Karnataka High Court
Taurus Earthmovers Pvt. Ltd. Reptd. By ... vs State Of Karnataka, Reptd. By The ... on 1 February, 2007
Equivalent citations: (2007)10VST224(KARN), 2007 (2) AIR KAR R 569
Bench: H.L. Dattu, Anand Byrareddy
ORDER
Page 0495
1. The petitioner is a private limited company engaged in the business of trading tractors and spares. They are also authorised distributors of M/s JCB India Limited and are authorised dealers for safes and servicing and also spare parts for all the JCB products. The petitioner company is registered both under the provisions of the Karnataka Sales Tax Act, 1957 ('KST Act' for short) and the Central Sales Tax Act, 1956 ('CST Act' for short).
2. The assessee company for the assessment year, namely, 1996-1997 had fifed its annual returns, declaring the gross and net sales of the company at Rs. 6,85,65,062/- and at Rs. 5,90,56,896/- under the provisions of the KST Act and at Rs. 20,569/- under the CST Act respectively. The assessee company effects purchases of JCB 3D backhoe ('JCB 3D' for short) and their parts and accessories exclusively from M/s Escorts JCB Limited, Poona and Ballabgarh in Haryana and mostly effects sales of those goods locally. In the annual returns filed, the assessee company had classified the sales of JCB 3D and its parts and accessories and had admitted the liability of gross turnover on their sale at 1%. The return so filed is not accepted by the assessing authority and therefore, had issued a proposition notice, proposing to levy tax on the goods sold by the assessee company under Entry 1(i)(a) of Part 'M' of II Schedule appended to the KST Act and not under Entry 1(i)(e) of Part 'M' of II Schedule to the KST Act as claimed by the assessee company. The assessee company had objected to the proposal made by filing its detailed objections. The assessing authority after considering the objections so filed, has confirmed the proposal made by him in the proposition notice and in that, has concluded that the goods sold by the assessee company, namely, JCB 3D, its parts and accessories thereof are nothing but earth movers and therefore, they would fall under specific Entry 1(i)(a) of Part 'M' of II Schedule appended to the KST Act.
3. The assessee company being aggrieved by the order of assessment so passed by the assessing authority, had filed first appeal before the Additional Joint Commissioner of Commercial Taxes (Appeal), in Nos. 391 and 392/2000. The first appellate authority, vide its order dated 24.3.2000, has allowed the appeals and has remanded the matter to the assessing authority to redo the matter in accordance with law and in the four comers Page 0496 of the observations made in the course of the order. After such remand, the assessing authority vide his order dated 11.5.2001, has held that the equipment, namely, JCB 3D cannot be considered as an earth moving equipment and therefore, requires to be classified only as 'tractor' falling under Entry 1(i)(e) of Part 'M' of II Schedule appended to the KST Act.
4. The revisional authority being of the view that the order of assessment passed by the assessing authority for the assessment year 1996-1997 dated 11.5.2001 is irregular, illegal and improper and prejudicial to the interest of the revenue, has issued show cause notice under Section 21(4) of the KST Act, interalia proposing to revise the assessment order for the assessment year 1996-1997 and further proposing to direct the assessing authority to treat the machinery sold by the assessee company as an item falling under Entry 1(i)(a) of Part 'M' of II Schedule appended to the KST Act and levy tax accordingly. Pursuant to the notice issued by the revisional authority, the assessee company had filed its objections dated 4.2.2003.
5. The revising authority after considering the objections filed by the assessee company to the show cause notice issued under Section 21(4) of the KST Act, has passed an order dated 27.3.2003 under Section 21(2) of the KST Act, by setting aside the orders passed by the assessing authority for the assessment year 1996-1997 dated 11.5.2001 and has further directed the assessing authority to issue revised demand notice, treating the machinery sold by the assessee company as an item falling under Entry 1(i)(a) of Part 'M' of II Schedule appended to the KST Act.
6. Aggrieved by the aforesaid order, the assessee company has carried the matter before the Karnataka Appellate Tribunal in appeal No. STA. 596/2003. The Tribunal by its order dated 29.1.2004 has rejected the appeal.
7. In the revision petition filed before this Court, the assessee company calls in question the correctness or otherwise of the order passed by the Karnataka Appellate Tribunal in STA No. 596/2003 dated 29.1.2004. In the memorandum of revision petition, the assessee company has raised the following substantial questions of law for our consideration and decision. They are:
(a) Whether on the facts of the petition, the Joint Commissioner under revisional jurisdiction can exercise jurisdiction by invoking Section 21(2) of the KST Act, 1957?
