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of <h1>Interpretation of Tax Exemptions: Unipole exempt, Bipole under review, Aluminum ladders taxed</h1> The court considered the interpretation of 'agricultural implements manually operated' under the Karnataka Value Added Tax Act, 2003. It ruled that the ... Classification of goods - Agricultural tree climbing apparatus-Unipole-manually operated - Agricultural tree climbing apparatus-Bipole-manually operated are to be construed as “agricultural implements manually operated” - whether falls under Serial No.1 of 1st Schedule to the Act? - HELD THAT:- The expression “Agricultural implements” is not defined under the Act. As per New Webster’s Dictionary ‘implement’ means an instrument, tool or utensil; an article assisting in carrying on manual labors. As per Oxford Dictionary, ‘implements’ means tools, instruments. Hence, it can be construed that ‘Agricultural implements’ are apparatus or tools or instruments employed in agriculture. In the modern technological era, these products are new inventions to suit the present day farming in view of the shortage of skilled agricultural labourers. The product (a) is a kind of commonly used agricultural implement, regarded in common parlance according to the sense of agriculturists, ordinary traders and merchants as agricultural implements - the product Agricultural tree climbing apparatus-Unipole is an agricultural implement falling under Serial No.1 of First Schedule to the Act exempted from tax under Section 5(1) of the Act. Agricultural tree climbing apparatus-Bipole - HELD THAT:- The Authority for clarification has not applied its mind to examine the product according to common parlance or trade parlance. No reasons are assigned to classify the product under Section 4(1)(b)(iii) of the Act. Photographs of the product produced by the assessee before us also do not disclose the correct description of the product. A detailed examination of the product is required for classifying the commodity. No such exercise is done by the Authority for clarification before giving a finding - Matter remanded back to the ACAR to examine the product in the light of the observations made herein above and to pass a speaking order after providing an opportunity of hearing to the appellant. Appeal allowed in part - part matter on remand. Issues Involved:Interpretation of the term 'agricultural implements manually operated' under the Karnataka Value Added Tax Act, 2003 for the purpose of levy of tax on specific products.Detailed Analysis:1. Background and Facts:The appellant, a co-operative society, sought clarification from the Authority for Clarification and Advance Ruling regarding the tax rate applicable to three specific products used in agriculture. The Authority ruled that all products were subject to a tax rate of 14.5%, leading the appellant to challenge this decision.2. Contentions of the Appellant:The appellant argued that the products in question were primarily used for agricultural purposes by farmers in coastal areas for activities like spraying pesticides and harvesting crops. They contended that these products should be considered exempted goods under the Act.3. Contentions of the Revenue:The revenue, represented by counsel, supported the ruling of the Advance Ruling Authority regarding the tax rate applicability on the products.4. Key Legal Question:The main issue before the court was whether the specific products, namely agricultural tree climbing apparatus - Unipole and Bipole - manually operated, fell under the category of 'agricultural implements manually operated' as per the Act.5. Legal Interpretation and Precedent:The court referred to the definition of 'agricultural implements' as tools or instruments used in agriculture. Citing a Supreme Court case, the court emphasized interpreting terms in their common parlance meaning for tax statutes.6. Judgment on Product (a):The court concluded that the Unipole apparatus was indeed an agricultural implement falling under the exempted category, overturning the Authority's decision.7. Judgment on Product (b):For the Bipole apparatus, the court found that the Authority had not adequately examined the product according to common trade parlance. Therefore, the matter was remanded back to the Authority for proper evaluation.8. Judgment on Product (c):The Aluminum ladders were confirmed to be taxed at 14.5%, as agreed by the appellant's counsel.9. Final Decision:The court set aside the ruling on Product (a), remanded Product (b) for further assessment, and confirmed the tax rate on Product (c). The appeal was partly allowed based on the above determinations.In conclusion, the court's detailed analysis and interpretation of the term 'agricultural implements manually operated' under the Act led to a nuanced judgment on the tax applicability of the specific agricultural products in question, ensuring a fair and thorough review of the matter at hand.
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