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Karnataka High Court · body

2012 DIGILAW 907 (KAR)

State of Karnataka v. Radel Electronic Pvt. Ltd.

2012-11-02

B.V.PINTO, K.SREEDHAR RAO

body2012
JUDGMENT 1. The respondent assessee is a manufacturer of Indian musical instruments like Veena, Tamboora, Shruthi box and Tabala. The Veena manufactured by the assessee has the shape and appearance of the traditional Veena but it appears smaller in size, quite bandy to carry, the parts could be dissembled and assembled. The Veena has Tamboora component, in addition, the Veena has electrical gadgets like mike, amplifier and speaker (for better voice quality and audibility). The electrically powered stringed electronic instrument similar to Veena sold by the assessee is called Sunadavinodhini. The Tamboora manufactured by the assessee is called Saaranga Sparshini. The shape and appearance of the said Tamboora fully matches with the traditional Tamboora. However, the Tamboora manufactured by the assessee has electronic gadgets like mike, speaker and amplifier (for better voice quality and audibility). The Tabala manufactured by the assessee does not bear the shape and appearance of the Tabala but it is in the shape of a tape-recorder, by a switch of a button, the instruments will play the Tabala music which is pre-recorded and fixed in the instruments. Similarly, the Shruthi box will not have the shape and appearance of traditional Shruthi box but it is in the shape of tape-recorder, by switch of a button it will play the shruthi. The different shruthis" are prerecorded and like a tape-recorder, by switch of a button it will play. Both Tabala and Shruthi box have varied buttons to change the shruthi and the tunes. It is the contention of the assessee that above said instruments are Indian Musical Instruments and attract 4% tax as per Schedule (2), item No. 15(1) of the Karnataka Sales Tax Act, 1957. The Department per contra takes a view that it is only a musical instruments and does not conform to the standards, appearance and shape of the Indian musical instruments. On the other hand contends that the instruments are electrical instruments and attracts tax as per Item No. 15 (i) of Schedule 2 Part M of Karnataka Sales Tax Act, 1957. The Assessing Officer has assessed to tax as Indian Musical Instruments and later on gave a notice to the assessee for reassessment. The Assessing Officer pursuant to the reply given by the assessee dropped the proceedings. The Assessing Officer has assessed to tax as Indian Musical Instruments and later on gave a notice to the assessee for reassessment. The Assessing Officer pursuant to the reply given by the assessee dropped the proceedings. The Joint Commissioner of Commercial Taxes (Administrative and Recovery -- 1) exercising suo-muto power held that the above instruments are electronic instruments and does not deserve any concessional tax as Indian Musical Instruments. 2. The Tribunal in appeal has held that the above instruments are Indian Musical Instruments and not electronic instruments. The department aggrieved by the order has filed this revision. 3. This Court permitted the parties to present the music experts to give their opinion. On behalf of the Government, Sri V.V. Radha Krishna, M.A. in Hindustani music, Sri Shiva Kumar Itagi, Engineer in B.E. Electronics and having proficiency in the knowledge of music and one Smt. S.L. Rashmi, a vocalist in Karnataka music. Upon observations of the said instruments which was demonstrated and played in the Court opined that the Shruthi Box and the Tabala have prerecorded music in integrated chips. The vocalist can use the said instruments by a switch of a button. It is their opinion that the above instruments fitted with electronic gadgets have an element of total perfectness in its sound and performance and the said electronic gadgets overcome the defects in skill of the player of the instrument. It is also said that the Tabala and the Shruthi box are basically used by the musicians in their practice they are not used in the public concerts. It is said that a vocalist who is practicing music would find it difficult to have a person who should play a Harmonium and Tabala to facilitate the practice. Therefore, the need of Harmonium player and Tabala player is done away by these instruments. A vocalist can practice music with Tamboora and Veena. It is their opinion that the normal human skills of a proficient musician is required to play these instruments and there is no pre-recorded chips in the said instruments. 4. On behalf of the assessee one Smt. Shyamala G. Bhave, Sri Shimoga Subbanna, Sri H.S. Sudhinder, who are proficient in music and well known popular personalities have filed their affidavits. One Smt. Radhika Narayan, who is a proficient Veena player also assisted the Court in providing the subject knowledge relating to instruments in question. 4. On behalf of the assessee one Smt. Shyamala G. Bhave, Sri Shimoga Subbanna, Sri H.S. Sudhinder, who are proficient in music and well known popular personalities have filed their affidavits. One Smt. Radhika Narayan, who is a proficient Veena player also assisted the Court in providing the subject knowledge relating to instruments in question. Their opinion is almost similar to one expressed by the musicians who represented the appellant assessee. 