(b) Whether the commodity that is sold by the petitioner namely JCB 3D tractor falls within Entry 1(i)(a) of Part M of the II Schedule as held by the Joint Commissioner and the Appellate Tribunal or under Entry 1(ii)(e) of Part M of II Schedule as contended by the petitioner?
(c) Whether when two views are possible, is it not a settled position of law that the entry that which is more beneficial to the tax payer will have to be adopted?
8. We have heard Sri Sarangan, learned Senior Counsel for the assessee company and Smt. Sujatha, the learned Additional Government Advocate Page 0497 for the revenue. Both the learned Counsels have projected their case very ably, which has made our task a little difficult to answer the questions of law raised in this revision petition.
9. The learned Senior Counsel for the assessee company, firstly, contends that the revisional authority was not justified in invoking his revisional powers to upset an order passed by the assessing authority, who had only followed the orders and directions issued by the first appellate authority. In aid of his submission, the learned Senior Counsel would take us through the orders and directions issued by the first appellate authority dated 24.3.2000, wherein while remanding the matter, the first appellate authority has asked the assessing authority to pass a fresh order of assessment for the assessment year 1996-1997 in accordance with law and in the four corners of the observations made in the course of the order. To us, it appears, that the learned Senior Counsel's thinking is, when the first appellate authority has said in his order "and in four corners of the observations made above" would only mean, that the assessing authority should toe the line of thinking of the first appellate authority and he cannot independently apply his mind to the fact situation and come to any other conclusion other man what was passing in the mind of the first appellate authority. The submission is very attractive is our first impression, but on a deeper consideration, it appears to be very hollow. It is true that the first appellate authority has taken enough and more trouble to the in line with the written arguments filed before it by the representative of the assessee company, but in the end, has left the matter to be decided by the assessing authority after verifying the nature of goods sold by the assessee company and then, to draw an inference whether the said goods is a "tractor" falling under Entry 1(ii)(e) of Part 'M' of II Schedule appended to the KST Act. Therefore, in our view, this is not a case where the first appellate authority has asked the assessing authority to sign an order on the dotted lines, but to reconsider the whole issue independently after physically examining the nature of the goods sold by the assessee company. In the alternative, it can be said the 'remand order' passed by the first appellate authority as an open remand and had not tied the assessing authority to tread on the path carved out by him in his order.
10. Under the Act, the revisional authority is empowered to revise an order passed by the assessing authority, if for any reason, the order passed is erroneous and prejudicial to the interest of the revenue. In the present case, the assessing authority had passed an order after the remand order passed by the first appellate authority by taking into consideration the nature of goods sold by the assessee company. The order so made in the opinion of the revisional authority is improper, illegal and erroneous order and thereby prejudicial to the interest of the revenue and therefore, requires to be revised. To arrive at this conclusion, the revisional authority has assigned more than one reason and those reasons prima facie does not appear to be either arbitrary or unreasonable. Therefore, this thinking and reasoning of the revisional authority cannot be said one without Page 0498 jurisdiction or without authority of law. Therefore, the first question of law framed by the assessee company requires to be answered in the negative i.e. in favour of the revenue and against the assessee company.
11. To answer the second question of law raised by the assessee company, it is appropriate to refer to the literature produced by both the learned Counsel in justification of the claims and its denial by the revisional authority and the Tribunal.
12. The assessee company effects sales of JCB 3D. In the literature that they have produced before this Court at the time of hearing of this petition would show, that it is a mechanical device consisting of planned and an organised arrangement of various parts, each part having definite functions and as a result of combined functioning, does some work, which may be impossible or difficult for human physical power to perform or even if it can be done, it cannot be done continuously for a long period or with the speed, with the same uniformity with which the JCB 3D does the same work. Supply of power to the JCB 3D could be either by the natural forces or by human or animal energy or electrical energy or any other type of energy. JCB 3D has a shovel on one side and on the other side, a forklift. In the center, a cabin is designed for the operator of the vehicle and normally, the vehicle is mounted on tyres.
