ORDER
B. Subhashan Reddy, J.
1. This batch of Tax Revision Cases arise under The Andhra Pradesh General Sales Tax Act (hereinafter referred to as ‘the APGST
Act’). In these cases, there is an important question regarding the levy of sales-tax on the sale of washing machines sold by M/s. BPL Limited.
2. In 2 cases, orders were passed by the Assistant Commissioner (CT), Intelligence, Abids Division, Hyderabad, while in other 5 matters final assessment orders were passed by the Commercial Tax Officers of Chikkadpally and Ashoknagar Circles of Hyderabad. The said authorities had passed orders levying the sales-tax at the rate of 10% as against the exigibility at the rate of 4% claimed by the assessees. 7 appeals were preferred to the Appellate Deputy Commissioner (CT), Hyderabad Division, but the said levy was upheld. Further appeals were filed before the Sales Tax Appellate Tribunal, which also by its common order dated 16-4-1996 upheld the assessment of tax by the authorities below. Hence, these Tax Revision Cases.
3. The assessees are dealers in washing machines, which are either fully automatic or semi-automatic. The dispute with regard to the quantum of levy of sales-tax is related to fully automatic washing machines, It is the plea of the assessees that since auto control is accomplished by using computer units, the fully automatic
washing machine can no longer be classified along with an ordinary electric washing machine under Entry 38(iv) of the First Schedule to the APGST Act and that it has to be classified as ‘electronic goods’ for exigibility at concessional rate by virtue of Government Memo N0.23718/CT-II/89, dated 1-6-1989. The question arises is as to whether the fully automatic washing machines are to be classified as electronic goods for eligibility for concessional rate under APGST Act and Central Sales Tax Act. The assessees had paid the tax at 4% on the ground that the automatic washing machines come within the ambit of ‘electronic goods’. It is needless to mention that if the automatic washing machines come within the ambit of electronic goods, then, as a necessary corollary, it attracts concessional rate of 4%. Otherwise, the levy of 10% sales tax as done by the authorities has to be affirmed.
4. Fully automatic washing machines work on Fuzzy Logic Computers Programme and are microcomputer controlled. The micro computer sensors the weight of the wash load an the type of fabric that predominates in order to automatically select appropriate washing method. Similarly, the computer evaluates and carries-out the best way to clear any kind of wash load, set the water level taking right amount of detergent and also to start washing at staggered intervals. The spin cycles placed at the bottom of the Washing Machines which rotates the water and their contents are also controlled by a microcomputer. In a nutshell, the washing machines are totally controlled and operated by the micro processor technology. The contention is that all types of electronic goods, whether they are enumerated in any of the Schedules or not, are to be treated as electronic goods, provided they run on electronic principles. Reliance is placed on the decision in Mectronics Pvt. Ltd. v. State of A.P., (1988) 6 APSTJ 161, wherein it was held that
electronic calculators functioning as they do with the aid of silicon chips and dry cells, are to be classified as electronic systems and not as mere calculating machines, It is the case of the assessee that fully automatic washing machines cannot be classified as ordinary washing machines as the run on advanced computer technology. Another decision relied upon by the assessee is Cutpast Abserve Tools Private Limited v. State of Tamil Nadu, 57 STC 40, wherein a distinction was made between an electronic grinder and an electric grinder. The Governmental Order which the assessees rely on is G,O. Ms. No.864, Revenue, dated 7-9-1993, which was applicable to the relevant period and which contemplaled levy of 4% sales-tax on the electronic goods and the electronic goods were defined as electronic systems, instruments, appliances, apparatus etc., operating on electronic principles and all types of electronic components, parts and materials and include ….
5. It is the argument on behalf of the assessees that what constituted electronic principles has not been defined in the Governmental Order and therefore, applying the user test, any electronic equipment which operates on electronic principles must be held eligible for concessional rate in terms of G.O. Ms. No.864 and that since the mechanism of micro processor, which controls operation of the fully automatic washing machines, is based on electronic principles, the washing machine itself is to be considered as electronic goods.
6. The case of the Revenue is that merely by having the micro processor in the control panel, the washing machine itself does not become an electronic machine and that washing machines are specifically mentioned in sub-Entry (iv) of Entry 38 of First Schedule to the APGST Act and that the said entry encompasses washing machines of all types, whether they are semi or fully automatic.
7, A perusal of the list prepared by the Electronic Commissioner reveals that the electronic washing machines are not mentioned therein as such. The assessees stress on 2 entries in the said list, i.e., Entry 9.4, which relates to micro-computers and Entry 1.65, which relates to other consumer electronic products, and it is their argument that as basically washing machines have to be operated on electronic principles, they have to be classified as electronic machines. But the question is not the turnover on the sale of micro-computers, but the turnover relates to sale of washing machines of which the micro computer is a part and washing machine can by no stretch of imagination be called as a micro computer. Coming to Entry 1.65 relating to ‘other consumer electronic aids/products’ it is to be noted that the goods must basically be electronic in nature. While the control panel is certain electronic in the sense that it involves silicon chips and semi conductors, the washing machine itself does not operate on principles of electronics. On the other hand, it operates on the principles of centrifugal action of force, which action takes place through the spin cycles placed at the bottom of the washing machine, which rotates the water and their contents. So, basically a washing machine is a centrifugal machine and all other developments and improvements only add to the better and finer operation of the machine, but the basic action can never be called electronic, as for example a Television can always be called electronic. In a Television, whole instrument works on principles of electronics, as compared to the fully automatic washing machine, in which electronics only aids towards achieving a sophisticated function of the centrifugal machine, which by rapid rotation spreads, substance of different densities. Therefore, when the machine is electro-mechanical in its intrinsic nature, it cannot be fitted into the residual entry of ‘other consumer electronic aids/products’. The washing machine works on the
principle of the centrifugal, which is electro-mechanical in nature, but not electronic, and any amount of sophisticated control of the machine by installing microcomputer in the control panel, cannot make the machine electronic in nature, i.e., the machine cannot be said to be operated on the principles of electronics.
8. In view of what is stated supra, we affirm the view taken by the tax assessing authorities and the Sales Tax Appellate Tribunal. In the result, the Tax Revision Cases are dismissed.