Anatech Instruments Pvt. Ltd. vs Commercial Tax Officer, Sealdah Charge and Others

Kalyan Jyoti Sengupta, J.—This writ petitioner abovenamed has impugned judgment and order of the West Bengal Taxation Tribunal (hereinafter in short as the learned "Tribunal") dated July 12, 2011 (2012) 54 VST 319 by which the Tribunal refused to grant desired relief to the petitioner. The short fact leading to filing of this application is as follows: The petitioner has been carrying on the business of retail distribution amongst others for resale of glass, glassware, optical and scientific equipment. While carrying on this business the petitioner manufactures, processes or extracts in mining the following class of goods or generates or distributes the above materials. As such the petitioner has not only been duly registered under the West Bengal Value Added Tax Act ("the VAT Act") but also under the Central Sales Tax Act as being dealer of glass, glassware, optical and scientific equipment. The petitioner in recent past filed returns for sale of the goods, namely, diesel smoke meters and gas analyzer describing the same sometimes as a scientific equipment or aforesaid goods themselves, and paid requisite amount of tax according to the petitioner''s own classification under the VAT Act at the rate of four per cent. However, it was the contention all along of the petitioner that the above items would fall under entry 54B of Schedule C under item No. (xxviii), however the assessing officer concerned refused to accept such classification and held that the above materials will fall within Schedule CA to the VAT Act to attract the higher rate of levy of tax. This contention was sought to be resolved by bringing action before the Tribunal instead of preferring appeal in recent past. The learned Tribunal did not accept the contention that the aforesaid materials are to be classified within entry 54B, Schedule C of the VAT Act under item No. (xxviii) and rejected the same. Hence the petitioner on earlier occasion came before this court by filing a writ petition in this court, being No. WPTT 38 of 2010 ( Anatech Instruments Pvt. Ltd. Vs. Commercial Tax Officer, Sealdah Charge and Others, ), this court having, found that the judgment of the learned Tribunal was not on proper application of mind with regard to the contention raised by the petitioner as such operation of the same was kept in abeyance and the learned Tribunal was asked to rehear the matter taking note of the description of the goods given in the registration certificate as well as in the returns filed. The learned Tribunal was also given an option to call for any material that is as literal meaning of the goods and description of the goods in some of the returns as scientific instruments. In terms of the said judgment and order learned Tribunal decided the matter afresh and passed the impugned judgment as above.

The learned counsel, Mr. S.K. Chakraborty while repeating his argument made before this court on earlier occasion and also made before the learned Tribunal at the time of fresh hearing that smoke meter and gas analyzer would come within the description of "plant and machinery" and will fall within entry 54B of Schedule C of the VAT Act, according to him the aforesaid equipments are essential machines for manufacturing automobile and without the same the vehicles and cars cannot be put on road in use. Hence the nature and character of the machines and also user thereof would fall without the above classification.

His alternative argument is that if it is a fact then the same should come within the meaning of tools as mentioned in entry 83(c) of Schedule C of the VAT Act. In both the cases chargeable rate is four per cent.

Mr. Abhrotosh Majumder, learned counsel appearing for the State, submits that the judgment and order of the learned Tribunal does not call for any interference as it has been held on examining not only the nature and character of the machine and user thereof but also components thereof. On fact-finding the learned Tribunal concluded that automobile in any stretch of imagination cannot be described as plant and machinery as mentioned in item No. 54B, Schedule C of the VAT Act. In support of his contention he has relied on two Supreme Court decisions rendered in cases of Royal Hatcheries Pvt. Ltd. etc. Vs. State of Andhra Pradesh and another, and Grasim Industries Ltd. Vs. Collector of Customs, Bombay, respectively.

He contends that when the intention of the Legislature is clear upon its plain reading the court would not give any other meaning. He further submits that there is limit to apply the principle of ejusdem generis in all cases. The aforesaid rule of interpretation cannot be applied in this case as there is no foundation.

He contends that the word "plant and machinery" and "tools" should be understood in popular sense not in technical sense and this has been held by the Supreme Court in the case o Royal Hatcheries Pvt. Ltd. etc. Vs. State of Andhra Pradesh and another, as quoted above.

Having heard both the learned counsel and having gone through the impugned judgment of the learned Tribunal we have no hesitation in rejecting the contention of Mr. Chakraborty that smoke meter and gas analyzer can be treated to be plant and machinery as because those are used by the automobile industries for keeping the automobile for checking of the pollution. We are unable to accept the contention of Mr. Chakraborty as because the manufacturers of automobiles used the same it should be treated as plant and machinery. We are of the view that the aforesaid two machines are not required for manufacturing automobile in any sense. The plant and machinery mentioned in that entry are essentially used for manufacturing something else.

The smoke meter and gas analyzer are used only to examine whether the engines of the automobiles conform to the norms of pollution and these instruments and/or machines are pressed into operation before the automobiles are put on sale or for use on road. Therefore, the reasoning given by the learned Tribunal and the contention of Mr. Majumder are absolutely appropriate and rational. It is well-settled law the words used in the statute cannot be read to lead to bring about absurdity. We uphold the contention of the learned Tribunal that the same fall within entry 54B of Schedule C of the VAT Act in order to attract four per cent levy.