13. The JCB 3D is used for levelling the land using shovel attachment. This attachment is used mainly for preparing the land cultivation. JCB 3D can be used for various types of work, such as, breaking the rocks using a rock breaker attachment, for making irrigation channels using a 'V' shaped bucket, for laying the pipes in the trenches already dug by using JIB crane attachment, for uprooting trees and removing the same from the land by using Jaw Bucket attachment, for making pits in an agricultural land using a 'Augur' attachment, for transporting the uprooted trees using 6-in-1 shovel attachment, for desilting/cleaning the irrigation tank in an agricultural land using a desilting attachment, etc.
14. Smt Sujatha, the learned Additional Government Advocate has brought to our notice the available material on the Internet with regard to JCB 3D excavators. The literature says, that the JCB 3D loader can dig or load endlessly. It can perform operations like excavation, loding, dozing, grading, grabbing, backfiring, trenching, ditch cleaning and rock breaking and also can move on any terrain. It gives excellent all-round visibility to the operator, has a well-ventilated cabin and fatigue free control.
15. Relying on Wikipaedia Encyclopaedia, the learned Additional Government Advocate would submit, that JCB 3D is a Engineering vehicle or construction equipment (some times referred to as earth movers) are heavy duty vehicles, specially designed for executing engineering and construction tasks. This is so fir JCB 3D machines are concerned.
16. Now coming to the 'tractor', the same is not defined under the Act. The dictionary meaning is, a self-propelled power unit, which is used to pull loads, to carry and operate tillage, cultivating and harvesting machinery, Page 0499 and to provide power through a suitable belt pulley, power take off or other power outlet, to drive stationary and draw implements and machines. Tractors are powered with internal combustion engines. The word 'tractor' was coined by combining parts of the word "traction" and "motor". The tractors are of different varieties. Farm or agricultural tractors, which are used in factories for handling freight and baggage at the terminals and warehouse, road tractors used for road building and some times for carrying load and military tractors or tanks used in military operations and warfare. This is with regard to tractors.
17. The entries, which are relevant for the purpose of this case are Entry 1(i)(a) and Entry 1(ii)(e) and (ee) of Part 'M' of II Schedule appended to the KST Act Entry 1 is as under:
Entry 1: Machinery that is to say-
(i)(a) Earth Movers, such as dumpers, dippers, bulldozers and the like;
(b) Parts and accessories of earthmovers (other than diesel engine and its parts, batteries and tyres, tubes and flaps).
18. Then, the other Entry that requires to be noticed is Entry 1(ii)(e) and (ee) of Part 'M' of Second Schedule. It is as under:
Entry 1(ii) Agricultural machinery, namely,
(a) xxx
(b) xxx
(c) Tractors
(d) xxxxxxxx
(e) Tractors and power tillers, trailers.
(ee) Parts and accessories (excluding tyres, tubes and flaps) of tractors and power tillers, trailers.
19. The Entry with which we are concerned in this case is 'Machinery' that is to say:
The word 'machinery' when used in ordinary language, prima facie, means some mechanical contrivances which, by themselves or in combination with one or more other mechanical contrivances by combined movement and interdependent operation of their respective parts generate power, or evoke, modify, apply or direct natural forces with the object in each case of effecting so definite and specific result. After the word 'Machinery' the Legislature has used the expression 'that is to say'. This expression is explained by the Apex Court in number of decisions. We do not intend to burden our judgment with all those decisions, but refer only one of the earliest pronouncement of the Apex Court, which has been consistently followed in subsequent decisions. The Apex Court in the case of State of Tamilnadu v. Pyare Lal Malhotra , has stated, ordinarily the expression Page 0500 '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 Entry with which we are concerned, speaks of "machinery" and then the expression "that is to say" is used to include machineries like earth movers. In the Engineering Field, there are various types of machineries used for the purpose of digging and transporting the earth. In order to include the various typos of Earth Movers, the Legislature then again uses the expression "such as". In the context, in which it is used, it can only mean, any type of Earth Movers and saves all species or classes of Earth Movers and by way of illustration, it speaks of dumpers, dippers, bulldozers and anything akin to those machineries. Therefore, by this Entry, the Legislature intends to rope in such machineries, which are mainly used for the purpose of "earth moving" for the purpose of taxation under the KST Act.
