Case: Mehra Bros Vs. Joint Commercial Officer, Madras

The appellant is a registered dealer under Tamil Nadu General Sales Tax Act 1 of 1959 (for short the Act). The appeals relate to the assessment years 1971-72 and 1972-73. The appellant has been carrying on business in the manufacture and sale of auto seat covers, upholstery materials etc., in leather, plastics, cloth and other materials. For the year 1971-72 his total turnover was Rs. 3, 67, 898.21 and the taxable turnover was Rs. 2, 61, 812.74. Similarly for the year 1972-73 his total turnover was Rs. 2, 92, 588.74 and taxable turnover at Rs. 1, 31, 650.05. He claimed car seat covers manufactured and supplied by him to the customers to be chargeable to sales tax at 3 1/2 per cent. The assessing authorities levied sales tax under Section 3(3) read with Item 3 of Schedule I of the Act at 13 per cent and taxed accordingly. This was upheld on appeal by the Assistant Commissioner; on a further revision by the Appellate Tribunal and also by the High Court in the Writ petitions. Assailing the legality thereof these appeals have been filed.

Reasoning: Having given our anxious consideration, with respect, we are of the considered view that the test laid down by the Karnataka High Court that the accessories as a part must contribute for convenience or effectiveness in the use of the car as a whole is not a correct test. In our view the correct test would be whether the article or articles in question would be an adjunct or an accompaniment or an addition for the convenient use of another part of the vehicle or adds to the beauty, elegance or comfort for the use of the motor vehicle or as a supplementary or secondary to the main or primary importance. Whether an article or part is an accessory cannot be decided with reference to its necessary to its effective use of the vehicle as a whole. General adaptability may be relevant but may not by itself be conclusive. Take for instance stereo or air-conditioner designed and manufactured for fitment in a motor car. It would not be absolutely necessary or generally adapted. But When they are fitted to the vehicle, undoubtedly it would add comfort or enjoyment in the use of the vehicle. Another test may be whether a particular article or articles or parts, can be said to be available for sale in an automobile market or shops or places of manufacture; if the dealer says it to be available certainly such an article or part would be manufactured or kept for sale only as an accessory for the use in the motor vehicle. Of course, this may not also be a conclusive test but it is given only by way of illustration. Undoubtedly some of the parts like axle, steering, tyres, battery etc. are absolutely necessary accessories for the effective use of the motor vehicle. If the test that each accessory must add to the convenience or effectiveness of the use of the car as a whole is given acceptance many a part in the motor car by this process would fall outside the ambit of accessories to the motor car. That would not appear to be the intention of the legislature. Similarly in Free India Cycle Industries ( 1970 (26) STC 428 (All)) and Shadi Cycle Industries cases ( 1971 (27) STC 56 (All)) the Allahabad High Court held that cycle covers, rexine saddle cover whether part or accessory of vehicle under Item 34 of the notification dated April 5, 1961 issued by the State of U.P. under Sections 3, 3-A of the U.P. Sales Tax Act (15 of 1948) with the same reasoning, as was given by the Karnataka High Court to be not accessories. We express that the Allahabad High Court also has not laid down the testThus considered we hold that car seat covers or upholstery are accessories as an addition; an adjunct; an accompaniment for comfortable use of the motor vehicles or for adding elegance to the seat. Admittedly the appellant manufactured car seat covers and upholstery for sale as an automobile part in the regular course of business. Therefore, they are exigible to sales tax at 13 per cent under Entry 3 of Schedule I read with Section 3(3) of the Act. Therefore, we do not find any ground warranting interference.