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CASE NO.: Appeal (civil)  3960 of 1999

PETITIONER: State of Maharashtra                                     

RESPONDENT: M/s. Bradma of India Ltd.                                

DATE OF JUDGMENT: 16/02/2005

BENCH: Ruma Pal,Arijit Pasayat & C.K. Thakker

JUDGMENT: J U D G M E N T

RUMA PAL, J.

               The respondent manufactures electronic cash  registers. In addition to the usual functions of a cash register, the  respondent’s models perform various other functions including: i)  Billing and cash memo printing with alpha numeric print out ii)  Cashier-wise cash collection summary and analysis. Iii) Daily  and periodical item-wise analysis iv) Stock analysis v) Re-order  level analysis vii) Salesman-wise sales analysis;  etc.         The question is whether such cash registers are  classifiable under Entry 90 or under Entry 97(b) of Part II,  Schedule (c ) of the Bombay Sales Tax Act, 1959.

       The two competing entries read as follows:- Entry 90.       "Tabulating calculating cash  registering, indexing, card punching  franking, addressing, cheque writing,  statistical paper threading and data  processing (other than computers)  machines and components, parts and  accessories of such machines.

Entry 97(a)  " Computer and components  parts and accessories thereof and tapes  spools  and tapes spools and discussed  therewith and

(b)     Electronic systems, instruments  apparatus and appliances other than those  specified elsewhere and components parts  and accessories of any of them."

The Departmental Authorities contend that the goods are  classifiable under tariff Entry 90.  The respondent assessee  submits that the relevant entry is 97(b). The Maharashtra Sales  Tax Tribunal accepted the department’s submission on the  grounds that the very name of the machine namely "Bradma  Cash Track Electronic Cash Registers" would prima facie  support the conclusion that it was covered by Entry 90, that  admittedly the machine was primarily performing the functions  which are normally carried out by a cash registering machine  and that  the additional functions performed by the respondent’s  models were merely subsidiary to such primary function. It was  held that Entry 90 being the specific Entry dealing with Cash

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Registering Machines, would apply rather than Entry 97(b) which  was the general entry.

At the instance of the Department, the following questions  were referred to the High Court by the Tribunal for its decision  under Section 61(1) of the Bombay Sales Tax Act, 1959:- "1. Whether on the facts and in the  circumstances of the case, the tribunal was  right in holding that "electronic cash register  " sold by the applicant was covered by entry  No.90 of Schedule C part II and not by entry  No.97(b) of Schedule C Part II appended to  the Bombay Sales Tax Act, 1959?

2.      Whether in the facts and in the  circumstances of the case, the tribunal was  right in holding that the various functions  carried on by the machine were only  subsidiary functions and that, therefore, the  cash register was essentially only a cash  register and could not be considered as an  electronic system, appliance or  instrument?"

The High Court answered the questions framed in favour of  the assessee.  Contrary to the opinion expressed by the  Tribunal, the High Court was of the view that Entry 90 was the  general entry and Entry 97(b)  the special entry.  Since there was  no controversy that the electronic registers sold by the assessee  were operated electronically, the High Court  thought that it  would more appropriately fall under Entry 97(b) and not under  Entry 90.   In arriving at this conclusion, the High Court relied  upon a Bench decision of the Andhra Pradesh High Court in  State of Andhra Pradesh Vs. Apex Agency; (1997) 104 S.T.C.  44. We are of the opinion that the High Court was wrong. Both  the Tribunal and the High Court commonly enunciated the  principle that a specific entry would override a general entry.  In  addition we would add, and as has been held in CCE Vs. Wood  Craft Products Limited  1995 (3) SCC 454, 462, resort has to  be had to the residuary heading only when a liberal construction  by the specific heading cannot cover the goods in question.   The  language of Entry 97 (b) clearly shows, by use of the phrase  "other than those specified elsewhere" that it is not only a  residuary entry but also that electronic systems, instruments etc.  may be classified under other entries.  Entry 90 on the other  hand does not contain any words of limitation.  The items  mentioned therein would cover every species thereof irrespective  of the mode of their operation.  Cash registering machines are  specifically mentioned.  In the absence of any limitation or  qualification as to the different kinds of cash registering  machines, there is no reason to read in any such qualification  and limit the entry to particular kinds of cash registering  machines.  It is significant that by contrast, data processing  machines have expressly excluded computers.  Were it not so  excluded, computers would have also fallen within Entry 90. In  fact computers are separately dealt with Entry 97(a).  But the  exclusion of computers from data processing machines would  indicate that the items mentioned in Entry 90 are generic  covering all species of such items.  Given the language of the  two entries we fail to understand how the High Court could have  come to the conclusion that Entry 97(b) was the specific entry  and that Entry 90 was the general entry.  Such an interpretation  goes against the express language of the two entries.  

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There is an additional telling factor.  The assessee had, on  this understanding of the Entries, collected tax in respect of the  cash registering machine sold by it at rates which are applicable  to Entry 90 and not Entry 97(b).  It was only after a Government  Notification was issued under Section 42 of the Bombay Sales  Tax Act reducing the rate of tax in respect of the items falling  under Entry 97(b) from 20% to 4%, that the respondent claimed  classification under that Entry. The decision of the Andhra Pradesh High Court in Apex  Agencies referred to by the High Court does not assist the  respondent. The two competing entries in the Andhra Pradesh  Sales Tax Act, 1957, made a clear demarcation between inter  alia calculating machines (Entry 12) and all kinds of electronic  goods including electronic system [Entry 38(V)] . Entry 38 (V)  was therefore not a residuary entry nor was there any  overlapping.  There was a sharp line of demarcation between the  two entries, a situation which is wholly absent in the two entries  we are required to interpret.  

Reliance was also placed by the respondent on a decision  of the Tribunal in the assessee’s own case (M/s. Bradma of  India Limited Vs. State of Maharashtra Appeal 90/1992,  judgment dated 6.11.1993).  The goods, the classification of  which was in dispute, were electronic weighing scales. The  department did not seek to classify it under the specific heading  namely Entry 69(A) which deals inter alia  with all kinds of  weighing machines.  On the other hand it contended that  it  should be classified under Entry 90 which does not explicitly  refer to weighing machines as it does to cash registers.  The  assessee contended that  the machine was classifiable under  Entry 97(b).  In this context, the Tribunal was of the view that  there was reasonable doubt whether the machine fell under  Entry 90 or under Entry 97(b) and giving the benefit of doubt to  the assessee, the machine was held to be classifiable under  Entry 97(b). The case has no relevance to the facts before us.

The last decision relied upon by the respondent in support  of its stand was the decision of this Court in B.P.L. Limited Vs.   State of Andhra Pradesh (2001) 2 SCC 139.  That case  pertained to Entries of the Andhra Pradesh General Sales Tax  Act, 1957 which we have noted are for the purposes of the  entries in question, materially different. Besides this Court was  only called upon to construe an exemption notification which  granted concessional rates of tax on electronic goods.  In this  context it was held that electronic washing machines were  electronic goods and that the assessee was entitled to the  benefit of the exemption notification. In the circumstances, the decision of High Court is set  aside.  The appeal is allowed and the decision of the Tribunal  confirmed without any order as to costs.