Ambiguous tax classification of computer peripherals resolved in favour of the assessee for barcode devices and terminals.

Bar code printers, bar code scanners and hand held terminals were classified as computer peripherals under serial No. 20 of Part C(ii)(a) and (b) of the Karnataka Sales Tax Act, because the entry covered printers of the same kind and scanners used with computers. The Court held that, where the taxing entry admitted more than one view, ambiguity had to be resolved in favour of the assessee. Subsequent assessment orders treating the same goods as computer peripherals also supported that classification. The goods were therefore not mere electronic goods, and the assessment and appellate orders were set aside.

---

---

Issues: Whether bar code printers, bar code scanners and hand held terminals fall within serial No. 20 of Part C(ii)(a) and (b) of the Second Schedule to the Karnataka Sales Tax Act, 1957 as computer peripherals.

Analysis: The entry for peripherals covered all kinds of printers and their parts, including printers of the like kind, and also included scanners. A bar code printer functions as a printer used with a computer and a bar code scanner functions on the same line as a scanner used in computer systems. Where an entry is capable of more than one view, the ambiguity in the taxing classification had to be resolved in favour of the assessee. The later assessment orders for subsequent years, where the same goods were treated as computer peripherals, also supported this classification.

Conclusion: The goods were held to fall within the computer peripheral entry and not to be treated as mere electronic goods.

Final Conclusion: The revision petition succeeded and the assessment and appellate orders were set aside.

Ratio Decidendi: Where a fiscal entry for computer peripherals is ambiguous, goods functionally answering the description of printers or scanners used with computers must receive the benefit of the classification in favour of the assessee.

---