Case: Annapurna Carbon Industries Co Vs. State Of Andhra Pradesh

Cinematographic equipment, including cameras, projectors, and sound recording and reproducing equipment, lenses, films and parts and accessories required for us therewith2. As indicate above, the very name of the arc carbons, as commercial commodities, seems to attach the word "cinema" to them because of the use to which they are generally put. The High Court referred to the fact that the appellants had not produced their account books to show that they had been purchased by persons other than those who ran cinemas or for any other use. Of course, it is very difficult to identify a taxable commodity merely by the use to which it may be put. Nevertheless, it appears that the entry under consideration links the taxable object with its general or ordinary use. The taxing authorities were, therefore, compelled to consider the use which is generally made of the arc carbons. They had concluded that the common or ordinary use of the arc carbons was that they exuded the powerful light cast, through the projectors, on cinema screens.      3. It was pointed out that the Sales Tax Appellate Tribunal, the final departmental authority under the Act, had allowed an application for adducing expert evidence to determine the question whether are carbons manufactured by the appellant company could be covered by the entry under consideration. It, however, appears that, before further evidence could be taken, at the appellant stage, on that subject, a decision of the Andhra Pradesh High Court, in the State of Andhra Pradesh v. Srimathi Nidmarthi Saraswathi Devi, was brought to the notice of the tribunal. There, the High Court has held that such are carbons are covered by the fourth entry in the First Schedule of the Act. Hence, the tribunal dismissed the appeal without taking further evidence.      4. In the High Court, two decisions cited on behalf of the appellants were : Deputy Commissioner of Commercial Taxes, Madhurai Division, Madhurai v. Ravi Auto Stores, and State of Madras v. Indian Oxygen Ltd. The High Court pointed out that in both these cases what was decided was whether "welding electrodes", considered by themselves, were "electrical goods" falling within entry 41 of Schedule I of the Madras General Sales Tax Act. It was held, in these cases, that they were only copper rods which were melted by electrical power in the process of welding. Neither the use of the term "electrode" to describe them, suggesting a connection with electricity, nor their utilisation in a process involving application of electrical power could convert them into "electrical goods" as contemplated by the entry in the Madras Act. The High Court rightly observed that these decisions has no bearing whatsoever upon the very different entry in a schedule of an entirely different Act of a different State.

Reasoning: 6. We do not think that any useful purpose is served by multiplying cases relating to entries which are so very different and could have only a very remote bearing, if any, upon any reasoning which could be adopted to support the submission that the arc carbons, under consideration here, fall within the relevant entry 4 of Schedule I of the Act. The meaning to this entry can only be satisfactorily determined in the light of the language of the entry itself considered in the context in which it occurs9. Our object in indicating the nature of entries, amidst which entry No. 4 occurs, is to show that some precision has been attempted in making the entries. When it was intended to confine the entry to particular gadgets and "parts thereof" the entry said so. Of course, even where an entry relates to parts manufactured for us for a particular kind of instrument or gadget only, the article, manufactured to serve as a part of a particular kind of apparatus, would not cease to be covered by the intended entry simply because a purchaser makes some other use of it. We have to find the intention of the farmers of the schedule in making the entry in each case. The best guide to their intentions is the language actually employed by them10. We find that the term "accessories" is used in the schedule to describe goods which may have been manufactured for use as an aid or addition11. It will be noticed that the entry we have to interpret includes "parts" as well as "accessories" which are required for use in projectors or other cinematographic equipment. We think that the Andhra Pradesh High Court correctly held that the main use of the arc carbons under consideration was duly proved to be that of production of powerful light used in projectors in cinemas. The fact that they can also be used for searchlights, signalling, stage lighting, or where powerful lighting for photography or other purposes may be required, could not detract from the classification to which the carbon arcs belong. That is determined by their ordinary or commonly known purpose or user. This, as already observed by us, is evident from the fact that they are known as "cinema arc carbons" in the marketThis finding was enough, in our opinion, to justify the view taken by the Andhra Pradesh High Court that the goods under consideration are covered by the relevant entry No. 4.