Karnataka High Court
M/S.L And T Case Equipments Pvt Ltd vs The Commissioner Of Commercial Taxes on 10 August, 2012
Bench: K.Sreedhar Rao, B.Manohar
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 10TH DAY OF AUGUST 2012
PRESENT
THE HON'BLE MR. JUSTICE K.SREEDHAR RAO
AND
THE HON'BLE MR. JUSTICE B.MANOHAR
STRP Nos.30/2010 & 51/2010 c/w 31/2010
STRP Nos.30/2010 & 51/2010
BETWEEN :
M/S.L & T CASE EQUIPMENTS PVT LTD
NO.38, CUBBON ROAD
BANGALORE. ...PETITIONER
(By Sri A RAMA & Sri D VENKATESH, ADVS.)
AND :
THE COMMISSIONER OF COMMERCIAL TAXES
COMMERCIAL TAX DEPARTMENT, VTK-1
KAVIKALIDASA ROAD, GANDHINAGAR
BANGALORE - 09. ...RESPONDENT
(By Sri SHIVAYOGI SWAMY, AGA)
These STRPs are filed under Section 23(1) of the Act against
the order dated 26.2.2010 in STA Nos.2126 to 2128/2004 passed by
the Karnataka Appellate Tribunal, Bangalore.
2
STRP No.31/2010
BETWEEN:
M/S.L & T CASE EQUIPMENTS PVT LTD
NO.38, CUBBON ROAD
BANGALORE. ...PETITIONER
(By Sri A RAMA & Sri D VENKATESH, ADVS.)
AND :
THE COMMISSIONER OF COMMERCIAL TAXES
COMMERCIAL TAX DEPARTMENT, VTK-1
KAVIKALIDASA ROAD, GANDHINAGAR
BANGALORE - 09. ...RESPONDENT
(By Sri SHIVAYOGI SWAMY, AGA)
This STRP is filed under Section 23(1) of the Act against the
order dated 26.2.2010 in STA No.2127/2004 passed by the
Karnataka Appellate Tribunal, Bangalore.
These STRPs coming on for final hearing this day,
K.SREEDHAR RAO, J passed the following:
ORDER
These petitions involve common question of law and fact. STRP No.31/2010 pertains to Central Sales Tax and other two petitions pertain to Karnataka Sales Tax and pertain to the assessment year 2001-2002 and 2002 - 2003.
2. The petitioner/assessee is the manufacturer of Vibratory Compactor. The petitioner disclosed that the said equipment is a earth mover and claimed concessional tax tariff vide notification 3 dated 26.7.2001. The AO took a contra view that the vibrators do not come within the purview of earth movers and it has come under general category of machinery falling under Sl.No.1(iii)(a) of part M of II schedule. The Joint Commissioner of Commercial Taxes (Appeals) confirmed the order of the AO. The Tribunal also confirmed the order of AO and held that the vibratory compactors are classified under Sl.No.1(iii)(a) of part M of II schedule to the KST Act, 1957. Therefore, the assessee aggrieved by the said order has filed these revision petitions.
3. Counsel for the respondent strenuously contended that the order of the Appellate Authority is sound and proper. The Joint Commissioner of Commercial Taxes (Appeals) has succinctly dealt with the concept of earth mover, which defines under Part M(1)(i)(a) of the KST Act as earth movers, such as dumpers, dippers, bulldozers and the like. The vibratory compactor is defined as closely placed or fitted together, sediments compacted by pressure from above, an area formed by dumping rock waste by means of heavy machine, a machine which crushes solid waste into the ground. Therefore, the function of the compactor is totally distinct and different from the earth mover described in Part M(1)(i)(a) of 4 the KST Act. It is submitted that in order to drag mover, there should be movement of earth in case of compactor. There is no movement of earth, but only crushing of solid waste into the ground.
4. Counsel for the petitioner, per contra, submits that the earth mover defined in Part M 1(i)(a) is only an illustrative in nature. The machineries described as earth movers are not exhaustive. The definition of earth mover is inclusive one. Any other machinery, which is similar machinery stated in Part M 1(i)(a) of the Act also would get included to constitute earth mover.
5. The notification issued on 26.7.2001 under the KST and CST Act declares two per cent on hydraulic excavators and other earth moving equipments. The vibratory compactor, which crushes the solid waste into the ground would also constitute earth mover, because there is a compression of material into the earth and vertical movement of the earth, which discloses the movement of earth. In that view of the matter, it is submitted that the view taken by the Authorities below that the vibratory compactor does not constitute earth mover is bad in law and the same is to be set aside.
6. The following substantial question of law has been framed in 5 the appeals for consideration:
"Whether the Karnataka Appellate Tribunal was right in law in confirming the order dated 29.06.2004 of the JCCT (Appeals), Bangalore City Division-II, Bangalore, holding that `compactors' are not earth moving machinery entitled for benefit under Notification No.FD 117 CSL 2001 (I) & FD 117 CSL 2001 (II) dated 26.07.01?"
7. On going through the submissions made at the Bar, we do not find any good reason to reject the contention of the petitioner. Because, the vibratory compactor does the function of putting waste vertically into the ground. Counsel for the petitioner has produced copy of the notification dated 31.3.1993 under KST Act. In the said notification, the vibratory compactor has been classified as earth moving equipment. However it is the contention of the respondent that the said notification has been withdrawn. It is to be noted that withdrawing of the notification would be of no consequence, when it was the stand of the Government in the notification dated 31.3.1993 that vibratory compactor has been classified as earth moving machine. Therefore, it is the understanding of the Government that vibratory compactor is an earth moving machinery. In fact, in the said notification the vibratory compactor is shown in brackets to make it specific that it is in the category of earth moving machinery. 6 In that view, it is untenable for the respondent to contend that vibratory compactors are not earth moving machineries. The understanding of the Government with regard to the vibrating compactor as earth moving machinery and issuing notification to that effect would be binding on the Government because the notification has statutory force and now the Respondent cannot argue contrary to the stand taken in the notification. In that view of the matter, the question of law is answered in favour of the assessee. Accordingly, the petitions are allowed.
Sd/-
JUDGE Sd/-
JUDGE bkm.