Karnataka High Court
Raja Motors vs Additional Deputy Commissioner Of ... on 25 July, 1996
Equivalent citations: ILR1996KAR3028, 1997 A I H C 842, (1997) 106 STC 309 (1997) 1 KANTLJ(TRIB) 57, (1997) 1 KANTLJ(TRIB) 57
ORDER G.C. Bharuka, J.
1. The only question involved in the present writ petitions is as whether the parts and accessories of tractors are exigible to tax under the provisions of the Karnataka Entry Tax Act, 1979.
2. The petitioner herein is engaged in the business of automobile parts accessories including those of tractors. It is registered under the provisions of the Karnataka Sales Tax Act, 1957, as also the Karnataka Entry Tax Act, 1979. The petitioner is aggrieved by the proposition notices dated January 2, 1995 being annexures B and C issued by the first respondent in respect of assessments made under the Entry Tax Act for the periods 1992-93 and 1993-94 to the extent the said respondent has proposed to levy tax on the parts and accessories of tractors.
3. Section 3, which is charging section, provides that there shall be levied and collected a tax on entry of any goods specified in the First Schedule into a local area for consumption, use or sale therein at such rates not exceeding five per cent of the value of the goods as may be specified by the State Government under a notification issued in that behalf. Sub-section (6) of the said section declares that no tax shall be levied under the Entry Tax Act, on any goods as specified in the Second Schedule.
4. The answer to question as to whether parts and accessories of tractor are liable to tax under the Entry Tax Act rests primarily on the interpretation of entry Sl. No. 52 of the First Schedule to the said Act which reads thus :
"Sl. No. 52 - Machinery (all kinds) and parts and accessories thereof but excluding agricultural machinery."
5. Further, the State Government pursuant to its power under section 3(1) of the Entry Tax Act has issued a notification I No. FD 69 CET 92 dated April 30, 1992, inter alia, providing 2 per cent tax in respect of the machineries and parts referred to in the said Sl. No. 52 of the First Schedule. It may be specifically noticed here that "agricultural machinery" has been exempted from levy of entry tax by placing it in the Second Schedule at Sl. No. 3.
6. The revenue has not disputed that the tractors are agricultural machinery and therefore both by virtue of Sl. No. 52 of the First Schedule and Sl. No. 3 of the Second Schedule, it is exempt from levy of entry tax. But the assessing officer has sought to levy tax on "parts and accessories of tractors" on the ground that the "parts and accessories of agricultural machineries" have not been mentioned specifically in either of the said two entries and therefore, according to him, keeping in view the circular of the Commissioner (annexure A), the said goods are liable to be taxed at the rate of 2 per cent.
7. Mr. Indra Kumar, learned counsel appearing for the petitioner, has seriously disputed the view taken by the learned Commissioner, which, according to him, also binds the assessing officer, on the ground that keeping in view the provisions of section 2B of the Entry Tax Act the words and expressions used therein, but, not defined, shall have the meaning assigned to them in the Karnataka Sales Tax Act. His submission is that since the words "agricultural machinery" has not been defined expressly under the Entry Tax Act but in Part M of the Second Schedule to the Sales Tax Act, the parts and accessories of tractors have been included in the contemplation of the expression "agricultural machinery", therefore, according to him, keeping in view the legislative intent as disclosed in section 2B of the Entry Tax Act, the same meaning needs to be assigned for resolving the present controversy as well. On the other hand, Smt. Vidya, learned High Court Government Pleader appearing for the respondents, has submitted that the Second Schedule to the Sales Tax Act has grouped certain goods under a particular head only for the purpose of providing rate of tax and that cannot be construed as a meaning assigned to the leading word of the said group nor from the said scheme under the Sales Tax Act it can be inferred that the Legislature had purported to assign any meaning to the word "agricultural machinery".
8. In my considered opinion, the controversy raised herein can be resolved without undertaking any interpretative exercise as sought to be suggested by the rival contenders. It is so because it is not in dispute that tax can be levied under the Entry Tax Act only in respect of goods mentioned in the First Schedule. For the purpose of levying tax on "parts and accessories of tractors" the revenue has placed reliance only on the entry in Sl. No. 52 of the First Schedule. A bare reading of the said entry makes it quite very clear that "tractor" which is essentially an agricultural machinery is not included under the general term "machinery" and, therefore, the "parts and accessories of tractor" cannot also be construed as included in the expression "machinery" (all kinds) and parts and accessories thereof' because the word "thereof" is adjectival to "machinery (all kinds) " which does not include "agricultural machinery". Therefore either, as suggested by Mr. Indra Kumar, the expression "agricultural machinery" includes the parts and accessories thereof or the latter is not included in the First Schedule at all thereby entitling the State Government to levy any entry tax thereon.
9. I may notice here that Sl. No. 58 of the First Schedule is "motor vehicles (all kinds) and parts and accessories thereof including chassis of motor vehicles". Therefore, the question of leviability of entry tax on parts and accessories of tractors could have been addressed with reference to this entry as well. But the revenue has rightly not relied upon the said entry for levy of tax because of the exempting Notification II No. FD 69 CET 92 dated April 30, 1992. Through this notification was subsequently cancelled by notification dated March 31, 1994 but that is also not of much consequence because by Notification No. FD 112 CET 93 (III) dated March 31, 1994, tax on motor vehicles and parts and accessories thereof were levied only in case these goods brought in the local area for consumption and use therein. Admittedly, the petitioner had brought parts and accessories in question not for consumption or use but for sale. Therefore, this and the subsequent notification are also inconsequential for the present case.
10. In view of the discussion as above, in my opinion, the circular of the Commissioner at annexure A cannot be sustained and is accordingly quashed. The respondent-assessing officer is directed to complete the assessments in keeping with the law laid down herein. The writ petitions are accordingly allowed to the said extent. No costs.
11. Writ petitions allowed.