AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 720
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....tification, after entries at serial Number 74, the following entries shall column wise be inserted, namely : Serial number Description of goods Point of tax Rate of tax percentage 1 2 3 4 75(i) (a) Television, video cassette recorders, video cassettee player, Satellite receiver, wireless set, video cassette, video games and electronic toys; M or I 12 per cent (b) Telephones including cordless phones, phones with cords, celluar phones and parts, accessories and components thereof; M or I 4 per cent (ii) Computer hardware, software and parts thereof and electronic components that is to say all types of passive compoments, resisters, capacitors, diodes and other active compoments, transistors, integrated circuits, large scale integration, very large scale integration chips, black white picture tubes, colour picture tubes, power semi-conductors, audio tapes and video tapes, printed circuit boards, connectors, relay, auto electronic components, magnetic media, micro wave tubes television components, television glass shells, electronic transducers, actuators, display devices that is light emitting diodes, liquid crystal diodeds, micro....
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....) M or I 12 per cent (iii) Motor cycles, motor cycles combination, motor scooters, moped Sale by dealer to consumer or, in this case of sale through a hire purchase company, to the hire purchase company, finacing this purchase by the consumer. 12 per cent The dispute itself has travelled to this Court in the following background. The revisionist is stated to be engaged in the business of trading in TV, Music Systems, Mobile/Cellular Phone, Stereo, Laptop, Audio/Video Systems, Projector etc. During the assessment proceedings which were undertaken for A.Y. 2005-06, the assessing authority accepted the account books maintained the revisionist but taxed the sale of Car Stereos @ 12%. The revisionist had accepted its liability of tax upon the said article treating it to be "electronic goods" thus falling within Entry 75. Aggrieved by the view that was taken by the assessing authority the revisionist preferred a First Appeal. The first appellate authority was informed during the course of proceedings before it that the controversy raised, had been settled by the Tribunal itself while dealing with a similar issue pertaining to A.Y. 2004-05. The judgment of the Trib....
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....efore, procedure in Rules 1 to 19(B) subject to modification and adoption etc. would apply for filing revision also. 4. Rule 5 of Chapter 27 of the High Court Rules contemplates filing of an affidavit of service of the copy of application, which is being filed in this Court. If the revision is preferred by assessee, he shall serve copy of revision upon learned Standing Counsel and file an affidavit of service giving facts as stated in Rule 5(1) and if revision is preferred by the Revenue i.e. Commissioner of Trade Tax, he shall ensure service of revision upon assessee and file an affidavit of service in the same manner. Chapter 27 Rule 5 of The High Court Rules, 1952, reads as under :- "5. Certain conditions for an affidavit.- (1) An application made by an assessee shall be accompanied by an affidavit of service stating that two copies of the application together with other papers or affidavit accompanying it have been served on the Standing Counsel authorised to receive notice on behalf of the department concerned, and further stating that the Standing Counsel has been intimated the date of filing in Court of the application. (2) An application made by t....
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.... after such a long time. 8. This revision was filed in 2010 and till date affidavit of service has not been filed. In my view, it is fit case where this Court must reject revision having not been filed in accordance with rules and for non-compliance of requirement of Chapter 27 Rule 5(2) of High Court Rules. 9. Accordingly, this revision has to fail either way. 10. Dismissed accordingly." (emphasis supplied) The Department is not stated to have taken the matter further and it is submitted that the judgment rendered by the learned Single Judge of this Court on the revision aforementioned has attained finality. It is in the above backdrop that the rival submissions may now be noticed. Admittedly, the Tribunal has proceeded to hold that Car Stereos are an accessory to a motor vehicle and therefore chargeable to tax under Entry 18. The view so taken represents a paradigm shift from the opinion which was formed by the Tribunal for A.Y. 2004-05, wherein it accepted the case of the assessee that Car Stereos were electronic goods and therefore liable to be charged to tax under Entry 75. The primary basis for the change in position as struck by the Tribunal ....
