Holding

A vacuum cleaner is an electrical good within the meaning of Entry 81 and is liable to tax at the higher rate of 12%.

Summary

M/s Eureka Forbes Ltd., the appellant, challenged the assessment of sales tax on its vacuum cleaners for the years 1990-91 to 1993-94, contending that the product should be taxed at the standard 8% rate. The State of Bihar, relying on Entry 81 of the Notification dated 26-12-1977 issued under Section 12 of the Bihar Finance Act, levied tax at 12% treating the vacuum cleaner as an electrical good. The assessing officer, the Commercial Taxes Tribunal, and the Patna High Court upheld the higher rate. The appellant argued that vacuum cleaners were not specifically listed in Entry 81 and therefore should be excluded, also relying on a later 2000 notification that listed vacuum cleaners with a 12% rate. The Supreme Court held that the term "electrical goods" in Entry 81 is inclusive, and a vacuum cleaner, being machinery run by electricity, falls within that category and is not excluded. Consequently, the 12% tax rate was affirmed. The appeal was dismissed.

Issues considered

Whether a vacuum cleaner is covered by Entry 81 of the Notification dated 26-12-1977 issued under Section 12 of the Bihar Finance Act and thus liable to tax at 12%.

Legislation cited

Bihar Finance Act, 1981s. 12, s. 17(2)(a), s. 17(2)(b)
Bihar Sales Tax Act, 1959
Bihar Sales Tax Rules, 1983

Subjects

sales taxBihar Finance ActEntry 81electrical goodsvacuum cleanertax rate interpretationassessment proceedingsnotification

Judgment

[2011] 9 S.C.R. 540
, - ......
A M/S EUREKA FORBES LIMITED
v.
STATE OF BIHAR AND ORS
(Civil Appeal No. 5996 of 2011)
JULY 27, 2011 :.
B ,
[DR. MUKUNDAKAM SHARMA AND
ANIL R. DAVE, JJ.]

Sales Tax - Bihar Finance Act, 1981 read with Bihar
c Sales Tax Rules, 1983 - Assessment proceedings under -
Assessment years 1990-91, 1991-92, 1992-93 and 1993-94
- Assessee-appellant was levied tax on its product - vacuum
cleaner, at the rate of 12% treating it as electrical goods as
against the contention of the appellant that vacuum cleaner ~
<
D is taxable at the rate of 8% - Whether vacuum cleaner is an A

electrical good or instrument and, therefore, it falls within Entry
81 of the Notification dated 26-12-1977 issued by the
respondents under Section 12 of the Bihar Finance Act- Bihar
Sa/es Tax Act, 1959 and thus taxable at the rate of 12% -
E Held: Entry 81 of the said Notification provides that electrical
goods, instruments, apparatus and appliances would have to
be levied 12% tax effective from 1-4-1982 - However, when
it states of electrical goods, the same appears to be an
inclusive description - Vacuum cleaner is a machinery run
by electricity and therefore, is an electrical good - It is not
~ ·-
F
excluded from the purview and ambit of Entry 81 in any
manner as is apparent from a bare reading of the contents
of Entry 81 - Plea of appellant that since vacuum cleaner is
not specifically included within the Entry 81, therefore, it
should be deemed to be excluded cannot be accepted in view
G of the fact that none of the electrical goods, instruments, ' '-.'-
apparatus, which is included in the said Entry is specifically
mentioned and if that interpretation is accepted, all electrical
goods would have to be excluded because they are not
specifically mentioned therein - That could not be the
H 540
EUREKA FORBES LIMITED v. STATE OF BIHAR 541
AND ORS.
7'~.

intention of the framers of the Notification while exercising the A
powers under the subordinate legislation - If such an
interpretation is accepted, entire Entry 81 would be rendered
otiose.
The Federation of Andhra Pradesh Chambers of
' -.I,
Commerce & Industry and Ors. Etc. Etc. v. State of Andhra B
Pradesh and Ors. Etc. Etc., (2000) 6 SCC 550: 2000 ( 2 )
Suppl. SCR 151; Eureka Forbes Ltd. v. State of Bihar and
Ors., 2000 (119) STC 460 (Pat.) and Indian National
Shipowners' Association v. Union of India (UO/) through
Secretary, Dept. of Revenue, c
Ministry of Finance Govt. of India and Ors., 2009 (14) STR
289 (Born.) - distinguished.
> .. Case Law Reference:
_,!._
D
2000 (2) Suppl. SCR 151 distinguished Para 15
2000 (119) STC 460 (Pat.) distinguished Para 15
2009 (14) STR 289 (Born.) distinguished Para 15
CIVIL APPELLATE JURISDICTION : Civil Appeal No. E
5996 of 2011.
From the Judgment & Order dated 26.02.2010 of the High
Court of Judicature at patna in Civil Writ Jurisdiction Case No.
... J.;., 1351 of 2008.
F
S.B. Sanyal, Alok Kumar for the Appellant.
Gopal Singh, Rudreshwar Singh for the Respondents.
The following order of the Court was delivered

