State Taxation Tribunal - Tamil Nadu
State Of Tamil Nadu And Anr. vs Montech Hydraulics And Anr. on 20 August, 1999
Equivalent citations: [2000]120STC641(TRIBUNAL)
JUDGMENT
J. Kanakaraj, J. (Chairman)
1. Tax Case Revision No. 2929 of 1997 relates to Tax Case No. 190 of 1994 on the file of the High Court, Madras. This tax revision case under Section 38 of the Tamil Nadu General Sales Tax Act, 1959 has been filed by the Revenue against the order of the Sales Tax Appellate Tribunal, Coimbatore, dated September 10, 1991 made in T.A. No. 163 of 1991, relating to the assessment year 1988-89. The assessee had returned a turnover of Rs. 96,480 as being first sales of "hoists". This turnover was assessed by the assessing officer at 15 per cent. On first appeal the Appellate Assistant Commissioner rejected the argument that the goods namely, hoists would fall under the entry "machinery" and held that it was rightly taxed as falling under entry 133 relating to "lifts". He, therefore, confirmed the assessment at 15 per cent. On second appeal the Sales Tax Appellate Tribunal found that the goods sold were being used in the engineering industry to move articles from one place to another. Therefore, they came to the conclusion that it cannot be treated as "lift". The Appellate Tribunal held that the item hoists being used in industries for moving goods from one place to another and can be taxed only at 8 per cent as machinery. In this view, the levy of tax at 15 per cent was set aside. In the tax revision case it is contended that the goods "hoists" is only used for lifting articles from One place to another in an industry and therefore, will fall under the entry lifts within the meaning of entry 133 of the First Schedule.
2. Tax Revision Case No. 3041 of 1997 relates to T.C. No. 3 of 1995 filed by the Revenue against the order of the Sales Tax Appellate Tribunal, Madras made in T.A. No. 51 of 1991 relating to the assessment year 1988-89 in respect of another assessee called "Montech Hydraulics". In this case also the goods "hoists" and "high raised platform" were treated as item falling under entry 133 of the First Schedule, whereas the assessee treated them as machinery under item 81 of the First Schedule. The turnover involved in this case is Rs. 12,82,098. In the tax revision case it is again contended that the goods will fall under the category "lift" in entry 133.
3. Therefore, the two tax revision cases relate to the same issue and therefore we render the following common judgment. The contention of the assessee in T.C. No. 3041 of 1997 is a little elaborate and therefore we will refer to those objections. It was argued that the word "lift" and the word "hoists" are not defined in the Tamil Nadu General Sales Tax Act. Therefore, the common parlance theory should be adopted and the court should look for the meaning given in the industry. According to the assessee a lift should be understood as a mechanical contrivance for lifting passengers or goods from a lower place to a higher place and such mechanical contrivance operates only within a fixed spot, up to a fixed height. The goods involved in these cases namely, "hoists" are not meant for such uses. The "hoists" are mainly intended for use in industry as ladders. For instance, they are used for people working at higher places or different levels. They do not have a self-propelling vehicle. They are normally mounted on a trail or they are towed. The assessing authority examined the literature furnished by the assessee and held that "hoists" are the same as "lifts". He also refers to the Oxford Dictionary which gives the meaning of "lift" as "to raise" to a higher level and "operates for raising or lowering persons, goods, etc., from one floor to another". The goods involved in the case are Hydro Swivel lifts and Universal Telescopic hoists and they are also used for lifting persons and workers in industries for working at higher reaches. The assessing authority was therefore satisfied that the goods are taxable under item 133 of the First Schedule.
4. Before the first appellate authority in T.C. No. 3041 of 1997, elaborate arguments were advanced for treating the goods as "machinery" as they are commonly understood in trade circles. Reliance was also placed on certain decisions to suggest that where the words are not defined in the Act, the commodity should be understood as in common parlance in trade circles. But the first appellate authority held that even in common parlance a "lift" is understood as an elevator or a mechanical device, operated by machine power for raising passengers or goods from a lower place to a higher place. The very name given to the goods being "hoists" and "Hydro Swivel lifts" suggests that the goods fall under the entry "lifts".
