TATIA, J. - (1.) THIS bunch of revision petitions involve question of levy of tax on sale of floppy diskettes. The dispute is two folds, one under the Rajasthan Sales Tax Act and another under the Central Sales Tax Act. Two revision petitions; S. B. Civil Revision Petition No. 1245/99 and 1251/99 are arising under the RST Act. The rest of the revisions petitions are in relation to the levy of sales tax on sale of the floppy diskettes under the CST Act.
(2.) THE detail of dates of various orders as well as of the years for which orders were passed by the authorities as well as of actual liability are not relevant for the purpose of deciding these revision petitions because on those points there is no controversy. THE assessing authority passed the assessment order to two matters under RST Act imposing tax, interest and penalty under various heads and the main imposition of tax was on the sale of floppy diskettes. In the opinion of the assessing authority, the floppy diskettes independently records the information/datas within itself and, therefore, the floppy diskettes cannot be part or accessory of the computer and hence it is taxable @ 10% under the general entry instead of 4% under Entry No. 17, which is for the levy of tax on sale of computer accessories. THE assessing authority's order were challenged by the assessee by preferring appeal before the Deputy Commissioner (appeals), Commercial Tax, Udaipur. THE appeal for the two different assessment orders were dismissed by the appellate authority the Deputy Commissioner (Appeals ). THE assessee preferred further appeals before the Rajasthan Tax Board, Ajmer. THEse appeals were allowed by the Tax Board by order dated 23. 2. 1999 (in both the cases ). THE Tax Board held that the floppy diskette is computer accessory and, therefore, tax (RST) leviable on sale of floppy diskettes is 4% as per Entry No. 17 of the Notification dated 4. 3. 1992. Being aggrieved against the order of the Tax Board, the revenue has preferred these two revision petitions to challenge the two orders of the Tax Board referred above. The dispute in these revisions is only that whether floppy diskette is computer accessory or not? According to the revenue, the floppy diskette is an independent Commodity and is not essential part of the computer. It independently records information/dates within itself. The learned counsel for the petitioner tried to support his plea with the help of the decision of the Bombay High Court delivered in the case of Wipro Products Ltd. vs. Union of India and others (1986 (25) ELT 485) (Bom.), wherein the Bombay High Court held that the diskettes are like the cassettes which are used in a video cassette recorder for obtaining the image on the screen. The Bombay High Court, therefore, held that by no stretch of imagination, it can be suggested that video cassettes are part or accessories of the video cassette player/recorder. Applying same analogy, the Bombay High Court held that floppy diskette is not accessory for a computer. In the revision petition also substantially the contention of the revenue is founded upon the judgment of the Bombay High Court referred above and the same example has been given by the revenue of video/music cassette recorder, which according the revenue are not the accessories of the equipment, i. e. , tape or video recorder or player. Despite taking a stand that floppy is not a computer accessory not it is part of computer, in another set of revision petition, which are arising under the CST Act, the stand of the revenue is that the floppy diskettes cannot be treated to be electronic goods and on the contrary, it is an essential and material part of computer. According to the learned counsel for the revenue this stand was taken by the revenue because of the reason that the tax Board already in its various decisions under RST Act held that the floppy diskette is computer accessory. According to the revenue a Notification No. 908 was issued on 5. 2. 1994 under Section 8 (5) of the CST Act, 1956 providing levy of the tax on "computer including parts and accessories thereof" @ 4%. Therefore, according to revenue the tax leviable under the CST Act, 1956 on sale of the Floppy Diskettes is chargeable as provided by the Notification dated 5. 2. 1994 @ 4%. Since assessees found more beneficial Notification coming into force w. e. f. 27. 3. 1995, took the stand that the floppy diskette is computer accessory but is also electronic item. For electronic items for which new Notification has been issued by the Government on 27. 3. 1995, therefore, the floppy diskettes stand taken away from the purview of Notification dated 5. 2. 1994 or if floppy diskette is covered under both the Notification, the assessee is entitled to take benefit of more beneficial provision and that is Notification dated 27. 3. 1995. It is relevant to mention here that if the floppy diskette is not accepted as computer accessory consequently not covered by the Notification dated 5. 2. 1994, the floppy diskettes are to be taxed in general or residuary entry and the difference is 4% : 10%. If the floppy diskette is accepted as computer accessory it is covered by Notification dated 5. 2. 1994 and is beneficial to assessee. In the year 1995 on 27. 3. 1995, another Notification was issued providing levy of tax @ 2% for electronic items. The assessees succeeded in convincing the Tax Board that though the floppy diskette is computer accessory and tax liability before Notification dated 27. 3. 1995 was 4% on its sale but since floppy diskette is electronic item, therefore, it can be taxed as per Notification dated 27. 3. 1995 @ 2% instead of @ 4% as per Notification dated 5. 2. 1994. It is also submitted by the learned counsel for the revenue that even as per assessee itself the Floppy Diskettes is computer accessory which is clear from the stand taken by the assessee in the connected revision petitions arising under the RST Act. The assessee took the benefit under RST Act only because of reason that assessee's own contention was accepted and it was held by the Tax Board that Floppy Diskette is computer accessory. Learned counsel for the petitioner vehemently submitted that if in the orders of the Tax Board holding the Floppy Diskette a computer accessory, then the orders of the Tax Board in the matter of levy of central sales tax on sale of p/floppy diskettes can only under Notification dated 5. 2. 1994 which provides levy of CST @ 4% on sale of computer accessory and order of the Tax Board holding that floppy diskettes are "electronic item", and its sale is governed by Notification dated 27. 3. 1995 is liable to be set aside.