...,, J ORDER G

1. Leave granted.
2. The present case relates to assessment of the Appellant
herein concerning assessment years 1990-91, 1991-92, 1992-
93 and 1993-94. H
542 SUPREME COURT REPORTS [2011] 9 S.C.R.

- -'<-
A 3. The assessment proceedings were initiated under the
Bihar Finance Act, 1981 read with Bihar Sales Tax Rules, 1983.
Notices under Section 17 (2)(a) of the Act were issued to the
assessee for examination of books of accounts. The said
books of accounts were produced and assessment orders
B under Section 17 (2)(b) of the Act were passed. In the said • .
assessment order, the assessee was levied tax on vacuum
cleaner at the rate of 12% treating it as electrical goods as
against the contention of the Appellant that vacuum cleaner,
which is an article dealt with by the Appellant, is taxable at the
c rate of 8%.
4. The Assessing Officer by the assessment order rejected
the aforesaid contention of the assessee while holding that the
assessee is liable to pay tax on vacuum cleaner at the rate of
12%. Being aggrieved by the aforesaid findings and ~ <
D assessment order passed by the Assessing Officer, the
Appellant filed appeals which were entertained and disposed
of dismissing the said appeals.
5. Being aggrieved by the aforesaid order passed in
appeals, the assessee preferred Revision Applications before
E the Commercial Taxes Tribunal. By an order passed on
15.4.2004, the Tribunal dismissed the said Revisions holding
that the vacuum cleaner is an electrical good or instrument and,
therefore, it falls within Entry 81 of the Notification dated
26.12.1977 issued under Section 12 of the Bihar Finance Act .r ~

F - Bihar Sales Tax Act, 1959.
6. Being aggrieved by the aforesaid order of the Tribunal,
a writ petition was filed, which was again dismissed by the High
Court by judgment and order dated 26.2.2010 as against which
this appeal was filed.
G
y
7. We have heard the learned counsel appearing for the
parties in this appeal, who have taken us through the records.
In the light of their submissions and on perusal of the records,
we propose to dispose of this appeal by recording our reasons.
H 8. The issue that arises for consideration is whether the
EUREKA FORBES LIMITED v. STATE OF BIHAR 543
AND ORS.
~-i

article vacuum cleaner could be included within the Entry 81 of A
the Notification dated 26.12.1977 issued under Section 12 by
the respondents.
9. Entry 81 of the said notification reads as follows:-

' ~
~
"81. Electrical goods, instrument, apparatus and
appliances including electric fans and lighting bulbs,
B

electric earthware and porcelain and all other accessories
excluding electric motor, dry cell batteries, torch, torch
bulbs, exhaust fans, air circulators, and spare parts and
_j
accessories, electric heaters of all varieties." c
10. Counsel appearing for the Appellant has submitted
before us that particular article, namely, vacuum cleaner, which
is 'the article dealt with by the appellant in the course of its
~ ... business cannot be included within the ambit and scope of Entry
,.I.
81 in view of the fact that the said article is not mentioned D
specifically within the aforesaid Entry. In order to reinforce his
arguments, Mr. S.8. Sanyal, learned senior counsel also relied
upon the subsequent Notification which is issued by the
i respondents on 26.7.2000. He has drawn our attention to the
contents of the said Notification and particularly to serial no. 24 7 E
where vacuum cleaner is specifically mentioned with the rate
of sales tax payable@ 12%. It is submitted by him that since
in the subsequent Notification in 2000, vacuum cleaner has
... .4-..., been specifically stated under serial no. 247 specifying the rate
of sales tax at 12%, it should be assumed that the aforesaid F
vacuum cleaner having not been specifically mentioned in the
earlier Notification under Entry 81, would be liable for the
purpose of tax at 8% being an unspecified good. We have
considered the said submissions in the light of the records. The
Entry 81, which we have extracted above, provides that G
....... .I -. electrical goods, instruments, apparatus and appliances would
have to be levied 12% tax effective from 1.4.1982. However,
when it states of electrical goods, the same appears to us to
be an inclusive description as it emphasises on the word
'including electrical fans and lighting bulbs, etc.' and again it H
544 SUPREME COURT REPORTS (2011] 9 S.C.R.

