- (1.) The Sales Tax Tribunal, Haryana (hereinafter referred to as "the Tribunal") has referred for the opinion of this Court the following questions of law under Section 42 of the Haryana General Sales Tax Act, 1973 (in short "the Act") arising out of its order dated September 28, 1996 in STA No. 221/94-95 and STR No. 56 of 1996-97 for the assessment year 1988-89: (i) Whether, in the facts and circumstances of the case, clean air equipment (laminar flow clean air equipment) and accessories thereof are electrical appliances under entry 18, Schedule A of the Act or industrial machinery (general goods) ? (ii) Whether the Assessee was liable to pay interest under Section 25(5) of the Act ibid, in view of the honourable Supreme Court of India judgment in J.K. Synthetics Ltd. v. Commercial Taxes Officer, 1994 94 STC 422
(2.) The Assessee is a registered dealer under the Act at Faridabad and is engaged in manufacture of laminar flow clean air equipments used in manufacturing pharmaceuticals products like intravenous fluids injectable vaccines, etc. The Assessee claimed that the goods sold by it are industrial machinery to which general rate of tax was attracted at the last stage of sale. The Assessing Authority, however, held that the goods were "electrical appliances" under entry 18 of Schedule A carrying higher rate of tax at first stage. Accordingly, the demand of tax was raised and the finding of the Assessing Authority was upheld by the appellate authority and the Tribunal. Review application against the order of the Tribunal was dismissed. The Tribunal followed its earlier orders dated August 21, 1991 and June 26, 1992 in the case of the Assessee to the following effect: I have heard the parties and have also gone through the facts on record. The items manufactured by the Appellant are necessarily appliance which are dependent on electricity for their operation. A host of such appliance such as fans/heaters/lamps/blowers are energy dependent on their operation and individually may be used for a host of different purposes. I, therefore, hold these to be electrical appliance. The items are not electrical goods or for that purpose electrical equipment. The order of the revising authority in levying tax at the rate of 12 per cent is as per provision of the Act. In the facts and circumstances of the present case, the consequential levying of interest is also in accordance with the law. There is no force in the present appeal which is hereby dismissed.... I have gone through the grounds of appeals submitted before the Tribunal. In the grounds of appeal the counsel for the Appellant has almost reiterated the same grounds which have been considered by the revisional authority while giving his finding. The main plea of the Appellant is that the goods manufactured by the Appellant are not electrical appliance. No new grounds have been added which may warrant any interference in the orders of the lower authority. The items manufactured by the Appellant are necessarily appliance which are dependent on electricity for their operation. A host of such appliances such as fans/heaters/lamps/blowers are in fact energy dependent. On their operation these are used for a host of different purposes. The revisional authority in its detailed orders has dealt with this point and has given finding based on the judgments of the High Court. In view of these clear facts on record and judgments of the Tribunal in the case of the Appellant itself, then goods manufactured by the Appellant have rightly been treated as electrical appliance leviable to tax at the rate of 12 per cent. Since the Appellant did not make the payment of tax in time the levy of interest is automatic and cannot be dispensed with in view of the judgment reported as Associated Cement Co. Ltd. v. Commercial Tax Officer, 1981 48 STC 466 (SC). In this situation there is no force in the present appeals and as such all the four appeals are dismissed.
