "anything which is joined to another thing as an ornament, or to render it more perfect, or which accompanies it, or is connected with it as an incident, or as subordinate to it, or which belongs to or with it. An adjunct or accompaniment : Louis Werner Saw Mill Co. v.White (205 La. 242, 17So.2d 264, 270). A thing of subordinate importance, aiding or contributing in secondary way or assisting in or contributing to as a subordinate : Gilfoil v. Greenspon (La. App. 216, So.2d 829, 831)." 8. In Stroud's Judicial Dictionary, Fifth Edition, Vol. I, we find the meaning as follows : " 'accessories' to guns ; held, not to include duplicates of their parts, which, accordingly, had to be paid for as 'guns' [Armstrong & Co. v. Hotchkiss Co. (13 TLR 188)]." 9. Neither party relied on the above dictionary meanings. Mr. S.K.Chakraborty, appearing for the applicant relied on [1970] 25 STC 381 (Mys) (N.A.V. Naidu v. Commissioner of Commercial Taxes). A Division Bench of the Mysore High Court by referring to Webster's New International Dictionary held that as printing types are essential for working the printing machinery, those cannot be considered as something that adds to the convenience or effectiveness of the printing machinery and cannot be classed as accessories to the printing machinery. The meaning given in that dictionary was quoted in the said judgment as follows : "An article or device that adds to the convenience of something else, but is not essential as a speedometer on automotive vehicle." In that case the Mysore High Court was of the view that in order to constitute an accessory to a machinery, the article or device must be one that adds to the convenience or effectiveness of the main machinery, but is not essential. The speedometer is an example of an accessory to a motor vehicle, because the motor vehicle can be run without a speedometer, but such a meter is helpful for the convenience of the motor vehicle.
10. Both on behalf of the applicant and the respondents, reliance was placed on [1976] 37 STC 378 (Annapurna Carbon Industries Co. v. State of Andhra Pradesh). In that case the Supreme Court referred to Webster's Third New International Dictionary. We quote below the relevant portion from paragraph 11 of the Report at pages 381-382 : "A sense in which the word 'accessory' is used is given in Webster's Third New International Dictionary as follows : 'An object or device that is not essential in itself but that adds to the beauty, convenience, or effectiveness of something else.' Other meanings given there are : 'supplementary or secondary to something of greater or primary importance' ; 'additional' ; 'any of several mechanical devices that assist in operating or controlling the tone resources of an organ'. 'Accessories' are not necessarily confined to particular machines for which they may serve as aids. The same item may be an accessory of more than one kind of instrument." On behalf of the applicant reliance was placed also on [1983] 54 STC 308 (Supreme Motors v. State of Karnataka). In this case a Division Bench of the Karnataka High Court was considering whether car seat covers are accessories of motor vehicles. By referring to a number of decisions including that of the Supreme Court in [1976] 37 STC 378 at 381 (Annapurna Carbon Industries Co. v. State of Andhra Pradesh), it was held by the Karnataka High Court, that seat covers of motor cars at best could make the seats more comfortable, but do not serve as aids to the vehicle as a whole, and therefore, they must fall outside the ambit of entry 73 of the Second Schedule to the Karnataka Sales Tax Act, 1957. That entry reads thus : "Articles used generally as parts and accessories of motor vehicles". Therefore it was held in that case that seat covers of motor cars did not come within the term "accessories" of motor vehicles.
11. A recently reported judgment of a Division Bench of the Andhra Pradesh High Court in the case of Universal Radiators Ltd. v. State of A.P. [1989] 73 STC 120, has come to our notice. In that case the question was whether a radiator is a part or an accessory of a motor vehicle. The High Court referred to the definition in Black's Law Dictionary, Fifth Edition and Webster's Third New International Dictionary, both already referred to by us, and held that radiator was not a part of a motor vehicle, since a diesel engine can be operated without the help of a radiator, but it is an accessory, because it enhances the effectiveness of the engine and assist in operating or controlling the diesel engine. It is also a subordinate adjunct to the engine. Without a radiator, the engine will become non-functional and burst on account of uncontrolled heat generated in the engine of a motor vehicle. It helps a motor vehicle to run satisfactorily and effectively.
