Installation cables, Outlets modules, and Fibre Optic cables fall under Part E of the Second Schedule under Karnataka Sales Tax Act: Supreme Court [Read Judgement]

The Supreme Court of India in a recent judgement has held that the classification of Installation cables, outlet modules, and fibre Optic cables Under Part E of the Second Schedule under the Karnataka Sales Tax Act, 1957 is correct.

A bunch of special leave petitions were filed by M/s. Texonic Instruments, the petitioner. The Court found no reason to interfere with the impugned judgment which holds that installation cables, outlet or connection modules, patch cords, patch panels, network cards, fibre optic cables etc. are not covered in Entry C.20 (ii)(b) of the Second Schedule to the Karnataka Sales Tax Act, 1957.

In the cases of Collector of Central Excise v. Grasim Industries: (2005) and Castrol India Ltd. v. C.C.E., it was ruled that the phrase “that is to say” is to be given a restrictive meaning, rather than expanding the scope of the preceding words. In Castrol India (supra), it was held as follows:

“In Stroud’s Judicial Dictionary, 4th Edition, Vol. 5 at page 2753, we find “That is to say”, is the commencement of an ancillary clause, which explains the meaning of the principal clause. It has the following properties (1) it must not be contrary to the principal clause; (2) it must neither increase nor diminish it; (3) but where the physical clause is general in terms it may restrict it, see this explained with many examples, Stukeley v. Butler Hob, 1971”. The quotation, the expression “that is to say” is employed to make clear and fix the meaning of what is to be explained or defined. Such words are not used, as a rule, to amplify a meaning while removing a possible doubt for which purpose the word “includes” is generally employed. In unusual cases, depending upon the context of the words “that is to say”, this expression may be followed by illustrative instances.

The expression “that is to say” in sub-heading 2710.60 must be interpreted as words of limitation. The fact that sub-heading 2710.60 contains an exclusion clause shows that there may be other lubricating oils that may fall in the residuary heading “others”.

A two-judge bench comprising Justice S Ravindra Bhat and Justice Aravind Kumar was “satisfied that the final decision classifying all the items in question, as falling in Part ‘E’ of the Second Schedule to the Karnataka Sales Tax Act,1957 is correct.”

To Read the full text of the Order CLICK HERE

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