(3.) We have heard learned Counsel for the parties. 4 The question for consideration is whether the goods in question, i.e., laminar flow clean air equipments are covered by entry 16 "electrical appliances". The Tribunal has held that the appliances in question could not be operated without electricity and, therefore, the goods were covered by the expression "electrical appliances". 5. The learned Counsel for the Assessee submits that the test for determining whether the goods are electrical appliances or not is not whether the same is operated by electricity but whether the appliance converts electric energy into another form of heat or mechanical energy. Industrial machinery even if operated by electricity is not within the purview of electrical appliance. Reliance has been placed on dictionary of Electrical and Electronic Terms: as per American National Standard--1984 prepared by IEEE (Institute of Electrical and Electronics Engineering) an electrical appliance as under: A utilization item of electric equipment, usually complete in itself, generally other than industrial, normally build in standard sizes, or type that transforms electric energy into another form heat or mechanical at the point of utilization, for example a flat iron, toaster, washing machine, dryer, hand drill, food mixer and air-conditioner. 6 Reliance has also been placed on the following judgments: (i) Viswa and Co. v. State of Gujarat, 1966 17 STC 581 (Guj). (ii) Collector of Central Excise v. Alco Industries, 1991 55 ELT 184 (Mad). (iii) Shri Punit Ghar Ganti v. Union of India, 1981 8 ELT 121 (Guj). In Viswa and Co. v. State of Gujarat, 1966 17 STC 581 (Guj), it was held that electrical fans are domestic electrical appliances. Interpretation of tariff entry in a fiscal statute, common parlance test had to be applied as laid down by the honourable Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola, 1961 12 STC 286 (SC). The Madras High Court in Collector of Central Excise v. Alco Industries, 1991 55 ELT 184 (Mad) held that "wet grinder" used by the manufacturers was not covered by the expression "domestic electrical appliance" as the same could not be directly run by electricity. The observations in the judgment are: In the light of the various pronouncements referred to supra, we are of the view that in order to bring an article or commodity within the meaning of tariff item 33C and within the meaning of the expression 'domestic electrical appliance', it is necessary that electrical appliances should be in-built in the commodity concerned. An electrical appliance is not the same as electrically operated machinery and all electrically operated machineries cannot be said to answer the description of electrical appliances. The presence of an electric motor in an apparatus or machinery notwithstanding that electric motor formed a distinct, severable and separate unit, cannot have the effect of rendering the machinery or apparatus an electrical appliance merely because the said motor also was fixed as a distinct component of wet grinder, connected by a V-belt. 8. In Shri Punit Ghar Ganti v. Union of India, 1981 8 ELT 121 (Guj), the Gujarat High Court considered the question whether flour grinding machine is an electrical appliance. It was held that the flour grinding mill was not covered by the expression "domestic electrical appliances" as it was required to be fitted with separate electric motors and could not by itself be operated with the help of electricity. 9. We are of the view that the judgments relied upon do not directly deal with the item in question. It cannot be disputed that the tariff entry has to be given in its ordinary meaning as understood in common parlance. The entry in the Schedule is as under: Electrical appliances excluding electric bulbs, electric motors, motor starters and mono-block pumping sets but including fluorescent tubes and spare parts and accessories thereof. 10. We do not find any reason to exclude laminar flow clean air equipments and accessories thereof from the above expression. The judgments relied upon are distinguishable. In Viswa & Co. case , (1966) 17 STC 581 (Guj), the question was whether electrical fans were domestic electrical appliances and the answer was in the affirmative by applying the common parlance test. In Alco Industries case , (1991) 55 ELT 184 (Mad), wet grinder was held not to be domestic electrical appliance as the same could be run with the help of an electric motor and not by itself. Moreover, the entry carried expression "domestic" which excluded industrial machinery. Similarly, in Shri Punit Ghar Ganti v. Union of India case, 1981 8 ELT 121 (Guj), the flour grinding machine was not held to be electrical appliance which could be operated either manually or with the help of an electric motor. The mill could not be run directly with the electricity. 11. In the present case, the goods in question have been described as under: The laminar flow clean air equipment gives clean air free from air particles and bacteria required for manufacture of most pharmaceutical products. The filtration is done with the help of media such as microfibre glass filter paper which has a varied degree of porocity. 12. There is no dispute that the equipment in question is run with the electrical energy and provides filtered air. No distinction can be made on the basis of domestic purpose or the industrial purpose for use of the article. We, thus, do not find any reason to take a view different from the one taken by the Tribunal. The question is, thus, answered against the Assessee and in favour of the Revenue. 13. Now coming to question (ii), it is not disputed on behalf of the State that in view of the Constitution Bench judgment of the honourable Supreme Court in J.K. Synthetics Ltd. v. Commercial Taxes Officer, 1994 94 STC 422 , the levy of interest was effective from the date of issuance of demand notice and not from the date of filing of return. The said question, thus, stands answered in favour of the Assessee and against the Revenue. 14. Reference is disposed of.;