Works contract machinery classification: dual character as a motor vehicle does not shift goods to the residuary entry.

Construction equipment used in execution of a works contract was treated as machinery for the purpose of entry 35 of the Gujarat VAT notification, even though it could also fall within the definition of a motor vehicle under the Motor Vehicles Act. The decisive test was the statutory description of the goods as machinery used in works contract execution, and the absence of a separate motor vehicle entry meant that dual character did not shift the goods to the residuary entry. A later amendment excluding machinery in the form of motor vehicles indicated that, before 15.02.2010, such goods remained covered by entry 35, and the exclusion was not shown to be retrospective.

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Issues: Whether construction equipment used in execution of works contract, though also capable of being treated as motor vehicles, fell within entry 35 of the notification issued under section 5(2) of the Gujarat Value Added Tax Act, 2003 or was classifiable under the residuary entry.

Analysis: The equipment was not in dispute as being used in execution of works contract, and the materials placed showed that it was machinery by its design, mechanism and use. A machine satisfying the description in entry 35 could not be excluded merely because it also answered the description of a motor vehicle under the Motor Vehicles Act. The absence of a separate entry for motor vehicles meant that the decisive test was whether the goods were machinery used in execution of works contract. The later amendment excluding machinery in the form of a motor vehicle indicated that prior to 15.02.2010 such goods were within entry 35, and the amendment was not shown to be declaratory or retrospective.

Conclusion: The equipment was covered by entry 35 and not by the residuary entry; the questions were answered against the Revenue and in favour of the assessee.

Ratio Decidendi: Where goods answer the statutory description of machinery used in execution of works contract, their additional character as motor vehicles does not take them out of the specific entry in the absence of an express exclusion, and a later exclusionary amendment will not operate retrospectively unless clearly so provided.

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