A excludes from its purview electric motor, dry cell batteries, etc. - .,,

11. A reference to Section 12 of the Act would also make
the position clear for Section 12 says in the proviso that the
State Government can issue a notification fixing higher rate than
eight percentum by specifying such goods or class of goods
B or description of goods. Therefore, by issuing a notification
~
under Section 12, a higher rate than of 8% could be levied by
the State Government on a class of articles of goods or goods
specifically mentioned therein. The aforesaid position would be
more explicit when we look to the Entries 116 and 127 of the
c same Notification of 1977 wherein by the Entry 116, articles
like refrigerators, air-conditioners, air-coolers and air-
conditioning plants, etc. have been taken out from the items
"electrical goods" under Entry 81 by levying higher rate of tax.

D
12. That the vacuum cleaner dealt with by the appellant is . ~
an electrical good, there is no dispute raised for in the Special ...
Leave Petition itself it is stated by the Appellant that the vacuum
cleaner is a machinery which is run by electricity. Therefore, it
is an agreed and uniform case of the parties that vacuum
cleaner is an electrical good. The said vacuum cleaner is not
E excluded from the purview and ambit of Entry 81 in any manner
as is apparent from a bare reading of the contents of Entry 81.
13. We are concerned with the assessment years prior to
2000 and, therefore, the Notification issued on 26.7.2000 shall
.;A ..,
F have no relevance or application to the facts of the present
case.
14. Counsel appearing for the Appellant has submitted that
since vacuum cleaner is not specifically included within the
Entry 81, therefore, it should be deemed to be excluded. We
G are unable to accept the aforesaid contention in view of the fact
that none of any electrical goods, instruments, apparatus, which
"'
is included in the said Entry is specifically mentioned and if that
interpretation is accepted, all electrical goods would have to
be excluded because they are not specifically mentioned
H therein. That could not be the intention of the framers of the
EUREKA FORBES LIMITED v. STATE OF BIHAR 545
ANO ORS.
Notification while exercising the powers under the subordinate A
legislation. If we also accept such an interpretation, in our
opinion, entire Entry 81 would be rendered otiose.
15. Learned counsel also relied upon a decision of this
Court in The Federation of Andhra Pradesh Chambers of
Commerce & Industry and Ors. Etc. Etc. v. State of Andhra B
Pradesh and Ors. Etc. Etc. reported in (2000) 6 SCC 550,
wherein it is laid down in para 7 that taxing statutes are to be
strictly construed and that nothing could be added to what is
stated in the statute itself. We agree and accept the aforesaid
principles of law laid down by this Court. That is a settled C
position of law, but according to us, the said decision in no way
helps the Appellant in view of the reasoning given by us for the
findings arrived at by us. So far the decision of the Division
Bench of the Patna High Court in Eureka Forbes Ltd. v. State
of Bihar and Ors. reported in 2000 (119) STC 460 (Pat.) is D
concerned, the same is also not applicable to the facts of the ·
present case as the same relates to a case of re-opening of
assessment on the ground of change of opinion and therefore,
the said case also has no application at all. The decision of
the Bombay High Court in Indian National Shipowners' E
Association, a Company having its registered office through its
Deputy Secretary and Mr. Badrinath Durvasula having his place
of business v. Union of India (UOI) through Secretary, Dept. of
Revenue, Ministry of Finance Govt. of India and Ors. reported
in 2009 (14) STR 289 (Born.) also has no application to the F
facts of the present case.
16. We have given our reasons for arriving at our findings
and in our considered opinion, the decisions given by the High
Court as also by all other authorities are correct decisions,
- recording cogent reasons, and, therefore, we are not inclined G
" " to interfere with the same. ~
17. The appeal has no merits and is dismissed accordingly
but leaving the pa'rties to bear their own costs.
B.B.B. Appeal dismissed. H