Plain-meaning construction of tax-free entries gave agricultural pump sets exemption, but later Schedule C amendment made below-5 HP sets taxable.

Agricultural submersible pump sets were covered by Entry 1(D)(9) of Schedule B as tax-free goods up to 30.06.2006, because the entry was construed on its plain terms to include the complete pumping set and was not cut down by references to components or prime movers. After insertion of Entry 71-A in Schedule C, pump sets below 5 HP became taxable from 01.07.2006, since the new entry expressly placed them in the taxable schedule and Note 4 deemed such goods excluded from Schedule B. The later specific entry therefore prevailed for its period of operation, producing a mixed taxability result.

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Issues: (i) Whether submersible pump sets used for agricultural purposes were exempt under Entry 1(D)(9) of Schedule B to the Haryana Value Added Tax Act, 2003 for the period up to 30.06.2006. (ii) Whether, after insertion of Entry 71-A in Schedule C, pump sets below 5 HP became taxable from 01.07.2006 notwithstanding their earlier inclusion in Schedule B.

Issue (i): Whether submersible pump sets used for agricultural purposes were exempt under Entry 1(D)(9) of Schedule B to the Haryana Value Added Tax Act, 2003 for the period up to 30.06.2006.

Analysis: Entry 1(D)(9) covered agricultural pumping sets of all kinds, including submersible pumps, as a tax-free item. The entry was held to be wide enough to include the complete pumping set, and the reference to electric/diesel pump sets of 5 HP and above in the list of components was treated as relating to a component or prime mover, not as cutting down the scope of the main exemption for pumping sets. The words of the entry were given their plain meaning without addition or subtraction, and the specific inclusion of submersible pumps within the tax-free schedule prevailed over any attempt to treat them as falling in a general or residual taxable category for that period.

Conclusion: The issue was answered in favour of the assessee; agricultural submersible pump sets were tax free up to 30.06.2006.

Issue (ii): Whether, after insertion of Entry 71-A in Schedule C, pump sets below 5 HP became taxable from 01.07.2006 notwithstanding their earlier inclusion in Schedule B.

Analysis: Entry 71-A specifically brought pump sets below 5 HP into Schedule C, and Note 4 to Schedule C provided that goods described in that schedule were deemed to be excluded from Schedule B. Once the legislative amendment expressly shifted such goods into the taxable schedule, the earlier tax-free treatment under Schedule B could no longer prevail. The competing-entry argument and the plea for a beneficial construction were rejected because the statutory exclusion in Schedule C made the entries mutually exclusive from 01.07.2006 onwards.

Conclusion: The issue was answered against the assessee; pump sets below 5 HP became taxable from 01.07.2006.

Final Conclusion: The appeals succeeded only for the pre-amendment period and failed for the period after the amendment, resulting in a mixed outcome on the taxability of agricultural submersible pump sets.

Ratio Decidendi: A goods entry in a tax-free schedule must be construed on its plain terms, and where a later taxable entry expressly excludes the goods from the earlier schedule, the later specific entry prevails for the period of its operation.

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