12. Mr. S.K. Chakraborty, appearing for the applicant-company, relied on the decision of the Supreme Court in [1971] 82 ITR 913 at 921 (Ellerman Lines Ltd. v. Commissioner of Income-tax). An earlier decision reported in [1965] 56 ITR 198 at 203 (Navnit Lal C. Javeri v.K.K. Sen, Appellate Assistant Commissioner of Income-tax), was followed in that case. He contended that a direction of a superior authority (the Public Relations Officer writing on behalf of the Commissioner of Commercial Taxes in the instant case before us) is binding on the subordinate officers. Thus, he argued that car air-conditioners cannot be treated in any manner other than in entry 3 of Schedule II of the 1941 Act in view of the Public Relations Officer's letter of the year, 1982. Learned State Representative argued that there could be no estoppel against a statute and that in any case, the Public Relations Officer could not bind the Government by his views given on some hypothesis. It will be enough if we dispose of this point in this way : apart from the principle that estoppel does not operate against a statute, the letter of the Public Relations Officer does not operate as promissory estoppel, because, as the Supreme Court held in AIR 1987 SC 2414 (Delhi Cloth & General Mills Ltd. v. Union of India), it is quite fundamental that the doctrine of promissory estoppel cannot be used to compel the public bodies or the Government to carry out the representation or promise which is contrary to law or which is outside their authority or power. We hold that the Public Relations Officer's letter of the year 1982 has no binding effect whatsoever on the different authorities subordinate to the Commissioner of Commercial Taxes. Nor does it exclude application of Section 4A to the car air-conditioners at any future date.State of Uttar Pradesh v. Kores (India) Ltd. [1977] 39 STC 8, the Supreme Court held that ribbon is an accessory and not a part of the typewriter machine. It observed that just as aviation petrol is not a part of the aeroplane nor diesel is a part of a bus, ribbon is not a part of the typewriter, though it may not be possible to type out any matter without it. This decision was relied on by the learned State Representative, but car air-conditioners cannot pass this test at all.
14. There cannot be any dispute that car air-conditioners fitted in a motor vehicle do not add to or enhance the effectiveness or functioning of the vehicle. On the contrary, if car air-conditioners are fitted in a motor vehicle, all the doors and windows are to be kept shut, for which sound of horns of other vehicles and sound of passing of other objects in the streets or different directions thereof (which help the driver to effectively drive the vehicle) are shut out at least to a considerable extent. Having regard to the definitions given in the dictionaries and bearing in mind the ratio of the decisions of the Supreme Court and some of the High Courts, as referred to above, we hold that car air-conditioners when fitted into motor vehicles simply add to the comfort and convenience of riders or passengers, but do not add to or enhance the functioning or effectiveness of the motor vehicles or their engines as such. That being the position, we further hold that car air-conditioners do not fall within the term "accessories" of motor vehicles appearing in Notification No. 1319-FT dated April 19, 1984 by which such goods were notified under Section 4A of the said 1941 Act.
15. Accordingly, car air-conditioners have not been notified under Section 4A of the aforesaid Act. In the result, the seizure on April 3, 1989, of the goods in question, which are admittedly car air-conditioners, was without the authority of law and invalid. Since those were never brought within the ambit of "notified goods" under Section 4A, there was no necessity of obtaining or producing permits for import thereof into West Bengal. Consequently, the penalty that was imposed on the applicant on April 19, 1989, must be and is hereby quashed. If any amount of penalty has already been recovered, it shall be refunded to the applicant within two weeks from now. If the goods are still under seizure, those be at once released to the applicant. By an interim order dated May 12, 1989. we directed release of the goods on furnishing a bank guarantee for Rs. 20,000, If that bank guarantee has already been given by the applicant, it shall be released within a week.