(3.) ACCORDING to the learned counsel for the petitioner, firstly the Floppy Diskettes are not the essential part of the computer nor are accessories because of the reason that the computer can run without Floppy Diskettes and it is not necessary that every computer should have floppy drive to run computer. The Floppy Diskette records and keep the data within it like as picture or audio is captured and stored in tapes. The audio video tapes can also be played only by their player. The tapes are not the accessories of recorder or player. The Bombay High Court, therefore, rightly observed that in cases of audio and video cassettes, audio and video cassette recorder and player are independent commodity and cassettes are independent commodity. Second limb of argument raised for levy of tax @ 4% treating the Floppy Diskettes as computer accessory is dependent upon the decision on first question. It is submitted that once the Floppy Diskettes are held to be computer accessories then irrespective of floppy diskette's operational and functional properties of electronics, the item shall remain in the same category for the purpose of levy of tax, under the Notification where there is specific reference and inclusion of said commodity. It is clear from the Notification dated 5. 2. 1994 that the "computer accessories" are taxable as per the Notification dated 5. 2. 1994 and the assessee cannot take benefit of Notification dated 27. 3. 1995 which provides for tax on sale of "electronic items". Words "electronic items" is of general nature where as "computer accessory" is specific item included in the Notification dated 5. 2. 1994. It is submitted that specific entry will exclude the general entry and therefore, the tax on sale of Floppy Diskettes under CST Act is leviable as per Notification dated 5. 2. 1994. The learned counsel for the petitioner (revenue) relied upon the judgment delivered in the case of State of Gujarat vs. Pfizer Ltd. (1991 Vol. 82 STC 374 ). The learned counsel for the assessees vehemently submitted that the Floppy Diskettes are magnetic discs and specific item known by name. Floppy Diskettes can be used only through the computer. The Floppy Diskettes cannot work independently. According to the learned counsel for the respondents any item which adds or increases the utility of the another item, then that item is accessory of main functional item. The learned counsel for the respondents relied upon several judgments and reference of some of which has been given in the impugned orders of the Tax Board. In the judgment relied upon by the learned counsel for the respondents, television stand, refrigerator stand, cycle seat cover, cycle lock, type writer ribbon were accepted as accessories of their main article with which they are used. Therefore, according to the learned counsel for the respondents, the Tax Board rightly held that the Floppy Diskette is computer accessory. It is also submitted that the judgment relied upon by the petitioner in the case of Wipro Product Ltd. (supra) has no application to the present controversy because of the reason that the subject matter and dispute in the case of Wipro Product Ltd. was entirely different and the question whether the Floppy Diskettes are accessories of the computer as such was not involved in the controversy. In addition to above, the learned counsel for the respondents also submitted that in view of the fact that the Floppy Diskettes can be used only through computer and it enhances the utility of the computer, therefore, it is computer accessory only in the light of reasoning given in the various decisions of Hon'ble Apex Court and also in view of judgments of other High Courts, therefore, the view in the case of the Wipro Product Ltd. appeared to be wrong. Advancing his argument, the learned counsel for the respondent submitted that though the floppy diskette is computer accessory but it is an electronic item. Earlier the floppy diskettes were covered under the Notification No. 908 dated 5. 2. 1994 and was taxable @ 4% as computer accessories. The State Government issued another Notification on 27. 3. 1995 providing sales tax on sale of electronic items @ 2%. Therefore, the floppy diskette which is computer accessory because of its functionality, is being electronic item, also fails in the good described under the heading "electronic item". The "magnetic diskettes" are included specifically in the list referred in the Notification dated 27. 3. 1995. Therefore, the floppy diskette was falling in the term computer accessory and tax leviable on its sale was 4% as per Notification dated 5. 2. 1994. But this item floppy diskette stands taken out for the purpose of levy of tax out of several computer accessories covered by Notification dated 5. 2. 1994 by inclusion of floppy diskette under Notification dated 27. 3. 1995. The words "computer accessory" is a wide term which includes any item which is accessory for computer and may be of iron, wood, plastic, glass, rubber or PVC and also may be electronic item. Out of this general term "computer accessory", the electronic item is specific and floppy diskette is undisputedly electronic item. That specific item from the general category "computer accessory" has been picked up by Notification dated 27. 3. 1995. After 27. 3. 1995, all electronic items, may they be accessories of computer or of any other article or may be independent article, they are taxable only under the Notification dated 27. 3. 1995 which provides tax @ 2%. The learned counsel for the respondent further submits that thereafter in the year 2000, specifically on 3. 3. 2000, the State Government issued another Notification and by that Notification, the tax on floppy diskettes has been made 2%. Therefore, it is clear that the floppy diskette was rightly held to be having tax liability @ 2% by the Rajasthan Tax Board in the impugned orders. I considered the arguments advanced by the learned counsels, perused the facts and reasons given by the Tax Board in their orders. I also considered the judgments relied upon by the learned counsel for the parties. ;