Alladi Kuppuswami, Ag.C.J.
1. The assessee, M/s. Electronics Corporation of India Ltd., is the petitioner. The assessment relates to the years 1971-72, 1972-73 and 1973-74. The Appeals Nos. 54 to 56 of 1977 in regard to the assessment orders for these years were disposed of by a common order by the Sales Tax Appellate Tribunal.
2. The petitioner is a Government of India undertaking which manufactures various items of electronic equipment. The Commercial Tax Officer taxed the entire turnover of 1971-72 at 10 per cent; part of the turnover of 1972-73 at 7 per cent and the remainder at 10 per cent; part of the turnover of 1973-74 at 10 per cent and the remaining at 12 per cent. These were appeals to the Assistant Commissioner who rejected and appeals for 1971-72 and 1972-73. Regarding the year 1973-74 he set aside the order of the Commercial Tax Officer and directed him to ascertain the turnover relating to television and its components and parts and computers and restrict the tax to that turnover at 10 per cent or 12 per cent, as the case may be, and levy tax on the rest of the disputed turnover at 7 per cent or 8 per cent, as the case may be, as electrical goods. The assessee appealed to the Tribunal in regard to the assessment relating to all the three years. The main contention of the assessee before the Tribunal was that the goods manufactured by it are not electrical goods within the meaning of item 37 of the First Schedule to the Andhra Pradesh General Sales Tax Act applicable for the relevant assessment years. The Tribunal took the view that for the purpose of levying sales tax, all the electronic devices marketed by the appellant both in form and substance are not in any way different from electrical appliances. In coming to this conclusion the Tribunal considered five questions : (1) what is electricity; (2) what is electronics; (3) points of similarly between electricity and electronics; (4) points of difference or distinguishing features between electricity and electronics; and (5) whether electronic equipment can also be called as electrical equipment. After considering the meaning of these two expressions in the dictionary, Encyclopedia Britannia and various text books on Electricity and Electronics, the Tribunal came to the conclusion that electronics is a branch of electricity and there does not seem to be much difference between electric appliances and electronic devices. Having come to this conclusion, the Tribunal felt that some of the items may come under specific item, viz., item 3 and item 12, i.e., wireless reception instruments and apparatus, radios, etc., and typewriters, tabulating machines, calculating machines, etc. As the question whether some of the goods manufactured and marketed by the petitioner would come under item 3 or item 12 or under the general item 37 was not considered by the departmental authorities, it directed the assessing authority to obtain the turnover particulars in respect of the items falling under the above heads and determine the amount of tax payable at the prescribed rates. In the result, the Tribunal set aside the order of the authorities below and directed them to reframe the assessments in the light of the directions in that order. The assessee has filed these revision petitions against the order of the Tribunal.
3. The main contention urged by Sri Anantha Babu, the learned counsel for the petitioner, is that the Tribunal was wrong in holding that all the electronic goods manufactured and marketed by the petitioner are electrical goods within the meaning of item 37. He submitted that the assessee's contention is that the term 'electrical goods' as commonly understood by those dealing with such goods either as traders or customers would not include electronic goods manufactured and marketed by the assessee. They do not also come within items 3 and 12. In other words, they are not covered by any of the items in the schedule and hence they must be taxed as general goods. The learned Government Pleader on the other hand contended that the Tribunal was right in holding that all electronic goods are electrical goods within the meaning of item 37. At any rate some of them would fall within items 3 and 12 and tax should be levied on that basis.
4. The first question for consideration is whether the Tribunal was right in holding that the electronic goods manufactured and marketed by the petitioner are electrical goods within the meaning of item 37.
5. A list of goods manufactured and marketed by the petitioner was furnished to the assessing authority and the Tribunal and is also placed before us. They consist of goods manufactured by various divisions like 'Nuclear Instruments Division', 'Measuring Instruments Division', etc. It is not necessary for us to set out in detail the innumerable goods that are being manufactured by the petitioner and contained in the list, for, we are satisfied that the approach to the question by the Tribunal in considering whether the goods in question are electrical goods, or not, is not correct. The Tribunal has proceeded on the footing that from the scientific point of view, electronics is a bench of electricity and therefore all electronic goods must be classified as electrical goods. In the context of liability to sales tax, however, it has been repeatedly held by the Supreme Court and the various High Court including this Court that in order to find out whether particular goods are covered by a particular item in the schedule or not, the real test is to determine how the goods are treated and considered in ordinary parlance by those who are dealing with the trade relating to the said goods. In the leading decision of the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola : 1SCR279 , while considering the import of the word 'vegetable', the Supreme Court observed :
'But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it.' It is to be construed as understood in common language.'
6. In particular, dealing with the expression 'electrical goods', the Allahabad High Court in Commissioner of Sales Tax v. Bharat Traders ( 33 S.T.C. 3.), held that the two essential requirements of the electrical goods are : (1) that they must be used by electrical energy and (2) that they must answer the description of electrical goods. In that particular case they held that wooden gittis, switch-boards and battens do not answer the description of electrical goods used in common parlance. Similarly in Deputy Commissioner of Commercial Taxes v. Ravi Auto Stores ( 22 S.T.C. 172.), the Madras High Court held that welding electrodes are not electrical goods and in State of A.P. v. Indian Detonators Ltd. ( 28 S.T.C. 84.), this Court held that detonators are not electrical goods. It was argued by the learned Government Pleader that all these electronic goods manufactured by the petitioner cannot be used without the aid of electricity and hence they must be treated as electrical goods. But that is not the only criterion. The really important criterion is whether these goods are regarded as electrical goods in common parlance, in the sense mentioned by the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola : 1SCR279 . This aspect has not at all been gone into by the Tribunal. This has to be considered with reference to each commodity manufactured and marketed by the petitioner which is the subject-matter of sales and which has been included in the turnover. The Tribunal therefore ought to have remanded the case to the authorities for determining whether the goods are electrical goods in the above sense. The Tribunal was obviously in error in holding that all electronic goods are electrical goods.
7. Even if any, or all, of these goods fall within or covered by item 37 - electrical goods, a further question may arise, viz., whether they are covered by any of the specific items mentioned in item 3 or item 12. The assessee is also contending that some of the goods do not fall under any of the items.
8. We, therefore, set aside the order of the Tribunal and remand the cases to the Commercial Tax Officer with a direction to consider with reference to each item as to whether it fall under electrical goods - item 37, or item 3 or item 12, or whether they are not covered by any of the items as contended by the assessee, in the light of the observations contained in this judgment. All the three T.R.Cs. are allowed. No order as to costs. Advocate's fee Rs. 150 in each.
9. Petitions allowed.