Trade parlance governs sales tax classification; electronic goods require item-wise scrutiny, not automatic treatment as electrical goods.

For sales tax classification, goods must be identified by their ordinary or trade parlance meaning, not by scientific or technical description. The Andhra Pradesh High Court noted that electronic goods cannot automatically be treated as electrical goods merely because they use electricity or are scientifically related to it. Each commodity must be examined separately to determine whether it falls within item 37, within other specific schedule entries such as wireless reception instruments, radios, typewriters, tabulating machines or calculating machines, or outside the schedule altogether. The assessment was therefore required to be reconsidered item by item, with fresh classification and reassessment.

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Issues: (i) Whether all electronic goods manufactured and marketed by the assessee are electrical goods within item 37 of the First Schedule to the Andhra Pradesh General Sales Tax Act; (ii) Whether the assessment had to be remanded for item-wise determination under item 37, item 3, item 12, or outside the schedule.

Issue (i): Whether all electronic goods manufactured and marketed by the assessee are electrical goods within item 37 of the First Schedule to the Andhra Pradesh General Sales Tax Act.

Analysis: Classification for sales tax purposes depends on how the goods are understood in ordinary or popular parlance by persons dealing in them, and not on a purely scientific or technical characterization. The relevant enquiry is whether each commodity answers the description of electrical goods in common trade usage. The Tribunal proceeded on the assumption that electronics is scientifically a branch of electricity and, on that basis, treated all electronic goods as electrical goods. That approach was held to be incorrect because it did not examine the nature of each commodity in the sense in which it is ordinarily understood in the market.

Conclusion: No. All electronic goods could not be treated as electrical goods merely because they use electricity or are scientifically related to electricity.

Issue (ii): Whether the assessment had to be remanded for item-wise determination under item 37, item 3, item 12, or outside the schedule.

Analysis: The proper course was to examine each item separately to decide whether it fell under electrical goods, under the specific entries for wireless reception instruments, radios, typewriters, tabulating machines, calculating machines, or outside the scheduled entries altogether. Since that exercise had not been undertaken, the matter required fresh consideration by the assessing authority.

Conclusion: Yes. The matter was remanded for item-wise classification and reassessment.

Final Conclusion: The order under challenge was set aside and the assessment matters were sent back for fresh item-wise examination of taxability under the relevant schedule entries.

Ratio Decidendi: For sales tax classification, the controlling test is the meaning of the goods in common or trade parlance, and not their scientific or technical character; each commodity must be classified separately on that basis.

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