20. The other Entry, which we are concerned in this revision petition, is "Agricultural Machinery". The entry speaks of machinery which are used for agricultural purpose. The expression 'agriculture' means, the science and the art of cultivating the soil; including the gathering in of the crops and the rearing of live stock; farming, etc. It is the central idea of either tillage of the land or sowing of seeds or planting or similar work on the land which invests the operation with the characteristic of agricultural operations. Agriculture is the basic idea underlying the expression 'agricultural machinery'. The basic operations would require tilling of the land, sowing of the seeds, planting and similar operations on the land and such other operations requires to be performed for harvesting and rendering the produce fit for the market. In our view, in order to invest the character of 'agricultural machinery', the machinery must necessarily be in conjunction with and continuation of the basic operation of agriculture. However, there is no warrant at all for extending it to all activities which have relation to the land or are in any way connected wall the land such as levelling of the soil, digging pits, breaking rocks, laying of pipes, uprooting of trees and removing the same from the land and desilting/clearing the irrigation tank in an agricultural land. The use of the word 'agricultural machinery' in regard to such activities would certainly be a distortion of the term. Therefore, one has to look to the terms of the definition in the Entry itself and construe the same regardless of any other consideration. Though the expression 'agricultural machinery' is not defined in the Act, it is obviously intended to refer to those machineries, which are directly used for agricultural purposes.
21. As we already said, Entry 1(ii) of Part 'M' of Second Schedule appended to the KST Act provides for various types of agricultural machinery, such as, tractors and parts and accessories of tractors and power tillers and Page 0501 trailers. The Legislature has used 'namely' immediately after the word 'agricultural machinery' and thereafter, has enumerated various types of machinery which according to it to be treated as agricultural machinery and exigible and entitled for lesser rate of tax. The word 'namely' imports enumeration of what is comprised in the preceding clause. In other words, it ordinarily serves the purpose of equating what follows with the clause described before. Therefore, in our view, all machineries would not fall under this Entry and it is only those machineries, which are used in agricultural operation, would fall under this Entry.
22. Now, we will advert to the contentions canvassed by the learned Counsel for the parties on this issue.
Sri Sarangan, learned Senior Counsel for the assessee company would contend 'JCB 3D' machines are modern era of tractors and they are now extensively used in the agricultural operations by farmers having large tracts of land. The design, construction and the use which it is put has all the features of a tractor and therefore, the first appellate authority was justified in coming to the conclusion that the machinery sold by the assessee company is a 'tractor' falling under Entry 1(ii)(e) of Part 'M' of Second Schedule appended to the KST Act. The learned Senior Counsel would further submit that even in common parlance, JCB 3D is known as 'tractor' and therefore, the revisional authority was not justified in invoking his revisional powers to upset a wholly justified, proper and legal order. In aid of his submission, the learned Senior Counsel strongly relies on the observations made by a Full Bench of Madhya Pradesh High Court in the case of RME Works v. Commissioner of Sales Tax 38 STC 310. In the said decision, the Court was considering Entry 44 of Part II of Schedule II to the Madhya Pradesh General Sales Tax Act, 1958, which speaks of all machineries or machines worked by electricity, diesel or petrol and spare parts and accessories thereof excepting agricultural machinery and implements and parts thereof. The issue before the Court was, whether a tractor' can fit into the Entry and to be treated as agricultural machinery. The Court after a detailed discussion, has come to the conclusion that the tractors sold by the assessee were designed and manufactured for agricultural purposes, but were used by the purchasers for non-agricultural purposes also, though only in a small fraction of the total sales, the tractors sold by the assessee would be entitled to be treated as agricultural machinery and excluded from Entry 44 of Part II of Schedule II to the Madhya Pradesh General Sales Tax Act, 1958.
23. In our view, this decision would not assist the assessee company. In the present case, we are concerned with two Entries. One speaks of 'Earth Movers' and the other Agricultural Machinery'. The Machinery 'JCB 3D' principally is used for digging and moving the earth and may be for levelling the land for the purpose of cultivation. Merely because the activity of this machinery is extended in relation to a land or connected with the land or for the purpose of levelling the land, it cannot be called as agricultural machinery and if it is done, it would be a distortion of the term.
