TaxTMI 
TaxTMI 
2013 (7) TMI 301
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....f the petitioner Company; (b) Quash notices Annexure PE and PF issued by respondent No. 3 by illegally assuming jurisdiction and describing himself as the Assessing Authority, which jurisdiction is vested in respondent No. 5 alone and in consequence thereof to quash Assessment Orders Annexure PH, PJ and PK which have been passed by the said respondent No. 5 Assessing Authority; and (c) Hold and direct that Term and Condition No. 17 of Annexure PC relating to construction of Poly Houses and Installation of Micro Irrigation Systems of Part-A and Part-B of the Pandit Deen Dayal Kisan Bagwan Samridhi Yojana, stood waived as being directive and not mandatory so far as the conduct of the business by the petitioner is concerned and in the alternative to quash the same as being violative of the Principles enshrined in Article 14, 19(1)(g) and Article 301 of the Constitution of India." 2. The impugned order dated 28th January, 2013 (Annexures PAB collectively) were passed by Appellate Authority-cum-Deputy Excise and Taxation Commissioner (Central Zone), Mandi, District Mandi, H.P., affirming the orders passed on 5.7.2012 by Assessing Authority for the assessment years 2009-10, 2010....
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....tance. This Court cannot entertain applications raising grievances involving factual issues raised by the parties. GRA being headed by a former Chief Justice of the High Court would indisputably be entitled to adjudicate upon such disputes. It is also expected that the parties should ordinarily abide by such decision. This Court may entertain an application only when extraordinary situation emerges." Thus, in view of the above, the High Court ought to have directed the oustees to approach the GRA for redressal of their grievances and if any person was further aggrieved of the directions issued by the GRA, he could have approached the High Court after full fledged adjudication of the factual issues by the GRA." Kanaiyalal Lalchand Sachdev and others Vs. State of Maharashtra and others (2011) 2 SCC 782. Paragraph 23 is reproduced herein below:- "23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is well settled that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is avail....
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.... Pradesh under scheme/Yojna, as the petitioner was declared successful tenderer along with other companies and has entered into agreement (indicated in Annexure PC of the present writ petition). The petitioner Company recovers the cost of such equipment 20% from the farmers and balance 80% from department of Agriculture in the form of subsidy. Though the petitioner Company had been supplying above materials to the farmers of State of Himachal Pradesh by issuing bills and invoices from its local office at Mandi, H.P., however, the petitioner has been avoiding payment of Value Added Tax (VAT) payable under 'VAT Act' and the Rules framed therein under the garb of treating the transaction of exempted goods being made in inter-State trade. 6. The assessing officer had made survey of the business premises of the petitioner Company and had issued notices and has made assessments for the years, 2009-10, 2010- 11 and 2011-12 (Annexures PH, PJ and PK), raising demand of 'VAT' with interest and penalty vide assessment order dated 5.7.2012 for respective three years. The contention of the petitioner that it is supplying tax free manually operated agricultural implements, was not accepted by....
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....er the 'Yojna' directly to the farmers of Himachal Pradesh is interstate sale and is not an intra-State sale. (vi) The sprinkler is an ordinary agricultural implement indicated at Sr. No. 6 of entry 22(A) of Schedule "B" of Himachal Pradesh General Sales Tax Act, 1968 and is under exempted good from tax. (vii) The condition No. 17 of (Annexure PC) is only directory which indicates as "No billing is allowed from outside the state so the companies will have to obtain the necessary TIN No. within 15 days from the date of empanelment.", provided under the terms and conditions to be followed/observed by the petitioner-Company short listed on the basis of technical and financial bids to act as service provider for construction of Poly Houses and installation of micro irrigation systems i.e. Part-A and Par-B under Pt. Deen Dayal Kisan Bagwan Samridhi 'Yojna', such condition is an impediment in carrying out the installation of micro irrigation system under 'Yojna', as such, be declared as ultra virus. (viii) Almost every homeowner in North America spends some amount of time and money providing water to outdoor plants by accomplishing in two ways: 1. Manual irrigation with hoses....
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.... being treated as exempted-good from tax in the above referred other States, as such, is to be understood and treated as agricultural implement in State of H.P. and exempted from tax. (x) Vide letter dated 19.3.2012, (Annexure-PB), from Divisional Engineer (Soil Conservation), Shimla, Himachal Pradesh issued to the petitioner, the entire operation of sprinkler is shown as manual and extremely simple. The relevant extract of the letter is given as below:- "The method of applying water above the ground surface, somewhat resembling rainfall, is known as sprinkler irrigation technique. Himachal Pradesh is a hilly state and the agriculture land ere is mostly on slops with natural gradient and therefore water for irrigating the fields from various sources travels from top to bottom, with the force of gravity, through water channels locally known as "Kuhl". The use of Sprinklers by farmers for irrigating their fields saves up to 50% water. Not only the surplus water could be utilized elsewhere but irrigating using Sprinklers also limits soil erosion from the fields. In addition, the farmer gets increased and improved yield. Typically, for operation of Sprinklers, a tank has to....
