Air Curtains Not Electrical Fans: Madras HC upholds 12% Sales Tax Levy, dismisses Petition of Almonard Limited [Read Order]

The Madras High Court, dismissed writ petitions filed challenging the higher sales tax levy on air curtains ruling that it attracts 12% sales tax levy.

The bench of Justices M. Subramaniam and C. Saravanan upheld the decision of the Tamil Nadu Sales Tax Appellate Tribunal, which had affirmed that air curtains fall under the category of “electrical instruments, apparatus and appliances of all kinds” taxable at 12% under Entry 22 of Part DD of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, rather than being classified as “electrical fans” attracting only 8% tax under Entry 17 of Part C.

Almonard Limited, the petitioner had contended that air curtains, being fitted with motors and impellers, perform a similar function to electrical fans by blowing air and, therefore, should be treated as fans for taxation purposes.

The company submitted that taxing them at 12% amounted to an excessive levy, as the correct rate applicable was only 8% under the specific entry for electrical fans.

However, the Tribunal and subsequently the High Court rejected this argument, emphasizing that air curtains are fundamentally different in design, purpose, and usage.

The Court observed that air curtains are specialized environmental separation equipment that create a sheet of moving air across doorways or open areas to prevent the entry of hot air, insects, dust, and pollutants into air-conditioned or temperature-controlled environments.

They also conserve energy by minimizing the loss of conditioned air and, in some cases, even handle heated air during winters. These characteristics, the Court held, distinguish air curtains from ordinary electrical fans, which are primarily designed for ventilation and air circulation.

By confirming that air curtains possess distinct features and cannot be equated with fans, the Court concluded that they rightly fall under the broader category of electrical appliances covered by Entry 22 of Part DD, taxable at 12% from April 1, 2000. The differential tax rate on the turnover of ₹8,44,370/- was therefore restored by the authorities.

In its order, the Bench made it clear that the petitioner had no valid grounds to claim classification under the lower-taxed category. Accordingly, both writ petitions filed by Almonard Limited were dismissed without costs.

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