Court’s Decision
The Patna High Court, comprising Justice Bibek Chaudhuri and Justice Dr. Anshuman, allowed the appeal filed by Savex Technologies Pvt. Ltd., setting aside the order dated 5 December 2023 of the Commercial Taxes Tribunal, Bihar, which had partially upheld the classification of toners and cartridges under the residuary entry for taxation purposes.
The Court noted that the issues in the present case were identical to those decided in an earlier appeal (M.A. No. 231 of 2024) involving the same appellant and common order of the Tribunal. The coordinate Bench had previously allowed that appeal on 6 August 2025, relying on authoritative judgments including Hewlett Packard India Sales Pvt. Ltd. v. State of Assam (2012), Canon India Pvt. Ltd. v. State of Tamil Nadu (2013), and Wep Peripherals Ltd. v. Commissioner of Commercial Taxes, U.P. (2018).
Accordingly, the Division Bench extended the same relief to the appellant in this appeal, quashing the impugned Tribunal order and allowing the appeal in full.
Facts
The appellant, Savex Technologies Pvt. Ltd., a company engaged in trading of computer hardware and peripherals, was subjected to assessment under the Bihar Value Added Tax Act, 2005. The assessing authority had taxed the sale of toners and printer cartridges at the rate applicable to goods covered under the residuary entry, rather than at the concessional rate applicable to computer peripherals.
Aggrieved, the company filed two appeals before the Commercial Taxes Tribunal, Bihar, being Appeal Case Nos. PT-178 and PT-179 of 2019. By a common order dated 5 December 2023, the Tribunal upheld the classification of toners and cartridges under the residuary entry but remanded certain issues, including adjustment of Entry Tax against VAT liability and levy of interest under Section 39(4), to the lower authority for reconsideration.
Challenging the said decision, the appellant preferred two separate miscellaneous appeals before the Patna High Court — M.A. No. 227 of 2024 (the present case) and M.A. No. 231 of 2024, both arising from the same Tribunal order.
On 6 August 2025, the coordinate Bench of the High Court allowed M.A. No. 231 of 2024, holding that the matter was fully covered by prior judicial pronouncements that classified toners and cartridges as computer peripherals eligible for concessional tax treatment. The appellant thereafter sought parity in the present appeal.
Issues
- Whether the classification of toners and printer cartridges under the residuary entry was legally sustainable under the Bihar VAT Act, 2005.
- Whether parity in treatment was warranted when the coordinate Bench had already set aside the same Tribunal order in a parallel appeal involving identical issues.
- Whether the appellant was entitled to adjustment of Entry Tax from VAT liability and consequential relief from interest imposed under Section 39(4).
Petitioner’s Arguments
The appellant’s counsel, Mr. Mohit Agarwal, submitted that the present appeal arose from the same common order passed by the Tribunal in Appeal Cases PT-178 and PT-179 of 2019. Since the coordinate Bench of this Court had already allowed M.A. No. 231 of 2024 on 6 August 2025, which arose from the second appeal, the present case must be allowed on identical grounds.
Counsel referred to the earlier judgment where the Division Bench had accepted that toners and cartridges are computer peripherals and cannot be taxed under the residuary category. The said judgment was based on the principles laid down in:
- Hewlett Packard India Sales Pvt. Ltd. v. State of Assam [(2012) 56 VST 472 (Gauhati)],
- Canon India Pvt. Ltd. v. State of Tamil Nadu [(2014) 305 ELT 255 (Madras)], and
- Wep Peripherals Ltd. v. Commissioner of Commercial Taxes, U.P. [2018 SCC OnLine All 5572].
It was contended that these judgments have conclusively settled that toners, cartridges, and printer consumables are essential components of computer systems and hence must be taxed at the same rate applicable to computers.
Further, the counsel argued that the Tribunal erred in remanding the issue of Entry Tax adjustment and interest calculation, which the High Court in the previous case had already clarified.
Respondent’s Arguments
The learned Government Pleader for the State supported the submissions of the appellant. He acknowledged that both appeals (M.A. Nos. 227 and 231 of 2024) originated from the same Tribunal order dated 5 December 2023 and involved identical questions of law and fact.
The State therefore expressed no objection to the appeal being disposed of in terms of the earlier judgment dated 6 August 2025 in M.A. No. 231 of 2024, affirming that the issues stood squarely covered by the High Court’s prior decision.