Page 0502
24. Reliance is also placed on the decision of Madras High Court in the case of General Marketing and Manufacturing Company Limited v. The State of Tamilnadu 45 STC 96. The facts in that case was, that the assessee was a dealer in automobiles, tractors, earth moving equipments and spares thereof. The question before the Court was, the rate of tax payable on the sales turnover in crawler tractors, dumpers and pay loaders. It is relevant at this stage to notice the two Entries, which fell for consideration of the Court. The one was Entry 55 and the other was Entry 55-A of the Tamilnadu General Sales Tax Act. Entry 55 of the Act was with regard to all varieties of tractors and bulldozers, component parts of tractors, bulldozer, tyres, etc., and Entry 55-A of the Act was with regard to rear dumpers, loaders, scrapers, forklift trucks and other similar variety of machinery of which mechanically propelled vehicle forms an integral part, tyres (including pneumatic types) and tubes ordinarily used for the above (whether or not such tyres and tubes are also used for other vehicles) and articles (excluding batteries) adapted for use generally as parts and accessories of the above. While considering these two Entries, the Court has observed, that in the light of the meaning given to the word 'tractor', in these dictionaries, it would be clear that rear dumper and pay loader sold by the assessee company cannot be called a 'tractor'. The difference between a tractor and other vehicles is that the tractor merely pulls another item of machinery. Rear dumper as well as pay loader are self moving machineries with wheels. As they do not pull any other item, it is not possible to accept the contention that these fall within the scope of the word 'tractor' and in that, event independent of item 55-A they cannot be brought within the scope of the First Schedule.
25. In our opinion, the observations made by the Madras High Court in no way would assist the learned Senior Counsel for the assessee company. The competing entries which the Court was considering was entirely different from the one we are concerned with in this revision petition. Secondly, the issue before the Madras High Court was entirely different from the one we are asked to decide in this revision petition. The only similarity, at the most, between these two cases is the expression 'tractor', which has been used in the decision in 'extenso'. It is true that a tractor is merely a mechanical device, which draws or pulls something. It is that 'machine' the Legislature recognises it as agricultural machinery in the entry appended to the Act. The assessee company purchases and effects sales of JCB 3D. This machine though has four wheels, it is not used for pulling agricultural or construction implements, nor it is just used to draw or for pulling farm machinery or other vehicle. This machine is a specially designed vehicle for the purpose of digging the earth and moving it with the help of a shovel and some times with different attachments like 'V' shaped bucket, JIB crane attachment, Jaw bucket, Augur, etc. It is used not as an agricultural machinery bat as a machinery for the purpose of moving the earth. In this country, a farmer with the type of economic background he has, can't even dream of using JCB 3D for the purpose of agricultural operations or agricultural purpose. It is the big contractors, who use this type of machines for the purpose of levelling the roads at somebody's cost.
Page 0503
26. Before concluding on this issue, we reiterate that there are two entries. The first entry speaks of machineries, which are used for the purpose of moving the earth, such as dumpers, dippers, bulldozers and the like. The purpose for which these machineries are used to scrap the mud and move it from place to place for various purposes. The dumpers are used to carry the mud, the same is in with dippers, and the bulldozers are used to scrap the uneven soil. The Legislature can't visualise all sorts of machineries, which can be used for the purpose, which we have noticed earlier. Therefore, rightly, has used the expression "and the like" after the expressions dumpers, dippers and bulldozers and that only means that anything akin to dumpers, dippers and bulldozers requires to be brought under this entry. In our view, the machine which we are concerned in this revision petition has all the characteristics, design, functions, etc., akin to earth movers and therefore, in our view, the revisional authority was justified in treating the machinery sold by the assessee company as a earth moving equipment by rejecting the claim of the assessee company that it is an agricultural machinery.
27. Nextly, the learned Senior Counsel would ask us to adopt progressive interpretation of the statute and the entries and then hold JCB 3D are agricultural machinery since they have some, which we doubt very much, have characteristics of a tractor. The suggestion appears to be, to have modern outlook ratther than grandma's perceptions, ideas and outlook. We really appreciate the idea mooted by the learned Senior Counsel, but this suggestion cannot be accepted, when the Legislature has taken all precautions and care to treat different machines constructed for different purposes to fall under different entries and exigible for different rate of tax. Though this was our thinking, the learned Senior Counsel to change our mind set did bring to our notice, the note made by learned Author in Kanga and Palkivala (Ninth Edition), wherein the learned Author has commented that "it is presumed that Parliament intends the Court to apply to ongoing Act a construction that continuously updates its wording to allow for changes. The interpretation must keep pace with changing concepts and values and should undergo adjustments to meet the requirements of the developments in the economy, law, technology and the fast changing social conditions.