However the alternative contention of Mr. Chakraborty needs consideration as to whether the aforesaid two machines can be described to be "tool" or not. The learned Tribunal in its own way has interpreted that the word "tools" should be understood in popular sense without adhering to any technical sense for these two goods. The learned Tribunal has taken the help of Oxford Dictionary and has come to the conclusion that unless the tools are used manually the same cannot fall under the aforesaid entry. The learned Tribunal held that smoke meter and gas analyzer are not used manually. Therefore, in this context we need to set out the description under the heading "tools" as mentioned in entry 83 of Schedule C of the VAT Act.

Tools, that is to say,--

(a) Power tools such as electric drills, tapping machines, hammers, sanders, planners, screw drivers, blowers, routers, winches, grinders, supper abrasives, non-woven abrasives, bonded abrasives other than stone for polishing floor, stone for sharpening carpenters'' instruments, tile polishing blocks and rubbing bricks;

(b) Cutting tools such as taps, milling cutters, reamers, segments, carbide tools, saws, high-speed cut-off machines, shears, nibblers, compound miter saws, masonry cutters, diamond dresser cutter, gear hobbs and gear shaper cutters;

(c) Measuring tools such as micrometers, vernier calipers, feeler gauges, height gauges, slip gauges, snap gauges, pressing gauges, dial thermometers, water meter and measuring steel tapes;

(d) Hydraulic tools such as jacks, pipe-benders, torque wrenches, breakers, cylinders and control valves;

(e) Pneumatic tools such as impact wrenches, rammers, grinders, drills, torque wrenches, filters, regulators and lubricant applicators;

(f) Hand tools such as spanners, pliers, screw drivers, hammers, torque tools, cold chisels, drill bits and burrs, tool bits, hack-saws, hack-saw blades and frames, bank-saw rolls, dice, die-nuts, tools for carpentry, tools for masons and steel files.

It would appear from above that the Legislature has used the word "tool". Here "tool" is a generic term. Indication thereof is clearly established by its various description including measuring tools. It is settled rule of interpretation of the statute that when the words "such as" and "etc." are used the meaning of any expression should be treated as illustrative not exhaustive. This could be found in the decision of the Supreme Court in the case of Royal Hatcheries Pvt. Ltd. etc. Vs. State of Andhra Pradesh and another, in SCC (paragraph 4 in STC) of the said report. We therefore quote the observation of the Supreme Court decision ". . . It is true, the words ''such as'' indicate that what are mentioned thereafter are only illustrative and not exhaustive. . . ." Therefore, the word "tools" is of wide import, but whether the word "tools" also covers smoke meter and gas analyzer, is the point for consideration. The learned Tribunal on fact found that smoke meter and gas analyzer are used in measuring some density and level of various gases like carbon monoxide, carbon dioxide and hydrocarbon and use of electrochemical sensor for oxygen and nitrogen oxide. In view of the finding as above two machines are having measuring functionality.

We think when the Legislature has made it clear that measuring tools of various descriptions that can be operated manually and power operated or otherwise. It seems to us that the learned Tribunal was swayed by the popular meaning and sense of the word "tools". According to us this popular meaning and sense will not be applicable in view of the aforesaid expression. The approach of the learned Tribunal is truly pedantic and orthodox in nature as at present any tool for measuring purposes is operated with modern equipment with the help of power both electrical and electronic. In old days the weighing balances are used manually for the purpose of measuring weight of certain material but at present with specific machine within a fraction of a second it can be measured with automatic function therefore, the very nature and character of the machine is not changed but the mode of operation is changed. In our view any instrument can be operated manually or otherwise but because change of operation of the machine nature and character of utility thereof remains same to exclude the possibility of describing differently.

Under those circumstances we are unable to accept the contention of Mr. Majumder, that this tool must be what have been understood by the learned Tribunal in reasonable interpretation. We think that the interpretation of the learned Tribunal is absurd to accept as there are very rare items now a days which are manually operated in this modern age of technology. In old days carpenters used manually operated saw for cutting or sizing the woods but in modern days there is hardly any carpenter who exerts his physical strength by using the hand driven machine. Therefore, the machines which are used for measuring purposes will come within the fold of the aforesaid words "tools" irrespective of method of operation. Thus the contention of Mr. Chatterjee is upheld and judgment and order of the learned Tribunal is set aside and we hold that the aforesaid smoke meter and gas analyzer will come within the purview of entry 83, Schedule C of the VAT Act and attract the levy of four per cent in stead of 12.5 per cent as wrongly held by the learned Tribunal and the assessing officer. This application succeeds to the extent as above and we direct the authority concerned, if any tax is already paid in excess of four per cent then they shall refund or adjust the same, which is suitable.

Joymalya Bagchi, J.

I agree.