LexSTATE OF ANDHRA PRADESH AND ANR. versus M/S CONCAP CAPACITORS, BALANAGAR, HYDERABAD AND ORS.
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A STA TE OF ANDHRA PRADESH AND ANR. v. MIS CON CAP CAP A CITO RS, BALANAGAR, HYDERABAD AND ORS. B OCTOBER 12, 2007 [C.K. THAKKER AND AL TAMAS KABIR, JJ.] ,\- Sales Tax-On 'Capacitors '-The item classified as 'electronic f c good' by Electronic Commission-By Government Orders, electronic items exigible to concessional rate of tax-Asses sees claiming concessional rate of tax on 'Capacitors '-Claim negated by Authorities-Tribunal holding the item as an 'electric good' and remanding the case for determination to the Authorities-High Court D holding the item exigible to concessional tax as 'electronic good'- On appeal, held: 'Capacitor' is an 'electronic good' and hence is to be taxed at concessional rate-Ta.,y has to be levied on the basis of ~ classification done by Electronic Commission-However, if assessees have collected tax at higher rate from its customers, Revenue to take ),,... E appropriate steps for recovery of such amount-Andhra Pradesh General Sales Tax Act, 1957-Central Sales Tax Act, 1956-Doctrine of Unjust Enrichment. The respondent-assessees were manufacturers, dealers or traders of electronic goods. They claimed concessional rate of tax F on the item 'Capacitors' as 'electronic goods', in terms of various Government Orders. In some cases the authorities treated the r- 'Capacitors' as 'electronic goods', while in other cases it did not. In .... the cases, where the 'Capacitors' were treated as 'electronic goods', the assessees challenged the same. The Authorities decided the G assessees were entitled to concessional rate on the 'Capacitors'. When the matters were taken to Sales Tax Appellate Tribunal at the instance of Revenue, it held that the Capacitors were 'electric goods' and not 'electronic goods' and remanded the matter to the Assessing Authorities, giving opportunity to the assessees to prove H 140 I ,,.. 1- ~ >- _) STATE v. MIS. CON CAP CAPACITORS, BALANAGAR, 141 HYDERABAD that the item was an 'electronic good'. High Court set aside the order A of the Tribunal holding that 'Capacitors' would fall under the category of'electronic goods'; and that once the item was specifically mentioned in the list of electronic items prepared by the Electronic Commission and Government Orders the Tribunal was required to test whether the item found place in the list and should not have B undertaken further inquiry. In appeal to this Court, appellant-Revenue interalia contended that the order of the Tribunal was not a final order and therefore, it could not have been disturbed by the High Court; and that since the c assessee had collected the amount of tax at higher rates from the customers, the levy of tax on concessional rates would lead to 'unjust enrich.ment' to the assessees. Disposing of the appeal, the Court HELD: 1.1 The item 'Capacitors' is subject to payment of tax D at a concessional rate. The list prepared by Electronic Commission expressly contained an item 'Capacitors'. In view of specific reference to 'Capacitors', the High Court was right in relying on the said item and in holding that 'Capacitors' could be said to be 'electronic goods' and was covered by a concessional rate of tax E under Andhra Pradesh General Sales Tax Act, 1957. [Paras 15 and 26] [149-G-H; 154-A]. State of Andhra Pradesh v. Amara Raja Batteries, (1998) 111 STC 664 (AP) and India Extrusion v. Commission of Commercial Taxes, F A.P., Hyderabad, (2001) 124 STC 474., referred to. 1.2. The High Court, was right in observing that when the Electronic Commission had prepared a list which contained the item 'Capacitors', it had to be accepted by the Revenue and tax can be levied only on the basis of such classification. High Court was also G right in indicating that when the item has been specifically included in the list prepared by Electronic Commission, the TribunaJ could not have applied 'functional test', 'operating principle' or 'user test'. A limited inquiry which was required to be made by the Tribunal was H 142 SUPREME COURT REPORTS (2007] 11 S.C.R. A whether the item had been included in the list prepared by the Electronic Commission. If any item is included in the said list, it has to be treated as such and tax has to be levied on that basis. But if the item is not included in the list, it is open to the Tribunal to consider its placement on the basis of 'functional test' as to whether such item B could be said to be 'electronic goods'. The
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