5. When the matter came to the Appellate Tribunal, a reference was made to the pamphlets which described the goods as designed for carrying persons from one place to another in an industry and also for raising the height of the platform to enable the workers to conveniently work on various levels. The Tribunal referred to entry 81 of the First Schedule relating to machinery and held that the "hoists" are properly classifiable only under the entry machinery. The Coimbatore Sales Tax Appellate Tribunal also held that the goods are used in engineering industries to move articles from one place to another. Therefore, they held that the goods cannot be treated as "lifts" as described in entry 133 of the First Schedule.
6. Before us Mr. R. Mahadevan, the learned Government Advocate, argues that going by the use to which the goods are put to, namely, for lifting goods or persons from one place in the industry to another place and at the same time raising the level of the goods and passengers for enabling them to work at various heights in an industry, there is no difference between a "hoists" and a "lift". In other words, hoists and lifts are used for the same purpose and therefore the orders of the assessing authority and the first appellate authority treating them as goods falling under item 133 should be upheld and the order of the Appellate Tribunal should be set aside. On the other hand Mr. V. Sundareswaran, argued the case of the assessee in T.C. No. 2929 of 1997 and we had asked Mr. V.V. Sivakumar to help the court in T.C. No. 3041 of 1997, because there was no representation for the assessee. Both the learned counsel pointed out that entry 133 was subsequently amended, to include "hoists" under entry 133 of the First Schedule. They also argued in both the cases, that the words namely, "lifts and hoists" have different meaning and different uses in the trade.
7. We have given our anxious consideration to all the arguments and the reasons given by the various officers. We have no doubt in our mind that the common parlance theory should be applied, because there is no definition of the word "lifts" or "hoists" in the Tamil Nadu General Sales Tax Act. In common parlance, lifts are understood only as mechanical contrivance used in building for carrying passengers or goods from one floor to a higher floor or bringing them down from a higher floor to a lower floor. There can be no difficulty in accepting the argument of the assessee that "hoists" were never understood as "lifts" used in building. The discussion of the use of the article "hoists" clearly shows that they are used in industries for lifting workers and goods from one place to another in an industry and to raise them to various levels for convenient working and for carting goods from one place to another and also to raise them to various heights. This being the understanding in common parlance, we do not agree with the assessing authority and the first appellate authority that "hoists" are also included in the entry relating to "lifts". The argument that lifts are normally operated within a fixed spot and up to fixed heights and that a propelling machinery is an integral part of the lift is also very much in point. These aspects are totally absent in hoists used in an industry. Further, as rightly pointed out by the learned counsel appearing for the assessees, the fact that "hoists" were subsequently added in entry 133 of the First Schedule, is a clear pointer to the intention of the Legislature to exclude "hoists" at the relevant point of assessment from entry 133 of the First Schedule. Reference is also made to a judgment of the Kerala High Court reported in [1997] 104 STC 613 (Elgi Equipments Ltd. v. State of Kerala). That judgment does not directly apply to the facts of this case. In that case entry 140A of the First Schedule to the Kerala General Sales Tax Act, 1963 specifically applied "lifts" in relation to the transport equipments. Therefore, the High Court of Kerala said that there was no reason to understand entry 140A as referring to elevators used in buildings and multi-storied structures. In effect that was a converse case to the facts of the present case. But the distinction, that the Kerala High Court makes in respect of "lifts" commonly used in building and multi-storied structures, cannot be lost sight of.
8. The assessee having offered the goods for taxation as machinery, we agree with the Sales Tax Appellate Tribunal in both the cases that the assessment at 15 per cent under entry 133 is incorrect. Consequently both the revisions filed by the Revenue do not merit consideration and they are accordingly dismissed.
And this Tribunal doth further order that this order on being produced be punctually observed and carried into execution by all concerned.
Issued under my hand and the seal of this Tribunal on the 20th day of August, 1999.