5. It is the opinion of the musicians who appeared on behalf of the assessee that with regard to Shruthi box and Tabala that the instruments are quite handy and convenient to practice for beginners in music. Otherwise a beginner is confronted with the problem of securing the presence of a Tabala player and Harmonium player which is difficult at the stage of practice. The said instruments on the other hand, helps the vocalist in practice. The said instruments does not bear the shape and appearance of the Shruthi box or the Tabala but they play tunes and music of Indian musical instruments namely Tabala and Shruthi box. It is their opinion that even in order to play the said instruments, to suit the convenience of the vocalist they should have knowledge of operating the said instruments to have a proper symphony. With regard to Veena and Tamboora, it is said that the said instruments are similar to Tamboora and Veena and having an amplifier, speaker and mike and the said instruments are used in concerts widely and the skills required to play the said instruments is similar to that which require to play traditional Tabala and Veena. 6. Item No. 15 (i) of Schedule 2, Part M of Karnataka Sales Tax Act reads thus:-- SI. No. Description of goods which applicable Period for Rate of tax 15.(i) Indian Musical instruments namely, Veena, Violin, Tambura, Mridanga, Ghatam, Khanjira, Flute, Star, Sarod, Santoor, Dilruba, Nadaswara, Dolu, Tabla, Shehnai, Pakwaz, Vichitra Veena, Gotu Vadyam, Morsing, Chande, Triangle, Rudraveena and Sarangi and parts and accessories thereof From 1-4-2011 Four per cent Item No. 4 of Schedule 2 Part-E of Karnataka Sales Tax Act reads thus:--Act 15 of 1998 (1-4-1988 to 31-03-1996) SI. No. Description of goods which applicable Period for Rate of tax 4 Electronic goods other than those falling under any other entry of this Schedule. 1-4-88 to 3 1-3-95 14-95 to 3 1-3-96 Ten per cent. Twelve percent. No. Description of goods which applicable Period for Rate of tax 4 Electronic goods other than those falling under any other entry of this Schedule. 1-4-88 to 3 1-3-95 14-95 to 3 1-3-96 Ten per cent. Twelve percent. Act 5 of 1996 (From 1-4-1996) SI. No. Description of goods which applicable Period for Rate of tax 4 Electronic goods and parts and accessories thereof other than those falling under any other entry of this Schedule. 14-96 to 31-3-98 1-4-98 to 31-3-02 14-02 to 31-5-03 1-6-03 to 31-7-04 From 1-8-2004 Eight per cent. Ten per cent. Twelve per cent. Thirteen per cent. Sixteen per cent. 7. Entry 15(i) to categories the said instruments as totally electronic goods appears to be totally wide of the mark from the concept of electronic goods. The above instruments are very much musical instruments. Veena and Tamboora have the shape and appearance of traditional Veena and Tamboora but in size they differ besides having electronic gadgets like speaker, amplifier and a mike for the sound quality and efficiency. It is the unanimous opinion of the popular and renowned musicians who assisted the Court say that the skills for playing said instruments manufactured by the assessee is totally similar to the skills required for playing the traditional Veena and Tamboora. Merely because the said instruments are fitted with mike, amplifier and speaker, they do not lose the character of Indian musical instruments. Therefore, the said two instruments definitely come within the purview of Article 15(1) and accordingly, they have to be taxed. With regard to Shruthi box and Tabala, although they do not bear the appearance and shape of Tabala and traditional Shruthi box but they play the music of traditional Tabala and Shruthi box. It may be that electronic chips are fitted in the said instruments with prerecorded tunes and sounds but the dominant function of the said instruments is to play the music of Indian musical instruments. The need of skills to play the traditional Shruthi box and Tabala is dispensed with. The vocalist by switch of a button can have the tunes and musical sounds to suit the convenience. It is said that two instruments are of great assistance to the beginners for the music in practice. Merely because the said instruments have prerecorded chips, the dominant function of the said instruments is to play the role of Indian musical instruments. The vocalist by switch of a button can have the tunes and musical sounds to suit the convenience. It is said that two instruments are of great assistance to the beginners for the music in practice. Merely because the said instruments have prerecorded chips, the dominant function of the said instruments is to play the role of Indian musical instruments. The said two instruments are only used in practice and not in concerts. In order to use the said instruments, the vocalist should have necessarily have the basic knowledge of thalas and ragas in order to use the instruments in their practice. Merely because they have shape of a tape-recorder and electronic chips fitted in, it cannot be said that they do not be called as Indian musical instruments because the functional features of the said instruments is very much that of traditional Shruthi box and traditional Tabala. It should be noted that the market for these instruments are very marginal. There is a decline in the musical taste of the people towards the Indian music and Indian musical instruments. It is said that Shruthi box and Tabala manufactured by the assessee are very much necessary for the beginners who practice in music. In fact these instruments would play a tune for the practicing vocalist. Therefore, in order to propagate the object of Entry 15(i) of the Second Schedule of the Karnataka Sales Tax Act, 1957, to promote Indian music and Indian musical instruments, it is just and necessary to hold that all the instruments come under the definition within the purview of Entry 15(i) and should be taxed. Accordingly, the revision is dismissed.