28. The learned Senior Counsel would tell us further, that, this progressive interpretation is now adopted by the Apex Court, by relying on the decision of the Apex Court in the case of Commissioner of Income Tax v. Podar Cement Pvt. Ltd. and Ors. , wherein the Court has observed:
It is presumed that Parliament intends the Court to apply to an ongoing Act a construction that continuously updates its wording to allow for changes, since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking. This means that in its application on any date, the language of the Act, though Page 0504 necessarily embedded in its own time, is nevertheless to be construed in accordance with the need to treat it as current law. In construing an ongoing Act, the interpreter is to presume that Parliament intended the Act to be applied at any future time in such a way as to give effect to the true original intention. Accordingly the interpreter is to make allowances for any relevant changes that have occurred, since the Act's passing, in law, social conditions, technology, the meaning of words, and other matters.
Assuming that there are two possible interpretations on Section 22 of the 1961 Act, which is akin to a charging Section, it is well settled that the one which is favourable to the assessee has to be preferred.
The Court has further observed:
At this juncture, we can also refer to the judgment cited by Mr. Syali regarding updating construction of the words used in the statute. In State (Through CBI/New Delhi) v. S.J. Choudhary , this Court has quoted the following passage with approval in support of updating construction (page 433 of [1996] 2 SCC):
Statutory Interpretation by Francis Bennion, 2nd cdn. Section 288 with the heading 'Presumption that updating construction to be given' states one of the rules thus (page 617):
(2) It is presumed that Parliament intends the Court to apply to an ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking. This means that in its application on any date, the language of the Act, though necessarily embedded in its own time, is nevertheless to be construed in accordance with the need to treat it as current law.
In the comments that follow it is pointed out that an ongoing Act is taken to be always speaking. It is also, further, stated thus (pp.618-19):
In construing an ongoing Act, the interpreter is to presume that Parliament intended the Act to be applied at any future time in such a way as to give effect to the true original intention. Accordingly, the interpreter is to make allowances for any relevant changes that have occurred, since ate Act's passing, in law, social conditions, technology, the meaning of words, and other matters. Just as the US Constitution is regarded as "a living Constitution", so an ongoing British Act is regarded as "a living Act". That today's construction involves the supposition that Parliament was Page 0505 catering long ago for a state of affairs that did not then exist is no argument against that construction. Parliament, in the wording of an enactment, is expected to anticipate temporal developments. The drafter will try to foresee the future, and allow for it in the wording.
An enactment of former days is thus to be read today, in the light of dynamic processing received over the years, with such modification of the current meaning of its language as will now give effect to the original legislative intention. The reality and effect of dynamic processing provides the gradual adjustment. It is constituted by judicial interpretation, year in and year out. It also comprises processing by executive officials.
29. The learned Senior Counsel also brings to our notice the view expressed by the Apex Court in the case of State of Punjab v. Amritsar Beverages Limited and Ors. [2006] 147 STC 657, wherein the Court has stated, that, creative interpretation has been resorted to by the Court so as to achieve a balance between the age old and the rigid laws on the one hand and advanced technology on the other. The Judiciary always responds to the need of the changing scenario in regard to development technologies. It uses its own interpretative principles to achieve a balance when Parliament has not responded to the need to amend the statute having regard to the developments in the field of science.
30. We are bound by the observations made by the Apex Court. This creative interpretation, in our opinion, requires to be done, if there is some ambiguity or if the language of the statute is not clear and not under all circumstances. When the Legislature itself categorised machineries which are used as earth movers and then agricultural machineries, by our Judicial interpretation, it is not permissible for us to categorise a machine, which is designed, constructed and primarily used as earth mover and as agricultural machinery. Therefore, in our view, the decision on which reliance is placed by the learned Senior Counsel may not assist him in the facts and circumstances of the present case.
31. In view of the above discussions, we hold that JCB 3D machine falls within Entry 1(i)(a) of Part 'M' of II Schedule appended to the KST Act Accordingly, second question of law raised by the assessee company answered in the affirmative i.e. in favour of the revenue and against the assessee.
32. The third issue raised by the assessee company, in our view, is no more debatable in view of the settled position in law on this issue. Discussion of this issue in the facts and circumstances of the case is not really necessary. Suffice it to observe, that it is true that when two views are possible, it is settled position of law, that the Entry, which is more beneficial to the tax payer will have to be adopted.
Page 0506
33. In view of the aforesaid discussions, we hold that JCB 3D is a machinery, which is an earth mover and not a tractor. Accordingly, the revision petition requires to be rejected and accordingly, it is rejected. No order as to costs. Ordered accordingly.