2015 (10) TMI 46 - HC - VAT and Sales Tax

Classification of L&T 752 Vibratory Compactor under Karnataka Tax on Entry of Goods Act

State of Karnataka Versus R. Venkatareddy

State of Karnataka Versus R. Venkatareddy - [2015] 77 VST 130 (Kar) Issues Involved:1. Classification of L & T 752 Vibratory Compactor as a 'motor vehicle' or 'machinery'.2. Applicability of Karnataka Tax on Entry of Goods Act, 1979 (KTEG Act) versus Karnataka Sales Tax Act, 1957 (KST Act).3. Requirement of registration under the Motor Vehicles Act, 1988 for tax liability under the KTEG Act.Issue-Wise Detailed Analysis:1. Classification of L & T 752 Vibratory Compactor:The primary issue was whether the L & T 752 vibratory compactor should be classified as a 'motor vehicle' or 'machinery'. The Karnataka Appellate Tribunal (KAT) held that the compactor is a 'motor vehicle' and not liable to tax under the KTEG Act. The State contested this, arguing that previous judgments under the Karnataka Sales Tax Act (KST Act) classified vibratory compactors as 'earth moving machinery' and not motor vehicles. The court examined these judgments and found that under the KST Act, vibratory compactors were classified as earth moving machinery, thus falling under entry 1(i)(a) of Part M of the Second Schedule, which deals with machinery and parts.2. Applicability of KTEG Act versus KST Act:The court analyzed the applicability of the KTEG Act versus the KST Act. It was noted that the definitions and entries under the KST Act could not be directly applied to the KTEG Act. The KTEG Act has its own definitions, and the term 'motor vehicle' is defined under Section 4A(d) of the KTEG Act, which refers to the definition under the Motor Vehicles Act, 1988. The court emphasized that the classification under the KST Act does not influence the classification under the KTEG Act.3. Requirement of Registration under the Motor Vehicles Act:The court examined whether the lack of registration under the Motor Vehicles Act, 1988 would exclude the compactor from being classified as a motor vehicle under the KTEG Act. Section 4B of the KTEG Act, which deals with the levy of tax on motor vehicles, states that tax is levied on motor vehicles that are liable for registration under the Motor Vehicles Act. The court referred to the apex court's judgment in Bose Abraham v. State of Kerala, which held that vehicles suitable for use on roads, even if used in enclosed premises, are considered motor vehicles and are liable for registration.The court concluded that the compactor, being mechanically propelled and adapted for use on roads, falls under the definition of 'motor vehicle' as per Section 2(28) of the Motor Vehicles Act, 1988. The fact that the compactor was not registered under the Motor Vehicles Act did not exclude it from being classified as a motor vehicle for the purposes of the KTEG Act.Conclusion:The court held that the compactor is a 'motor vehicle' under the KTEG Act and not 'machinery' as contended by the Revenue. The judgments under the KST Act were not applicable to the KTEG Act. The substantial question of law was answered in favor of the assessee, and the revision petition was dismissed with no costs.