Works-contract machinery exemption applies to oil coolers before the motor-vehicle exclusion, but not after the amendment.

Entry 35 under the Gujarat VAT Act covered machinery, including parts and accessories used in execution of works contracts, so oil coolers fitted to such machinery remained within the entry before 15.02.2010 even if the machinery also answered the description of a motor vehicle. The later amendment excluding machinery in the form of, or attached to, a motor vehicle was treated as a substantive prospective change, not a clarification. After 15.02.2010, the express exclusion applied and oil coolers used for motor vehicles fell outside entry 35.

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Issues: (i) Whether oil coolers used in machinery for execution of works contract were covered by entry 35 under section 5(2) of the Gujarat Value Added Tax Act, 2003 prior to 15.02.2010 even if such machinery was also a motor vehicle or attached to a motor vehicle; (ii) Whether, after the amendment effective from 15.02.2010 excluding machinery in the form of a motor vehicle or attached to or mounted on a motor vehicle, such oil coolers continued to fall within entry 35.

Issue (i): Whether oil coolers used in machinery for execution of works contract were covered by entry 35 under section 5(2) of the Gujarat Value Added Tax Act, 2003 prior to 15.02.2010 even if such machinery was also a motor vehicle or attached to a motor vehicle.

Analysis: Entry 35 covered machinery, including parts and accessories, used in execution of works contract. The fact that the machinery also answered the description of a motor vehicle did not alter its essential character for the period before the exclusion was inserted. The amendment introduced later was treated as a substantive change and not as a clarificatory or retrospective one.

Conclusion: The oil coolers used in such machinery were covered by entry 35 prior to 15.02.2010, and the issue was decided in favour of the assessee.

Issue (ii): Whether, after the amendment effective from 15.02.2010 excluding machinery in the form of a motor vehicle or attached to or mounted on a motor vehicle, such oil coolers continued to fall within entry 35.

Analysis: Once the entry expressly excluded machinery in the form of, or attached to, a motor vehicle, parts and accessories of such excluded machinery also ceased to be covered. The amended language was held to give effect to a specific exclusion operating from the date of amendment.

Conclusion: After 15.02.2010, the oil coolers used for motor vehicles were excluded from entry 35, and this issue was decided in favour of Revenue.

Final Conclusion: The Tribunal's view was upheld for the pre-amendment period and reversed for the post-amendment period, leaving the State's appeal unsuccessful overall.

Ratio Decidendi: A statutory entry covering machinery and its parts and accessories used in works contract includes equipment that also functions as a motor vehicle until the legislature expressly excludes such motor vehicles by a substantive amendment operating prospectively.

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