2015 (2) TMI 430 - HC - VAT and Sales Tax

Interpretation of Tax Schedule: 'Hydraulic Excavator' Classified as Motor Vehicle, Not Machinery. Tribunal Upheld.

The court concluded that the 'Hydraulic Excavator' falls under Entry 13 of the Schedule as 'motor vehicles of all kinds' and not under Entry 2 as ... Classification - whether 'Hydraulic Excavator' is a machine under Entry 2 or a motor vehicle under Entry 13 of the Schedule attached to Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 - Held that:- The definition of a particular term in a particular statute is not to be used mechanically for the purpose of another statute unless it is applicable by necessary implication or otherwise some relevance is shown. In the judgment in Bose Abraham Etc. Vs. State of Kerala (2001 (2) TMI 890 - SUPREME COURT OF INDIA) the term 'motor vehicle' was defined in the Kerala Act by stating that the motor vehicle would mean the same definition as is provided under Act, 1988. It is in that context of the matter, Court held, that 'Excavators' and 'Road Rollers' are governed by the wider definition of motor vehicle under Act, 1988 and, therefore, would be motor vehicle for the purpose of Kerala Act. - The term 'machinery' is a wider term. It derives its meaning no doubt from the term 'machine' but its scope is wider than the term 'machine'. The word 'machine' itself has been taken from the Latin word 'Machina' which in turn has been derived from the Greek word 'Mekhane' a derivation from 'means, expedient, remedy'. One can say that earlier the concept of 'machines' was confined to the mechanized equipments but with the innovative ideas, discoveries and inventions, the concept of machines has undergone a huge but consistent change. Today, besides the traditional kind of machines, we have gone to the extent of having molecular machine, which is a concept designed in bio-technology. The present day Scientist and Researchers term these machines and equipments as part of 'nano-technology'. - the term 'machinery' is a genus and 'motor vehicle' is a species. The motor vehicles in wider sense may specify the term 'machine' and 'machinery' but when a special entry is provided in the same statute differently than the items which would specify the definition of 'motor vehicle' will have governed by that entry and not by 'machine' and 'machinery'. In that context now it would be necessary to examine, whether 'Hydraulic Excavator' can be said to be within the ambit of term 'motor vehicle' and if so it will stand excluded from the term 'machine' and 'machinery' and will be governed by the entry 'motor vehicle'. It is governed by Entry 13 of the Schedule for the reason that the legislature has provided that motor vehicle of all kinds are included therein excluding specifically only a Tractor otherwise even a Tractor would have been included in the aforesaid term. The mere fact that excavator in question works with hydraulic system would not change its very nature of being a excavator. The Tribunal, therefore, has rightly held that in wider sense a, 'Excavator' or 'Hydraulic Excavator' may be said to be a 'machinery' but when a specific entry is there, i.e., 'motor vehicles of all kinds', an excavator satisfying aforesaid entry will be governed by the same and cannot be taxed by treating it as a machinery only. The mere fact that the general goods are not being transported by Excavator would make no difference for the reason that legislature has used the term 'motor vehicles' in a very wide manner by providing that all kinds of motor vehicles would be governed by Entry 13 of the Schedule attached to Act, 2007. - Decided against Revenue. Issues Involved:1. Classification of 'Hydraulic Excavator' under the U.P. Value Added Tax Act, 2008.2. Definition and interpretation of 'motor vehicle' and 'machinery' under relevant statutes.3. Applicability of specific versus general statutory provisions.Detailed Analysis:1. Classification of 'Hydraulic Excavator' under the U.P. Value Added Tax Act, 2008:The primary issue in this case is whether the 'Hydraulic Excavator' should be classified under Entry 2 as 'machinery' or under Entry 13 as 'motor vehicles of all kinds' in the Schedule attached to the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007. The Assistant Commissioner, Trade Tax Division-3, Jhansi, initially classified it as 'machinery,' imposing a 2% entry tax. This decision was overturned by the Joint Commissioner of Appeal, who classified it as a 'motor vehicle.' The U.P. Trade Tax Tribunal upheld this classification, leading to the Revenue's revision petition.2. Definition and interpretation of 'motor vehicle' and 'machinery' under relevant statutes:The term 'motor vehicle' is not defined in the Act, 2007. The court referred to the definition under the Motor Vehicles Act, 1988, which includes any mechanically propelled vehicle adapted for use upon roads. The court highlighted that the definition of a term in one statute should not be mechanically applied to another unless relevant. The court examined various definitions and interpretations of 'machinery' and 'motor vehicle' from legal precedents and dictionaries. It concluded that 'Hydraulic Excavator' fits the broader definition of 'machinery' but also satisfies the characteristics of a 'motor vehicle' as it is used for carrying goods like stone boulders and for excavation.3. Applicability of specific versus general statutory provisions:The court applied the principle of Generalia Specialibus non Derogant, which means that specific provisions override general ones. The court held that while 'machinery' is a general term, 'motor vehicles of all kinds' is a specific entry in the Schedule. Therefore, even though a 'Hydraulic Excavator' is a type of machinery, it should be classified under the specific entry of 'motor vehicles' due to its characteristics and the legislative intent to cover all kinds of motor vehicles in Entry 13, excluding only tractors.Conclusion:The court concluded that the 'Hydraulic Excavator' falls under Entry 13 of the Schedule as 'motor vehicles of all kinds' and not under Entry 2 as 'machinery.' The Tribunal's decision was upheld, and the revision petition by the Revenue was dismissed with costs quantified at Rs. 5,000/-. The judgment emphasized the importance of interpreting statutory provisions in light of specific entries and legislative intent, ensuring that specific classifications take precedence over general ones.