M/S. ELECTRO OPTICS (P) LTD. versus STATE OF TAMIL NADU

Citation: [2016] 3 S.C.R. 500 · Decided: 26-02-2016 · Supreme Court of India · Bench: SHIVA KIRTI SINGH · Disposal: Disposed off

Judgment (excerpt)

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[2016] 3 S.C.R. 500 
MIS. ELECTRO OPTICS (P) LTD. 
v. 
STATE OF TAMIL NADU 
(Civil Appeal No. 10554of2010) 
FEB RU ARY 26, 2016 
[SHIVA KIRTI SINGH AND R. BANUMATHI, JJ.) 
Tamil Nadu General Sales Tax Act, 1959 - Entry 50, Part B 
of Schedule I, Entry 14, Part F of Schedule I - Sale of electronic 
goods (survey instruments) imported from other countries -
Classification of. under Entry 50, Part B of Schedule L chargeable 
@ 3% or Entry 14, Part F of Schedule I. chargeable @ 16% -
Held: Electronic survey instruments are covered by Entry 14, Part 
F of Schedule. 
Disposing of the appeals, the Court 
HELD: 1.1 Part-B of the Schedule covers various kinds of 
goods such as agricultural products, vegetable oils, kerosene, 
aluminium domestic utensils, raw wool, hosiery goods, gold and 
silver articles, cycles, tractors, different electronic items, 
television sets, gramophones, all chargeable at the rate of3%. 
In this background, Entry 50 of Part-B is meant to accommodate 
only such left over electronic system, apparatus etc. which are 
not specified elsewhere in the Schedule and are therefore, 
chargeable at the rate of 3%. Clearly, if specified elsewhere and 
chargeable at a different rate, they cannot be included under Entry 
50. This conclusion is further strengthened by a look at some of 
the entries in Part-F, just preceding Entry 14. Entries 10, 11, 12 
and 13 cover goods chargeable at the rate of 16%, such as 
typewriters, teleprinters, tabulating, calculating machines and 
duplicating machines etc. In all these four entries there is a 
specific exclusion of electronic variety of these machines. On 
the other hand in relevant Entry no. 14 such exclusion of 
electronic variety of any of the machines and apparatus such as 
survey instruments is conspicuously missing. Clearly the intended 
effect is deliberate so as to include binoculars, monoculars, survey 
instruments etc. of all varieties, be they manual or electronic. 
Had the intention been different, in Entry 14 also exclusion of 
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MIS. ELECTRO OPTICS (P) LTD. v. STATE OF TAMIL NADU 
501 
'electronic' survey instruments could have been inserted and 
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specified as in Entry Nos. 10 to 13 in respect of other different 
machines or instruments. Hence, even electronic survey 
instruments are covered by Entry No. 14 in Part-F of the First 
Schedule of the Act. [Para 4) [504-E-H; 505-A-B) 
1.2 The penalty is imposable by the assessing authority 
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under Section 12 of the Act, both, for failure to submit return or 
for submission of incorrect or incomplete return. Appellant, in 
the eyes of the Authorities submitted incorrect return leading to 
imposition of penalty in accordance with relevant clauses of 
Section 12. Considering that the situation of dispute arose on 
account of amendments in the Schedule in 1993 and was confined 
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only to immediate two assessment years and also considering 
that the appellant had a good arguable case even in this Court 
which had stayed the.penalty orders, the return submitted by the 
appellant was on account of bona fide belief in correctness of 
appellant's stand that the goods in question were chargeable only 
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at the rate of 3%. In the facts of the case, it would not be proper 
to hold that the appellant had submitted a return which was 
incorrect to its knowledge or belief. Only after the outcome of 
the legal dispute by virtue of this judgment, the authorities can 
be justified in holding henceforth that the return was incorrect. 
In such a situation it would not be just and proper exercise of 
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discretion to hold the appellant guilty of submitting incorrect 
return so as to attract penalty for the same. Hence, in the peculiar 
facts of the case and in the interest of justice, the balance dues of 
penalty is set aside. However, the penalty already paid by the 
appellant would not be refunded.[Para 8] [506-H; 507-A-D] 
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Mis BPL Ltd. v. State of Andhra Pradesh (2001) 2 SCC 
139 : 2001 (1) SCR 195 - distinguished. 
Mis Hindustan Steel Ltd. v. State of Orissa (1969) 2 
SCC 627 : 1970 (1) SCR 753; Co111111issio11er of Sales 
Tax, Uttar Pradesh v. Sanjiv Fabrics (2010) 9 SCC 630 
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: 2010 (11) SCR 627 - referred to. 
Case Law Reference 
2001 (1) SCR 195 
1970 (1) SCR753 
2010 (11) SCR 627 
distinguished 
referred to 
referred to 
Paras 
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502. 
SUPREME COURT REPORTS 
(2016] 3 S.C.R. 
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CIVIL· APPELLATE JURiSDICTION : Civil Appeal No. I 0554 
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