Tribunal upholds liability on Rs. 65,000 turnover, allows 9% assessment on Rs. 3,000.

The Tribunal upheld the liability to assessment on the turnover of Rs. 65,000 under Section 3(1) but allowed the appellants' claim regarding the assessment at 9 per cent on Rs. 3,000, resulting in the appeal being allowed in part.

---

---

Issues Involved:
1. Whether the disputed transaction merits treatment as not having been done in the course of trade.
2. Whether the treatment for assessment at 9 per cent on Rs. 3,000 is in order.

Issue-wise Detailed Analysis:

1. Treatment of Disputed Transaction as Not Done in the Course of Trade:
The appellants disputed the liability on a turnover of Rs. 62,000 under Section 3(1) of the Tamil Nadu General Sales Tax Act (T.N.G.S.T. Act) and Rs. 3,000 at 9 per cent under item 41 of the 1st Schedule read with Section 3(2). The transaction in question involved the sale of a "Pioneer Broaching Machine complete with accessories" for Rs. 65,000, which was treated as a casual sale in the appellants' accounts. They claimed this sale was not in the course of business and sought its exclusion from the scope of assessment. The Assessing Officer, however, treated the sale as falling within the meaning of the Supreme Court's decision in Burmah Shell's case, thereby subjecting it to assessment. The AAC segregated the electrical equipment attached to the machine and assessed it at Rs. 3,000 at 9 per cent, with the balance assessed at multi-point rates under Section 3(1). The Tribunal upheld the action of the assessing authority, referencing the Supreme Court's decision in Burmah Shell's case and the Madras High Court's decisions in Palani Andavar Mills' case and another Burmah Shell's case, which confirmed that sales of discarded capital assets are assessable within the scope of the Act.

2. Assessment at 9 Per Cent on Rs. 3,000:
The appellants contended there was no scope for treating a portion of the deal as related to electrical goods. The Tribunal examined the intrinsic contents and descriptions of the machinery, including the manufacturer's booklet and other records, and concluded that the machinery was essentially hydraulic. The Tribunal referenced the Madras High Court's decision in William Jacks & Co. Ltd. vs. State of Madras, which held that only articles that cannot be used except with the use of electric energy can be termed as electrical goods. The Tribunal also cited the Madras High Court's view in Textools case and Revi Auto Store's case, which affirmed that machinery designed for use with electric motors does not become electrical goods merely because it is powered by electricity. The Tribunal found no scope to treat the broaching machine as "electrical goods" and thus did not support the treatment adopted by the lower authorities.

Common Parlance Test:
The Tribunal applied the common parlance test, referencing the Bombay High Court's decision in Traub India Ltd. vs. State of Maharashtra, which emphasized that the real test is how the goods are understood in common parlance or by dealers. The Tribunal concluded that broaching machines are not generally considered electrical goods in common parlance, supporting the appellants' position.

Disposition of Discarded Goods:
An argument was advanced that discarded goods lose their character as electrical goods and should be treated as scrap. However, the Tribunal did not find sufficient documentary support to show that the goods were condemned and sold as scrap. Instead, the Tribunal found that the entire turnover under dispute is assessable at multi-point rates under Section 3(1).

Conclusion:
The Tribunal upheld the liability to assessment on the turnover of Rs. 65,000 under Section 3(1) and allowed the appellants' claim regarding the second count, resulting in the appeal being allowed in part.

---