A NAGARAJU BROS VISAKHPATNAM Vs. STATE OF ANDHRA PRADESH
LAWS(SC)-1994-7-6
SUPREME COURT OF INDIA
Decided on July 19,1994

A. NAGARAJU BROS., VISAKHAPATNAM Appellant
VERSUS
STATE OF ANDHRA PRADESH Respondents




JUDGEMENT

- (1.)The question in this appeal is whether 'vip' suitcases are plastic articles within the meaning of Entry 113 of Schedule I to the A. P. General Sales Tax Act. The question arises with reference to the assessment year 1981-82. With effect from 1/7/1985 a new entry, viz. , Entry 163 was introduced in Schedule I expressly taking in all kinds of suitcases and simultaneously amending Entry 113. Prior to 1/7/1985, there was no entry dealing specifically with suitcases. Entry 113 read as follows: "plastic sheets and articles" and the rate of tax was 6%. In the year 1983, the rate of tax was increased to 9%. The amended Entry 113 (w. e. f. 1/7/1985 reads as follows: "plastic sheets and articles excluding those allied goods falling under any other item" whereas Entry 163 reads: "all kinds of suitcases, briefcases and vanity bags. "
(2.)The appellant is a dealer inter alia in 'vip' suitcases. Suitcases are made of leather, cloth, rexine and other material. We are concerned herein with suitcases made of plastic by the method known as "injection-moulding" and fitted with steel bands, locks and ancillaries made of other materials. The appellant submitted that the said suitcases are plastic articles within the meaning of Entry 113 of Schedule 1 to the Act and, therefore, taxable only at the first point of sale. Inasmuch as the sales effected by him were second sales, he submitted, the turnover relating to said suitcases was not taxable in his hands. Though the assessing authority agreed with him, the Deputy Commissioner revised the assessment order, holding that the said suitcases are not 'plastic articles' and must, therefore, be taxed as general goods under Section 5 (1 of the Act which means multi-point tax. The Sales Tax Appellate tribunal dismissed the dealer's appeal following its own earlier decision in TA No. 566 of 1984 disposed of on 12/3/1987. The tax revision filed by the appellant-dealer under Section 22 of the Act was also dismissed by the High court.
(3.)It is brought to our notice that this very question arose in the case of certain other dealers as well and the decisions of the tribunal are not uniform. In TA Nos. 1357 of 1988 and 1400 of 1988 (Blow Plast Ltd. v. State of A. P. ) the tribunal took the view that 'vip' suitcases are plastic articles. Same view was taken in TA No. 83 of 1989 and batch disposed of on 21/2/1991 in the case of Safari Suitcases (P) Ltd. Indeed in the case of this very dealer relating to the assessment year 1983-84, the tribunal held following the decision in TA No. 1357 of 1988 that these suitcases are plastic articles. Contrary view was expressed in TA No. 566 of 1984 and in this very matter. In TA No. 1357 of1988, the tribunal has set out the following circumstances in support of its opinion that the said suitcases are plastic articles:
"1.That when licensing the industry for production of these suitcases, the government of India described the articles to be manufactured as injection-moulded plastic goods;

2. For exporting the said injection-moulded plastic goods they are registered with the Plastics and Linoleum Export Promotion council and they are described as plastic goods in the Certificate of Registration given by the Plastics and Linoleums Export Promotion council.

3. Organisation of Plastics Processors of India has issued Certificate staling that VIP suitcases and briefcases are classified as suitcases and briefcases made predominantly of plastic and are charged 31.5% excise duty as against 26.25% chargeable for suitcases, briefcases etc. , not being of predominantly of plastic.

4. Even in regard to the monthly production statements by the VIP Industries, these goods are mentioned as injection-moulded plastic goods only.

5. The Plastics and Linoleums Export Promotion council selected the VIP manufacturers as the Top Exporters for Plastic Moulded Luggage for 1985-86 and given the award of top exporter of Plastic Moulded Luggage.

6. They also filed affidavits of three persons one of Bombay by name Manilal Maru, one of Bangalore by name Faziul Rahiman another of Bangalore by name Giridhar staling that this luggage are treated as plastic suitcases and briefcases in the trade circles and in common parlance.

7. Certificate from the Plastics and Linoleums Export Promotion council, that plastic moulded luggage like VIP briefcases, suitcases are regarded as articles made of plastic and duty drawback benefits and other allowances are accorded to them treating them as articles of plastic.

8. The particulars of plastic component furnished clearly indicate that it is a major component in all briefcases and is more than 50% in all suitcases except small suitcases where it is about 45%. "

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