1981 (3) TMI 77 - SC - VAT / Sales Tax

Clinical syringes classified as hospital equipment under Entry 44; taxed 4% until 30 Nov 1973, 7% thereafter

INDO-INTERNATIONAL INDUSTRIES Versus COMMISSIONER OF SALES TAX, UP.

SC held that clinical syringes are not ordinary 'glassware' within Entry 39 of the First Schedule and instead fall within hospital equipment treatment for ... Interpretation of Statutes - Classification of goods - Syringes - Clinical syringes - whether clinical syringes could be regarded as 'glassware' falling within Entry 39 of the First Schedule to the Act? - HELD THAT:- In popular or commercial parlance a general merchant dealing in 'glassware' does not ordinarily deal in articles like clinical syringes, thermometers, lactometers, etc. which articles though made of glass, are normally available in medical stores or with the manufacturers thereof like the assessee. It is equally unlikely that consumer would ask for such articles from a glassware shop. In popular sense when one talks of glassware such specialised articles like clinical syringes, thermometers, lactometers and the like do not come up to one's mind. Applying the aforesaid test, therefore, we are clearly of the view that the clinical syringes which the assessee manufactures and sells cannot be considered as 'glassware' falling within Entry 39 of the First Schedule of the Act. In our opinion, the view taken by the Orissa High Court in State of Orissa v. Janta Medical Stores [1975 (9) TMI 163 - ORISSA HIGH COURT] is correct. In this view of the matter it is clear that the assessee's turnover upto November 30, 1973 will fall under Entry 44 dealing with 'hospital equipment' and the same would be taxable at the rate of 4% and its turnover from December 1, 1973 to March 31, 1974 will be taxable at the rate of 7% as an unclassified Item and the assessment will have to be made accordingly. In the result the appeal is allowed Issues:Interpretation of whether hypodermic clinical syringes can be considered 'glassware' under Entry No. 39 of the First Schedule to U.P. Sales Tax Act, 1948.Analysis:The judgment pertains to an appeal questioning the classification of hypodermic clinical syringes for tax purposes under the U.P. Sales Tax Act. The appellant, a firm manufacturing and selling these syringes, contested the tax rate applied by the assessing authorities. The Sales Tax Officer categorized the syringes as 'glassware' and taxed the turnover at 10% under Entry No. 39 of the First Schedule. The appellant argued that clinical syringes do not fall under the definition of 'glassware' and should be taxed differently. The issue revolved around the interpretation of the term 'glassware' under the Act.The appellant contended that the term 'glassware' should be understood in its ordinary commercial sense, not a scientific or technical one. They highlighted a decision by the Orissa High Court, supporting the view that items like syringes do not fall under the category of 'glassware.' The appellant argued that clinical syringes, despite being made of glass, are not typically associated with general glassware sold in regular stores. The court agreed with this interpretation, emphasizing that commercial parlance should guide the understanding of such terms.The judgment cited precedents where courts interpreted tax classifications based on popular meanings rather than technical definitions. The court applied a similar approach in this case, determining that clinical syringes should not be classified as 'glassware' under Entry No. 39. The court upheld the appellant's position, ruling that the turnover should be taxed at different rates based on the correct classification. The decision aligned with the Orissa High Court's stance, deeming the Allahabad High Court's view as unsustainable.In conclusion, the court allowed the appeal, directing a reassessment of the turnover based on the correct classification of the syringes. The turnover up to November 30, 1973, was to be taxed at 4% under Entry 44 for 'hospital equipment,' while the turnover from December 1, 1973, to March 31, 1974, would be taxed at 7% as an unclassified item. The judgment clarified the proper tax treatment for the appellant's products, emphasizing the importance of interpreting tax classifications in alignment with commercial understanding.