REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5996 OF 2011  (Arising out of S.L.P.(C) No. 22054 of 2010)

M/S EUREKA FORBES LIMITED                         Appellant(s)

VERSUS

STATE OF BIHAR AND ORS                            Respondent(s)

O R D E R

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.   

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 under Section  

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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 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 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 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 – Bihar Sales Tax Act, 1959.  

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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.  

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.  

8. The  issue  that  arises  for  consideration  is  whether  the  article  

vacuum cleaner  could be included within the  Entry  81 of  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,   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  accessories, electric heaters of all varieties.”

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  

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cannot be included within the ambit and scope of Entry 81 in  

view of the fact that the said article is not mentioned specifically  

within the aforesaid Entry.  In order to reinforce his arguments,  

Mr.  S.B.  Sanyal,  learned  senior  counsel  also  relied  upon  the  

subsequent Notification which is issued by the respondents on  

26.7.2000.  He has drawn our attention to the contents of the  

said Notification and particularly to serial no. 247 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  been  

specifically  stated  under  serial  no.  247  specifying  the  rate  of  

sales  tax  at  12%,  it  should  be  assumed  that  the  aforesaid  

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 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  

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fans  and  lighting  bulbs,  etc.’  and  again  it  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  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 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.

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  

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an electrical good.  The said vacuum cleaner is not 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  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 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  therein.  

That could not be the intention of the framers of the Notification  

while exercising the powers under the subordinate 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  

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Federation  of  Andhra  Pradesh  Chambers  of  Commerce  &  

Industry and Ors. Etc. Etc. v. State of Andhra 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 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 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' 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  (Bom.)  also  has  no  

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application to the 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 to interfere with the  

same.  

17.The  appeal  has  no  merits  and  is  dismissed  accordingly  but  

leaving the parties to bear their own costs.  

............................................J. (Dr. MUKUNDAKAM SHARMA)

............................................J.                                          (ANIL R. DAVE)

New Delhi 27th July, 2011.

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