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.... for sale in an automobile market or shops or places of manufacture; if the dealer says it to be available certainly such an article or part would be manufactured or kept for sale only as an accessory for the use in the motor vehicle. Of course, this may not also be a conclusive test but it is given only by way of illustration. Undoubtedly some of the parts like axle, steering, tyres, battery etc. are absolutely necessary accessories for the effective use of the motor vehicle. If the test that each accessory must add to the convenience or effectiveness of the use of the car as a whole is given acceptance many a part in the motor car by this process would fall outside the ambit of accessories to the motor car. That would not appear to be the intention of the legislature. Similarly in Free India Cycle Industries and Shadi Cycle Industries cases (supra), the Allahabad High Court held that cycle covers, Rexine Saddle Cover whether part or accessory of vehicle under item 34 of the notification dated April 5, 1961 issued by the State of U.P. under Sections, of the U.P. Sales Tax Act (15 of 1948) with the same reasoning, as was given by the Karnataka High Court to be not accessories. We e....
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....Bros. has contended that a Car Stereo can never be treated as an adjunct, an accompaniment or an addition for the convenient use of another part of the vehicle. It is submitted that car stereos also do not add to the beauty, elegance or comfort for the use of the motor vehicle. He submits that the case before the Supreme Court was essentially in respect of an intrinsic part of a motor vehicle, namely the car seat and its cover, and it was in the aforesaid backdrop that the Court proceeded to hold that the cover of a car seat would be also liable to be treated as an accessory. Sri Singh submits that the observation in paragraph 5 in respect of car stereos and air conditioners was only by way of in illustration and does not represent the ratio decendi of the judgment itself. The second limb of the submission advanced by Sri Singh is based upon the dismissal of the revision of the Department on 6 September 2014. Referring to what the learned Single Judge recorded at that stage he submits that the same clearly amounts to an affirmation of the view taken by the Tribunal in A.Y. 2004-05. In view of the above, Sri Singh would submit, the issue stands settled in favour of the assessee a....
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.... Judge proceeded to hold that there has been a failure to comply with the provisions of the said rule. The learned Single Judge thereafter proceeded to hold in paragraph 9 that the revision was liable to fail "either ways". This Court notes that the judgment rendered by the learned Single Judge on 6 September 2014 primarily proceeded on the ground that the Standing Counsel had been unable to show or establish any error of fact or law in the order of the Tribunal. The revision came to be dismissed upon the learned Single Judge taking the view that no question of law arose therefrom. There is no discussion on the subject as to whether car stereos were liable to be treated as accessories to a motor vehicle or electronic goods. From a reading of the said order it is clear and apparent that there was neither an enunciation of a legal principle or a categorical finding to the effect that car stereos were not liable to be treated as accessories. All that can be deduced from the said order is that in the facts of that case, the learned Single Judge came to hold that no question of law arose from the order of the Tribunal. The judgment of the learned Single Judge, in the opinion of this Cou....
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....or vehicle. Now this much is clear that while rendering judgment in Mehra Bros., the Supreme Court overruled the test formulated by the Karnataka High Court which was to the effect that the accessory must add to the convenience or effectiveness of the use of a car as a whole. The negation of this test as formulated by the Karnataka High Court is of significance. If the test was to be that the accessory must add to the convenience or effectiveness of the use of the car as a whole, it would clearly narrow down the number of article which may be liable to be treated as an accessory. This simply because there would then have to be a direct co-relation and connection between the accessory and its use of being of convenience and effectiveness for the use of the car as a whole. This in the view taken by the Supreme Court was held to be not the correct test. The second aspect of significance which flows from Mehra Bros. is where the Supreme Court specifically refers to stereos and air conditioners and holds that when they are fitted to the vehicle they indeed add to the comfort and enjoyment to the use of the vehicle. Significantly, the test which was laid down by the Supreme Court in Mehr....