Analysis of the Law
The Bench observed that the coordinate Division Bench, while deciding M.A. No. 231 of 2024, had elaborately considered judicial precedents that interpreted the classification of toners and cartridges under sales tax and VAT enactments across various States.
In Hewlett Packard India Sales Pvt. Ltd. v. State of Assam, the Gauhati High Court had ruled that printer toners and cartridges are integral parts of computer systems and must be treated as computer peripherals. Similarly, in Canon India Pvt. Ltd. v. State of Tamil Nadu, the Madras High Court held that these items are accessories essential for the functioning of computers and printers, not general consumables under the residuary entry.
The Allahabad High Court in Wep Peripherals Ltd. v. Commissioner of Commercial Taxes reiterated the same principle, concluding that toners, cartridges, ribbons, and printer accessories qualify as computer peripherals under entry-specific notifications.
Relying on these authorities, the coordinate Bench had concluded that taxing such goods at residuary rates violates the uniform classification approach adopted nationally and results in unjustified tax disparity.
Precedent Analysis
- Hewlett Packard India Sales Pvt. Ltd. v. State of Assam (2012 SCC OnLine Gau 903) – Held that printer toners and cartridges are computer peripherals taxable at the same rate as computers.
Applied to reinforce that toners and cartridges cannot fall under the residuary entry. - Canon India Pvt. Ltd. v. State of Tamil Nadu (2013 SCC OnLine Mad 2038) – Held that computer consumables like toners and cartridges are “accessories” of computers and entitled to concessional rate of VAT.
Applied to emphasize the functional integration of these items with computers. - Wep Peripherals Ltd. v. Commissioner of Commercial Taxes, U.P. (2018 SCC OnLine All 5572) – Clarified that computer accessories must be treated as part of the same product family for taxation.
Applied to ensure parity in classification across states.
Court’s Reasoning
The Division Bench found that the matter was squarely covered by its earlier decision in M.A. No. 231 of 2024, which had already quashed the same impugned Tribunal order. The judges reiterated that legal consistency and judicial discipline demanded identical treatment when the issues and parties were common.
Referring to paragraph 4 of the previous judgment, the Court quoted:
“Appellant has made out a case so as to interfere with the impugned order dated 05.12.2023 … and the same is set aside in the light of principles laid down by the judicial pronouncements.”
The Bench emphasized that the classification dispute was not open to reinterpretation since the same coordinate Bench had conclusively settled the issue after considering all relevant authorities. Therefore, it extended the same relief to Savex Technologies in the present appeal.
The appeal was accordingly allowed, and the Tribunal’s order was set aside.
Conclusion
The Patna High Court allowed the appeal filed by Savex Technologies Pvt. Ltd., holding that the issues involved were identical to those decided in the earlier appeal (M.A. No. 231 of 2024). The impugned order dated 5 December 2023 of the Commercial Taxes Tribunal, Bihar, was set aside in entirety.
The Court reaffirmed that toners and printer cartridges are computer peripherals and must be taxed accordingly, in line with national jurisprudence.
This judgment not only grants relief to the appellant but also reiterates the need for uniform tax interpretation across jurisdictions to prevent inconsistent application of VAT laws.
Implications
This decision has significant implications for businesses dealing in IT hardware and computer accessories. It confirms that:
- Toners, cartridges, and printer consumables qualify as computer peripherals, not residuary goods.
- Tax authorities must maintain consistency with national precedents to ensure uniformity in VAT interpretation.
- The ruling provides clarity and relief to dealers and distributors facing similar disputes across India.
It also underscores the judiciary’s insistence that technical goods be classified based on their functional purpose, not merely their physical form.
FAQs
1. How did the Court classify printer toners and cartridges for taxation?
The Court held that toners and cartridges are computer peripherals essential for the functioning of computers and printers, not general consumables under the residuary entry.
2. What precedent did the Court rely upon?
The Court relied on Hewlett Packard India Sales Pvt. Ltd. v. State of Assam, Canon India Pvt. Ltd. v. State of Tamil Nadu, and Wep Peripherals Ltd. v. Commissioner of Commercial Taxes, U.P., all holding that such items are computer accessories entitled to concessional tax rates.
3. What was the final outcome for Savex Technologies?
The appeal was allowed, and the impugned Tribunal order was set aside, granting full relief consistent with the earlier High Court decision in M.A. No. 231 of 2024.