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....1975) 1 SCC 733. Reliance has also been placed on the judgment of Hon'ble Supreme Court in Sahney Steel and Press Works Limited Vs. Commercial Tax Officer and Others (1985) 4 SCC 173, paragraphs 8, 10 and 11, where movement of goods from one State to another was result of a covenant in the contract of sale or an incident of that contract as the buyer has placed the order with the company's branch office for supply of specific goods and the branch office communicated the terms and specifications of the order to the company's registered office and situated in another State, where manufacturing of goods was being done and accordingly dispatch of goods was made to the branch office and branch office delivered the goods to the buyer, raising bills and receiving sale price, such transaction was treated to be inter- State sale. (b) In reference to the observations made in State Trade Corporation of India Ltd. and another vs. The State of Mysore and another, AIR 1963 SC 548, paragraphs 9, 10 & 12, the present transaction of the petitioner was said to be inter-State transaction. (c) The learned counsel for the petitioner has referred and relied upon the decision of Hon'ble Supreme Cou....
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....bound by all Forest Department rules and regulations in connection with the purchase and transit of the forest produce." It has been pointed out by learned counsel for the respondents that in the tender document there was clear indication that the principal place of business and additional place of business of the respondents were all outside the State of Orissa. The details of the registrations under the West Bengal Act and the Central Act were indicated. The way bill of transport and consignment of goods despatched from outside the State of West Bengal to any place in West Bengal was also brought on record. 13. Reference was also made to the certificate issued by the Joint Commissioner, Income Tax, West Bengal under Section 206C of the Income Tax Act, 1961 (in short the 'Income tax Act') to the Corporation to the effect that the respondents would be utilizing the tendu leaves for the purpose of manufacture and not for trade purpose and, therefore, authorized the Corporation not to collect tax at source in terms of Section 206C of the Income Tax Act. 14. Though mere knowledge about the ultimate destination cannot be sufficient, yet cumulative effect of the factual scenari....
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....the sale but takes place after the property is purchased by B and becomes his property". 17. It is to be noted that the position in law as stated in the same paragraph was specifically dissented from in Commissioner of Sales Tax, U.P. and Ors. v. M/s Bakhtawar Lal Kailash Chand Arhti and Ors. (1992 (3) SCC 750). In para 15 it was noted as follows: "15. Shri Sehgal relies particularly upon "Case No. III" contained in the first extract and clause (iii) mentioned in the second extract. Relying upon these statements, the learned counsel contends that a concluded sale must necessarily take place in the other State and not in the State from which the goods emanate. According to him, a concluded or a completed sale must follow the movement of goods and should not precede. If a purchase or sale is complete in the State from which the goods emanate, he says, it can never be an inter-State purchase or sale. We cannot accede to this understanding of the learned counsel. The said observations, no doubt rather widely worded, must be understood in the context of the question that arose for consideration in that case viz., whether an agreement of sale is included within the definition of 's....
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....oods would be moved; in other words, a sale occasions a movement of goods when the contract of sale so provides" (page 407). The view of the majority was approved by this Court in Cement Marketing Co. of India v. State of Mysore (1963 (3) SCR 777); State Trading Corporation of India v. State of Mysore (1963 (3) SCR 792) and Singareni Collieries Co. v. State of Andhra Pradesh (1966 (2) SCR 190). In K.G. Khosla & Co. v. Deputy Commissioner of Commercial Taxes, counsel for the Revenue invited the court to reconsider the question but the Court declined to do so. In a recent decision of this court in Oil India Ltd. v. The Superintendent of Taxes (1975 (3) SCR 797) it was observed by Mathew, J., who spoke for the Court, that: (1) a sale which occasions movement of goods from one State to another is a sale in the course of inter-State trade, no matter in which State the property in the goods passes; (2) it is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement; and (3) it is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant rega....
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....es of Interpretation, which is our indigenous system of interpretation, one of the principles is: The above principle means the popular meaning overpowers the etymological meaning. 15. Keeping the above principle in mind we may now consider whether an Animal Driven Vehicle can be said to be an agricultural implement. In our opinion it cannot, for the obvious reasons that in common parlance implements are usually regarded as tools used by human beings with their hands (and sometimes with their legs), or driven by animal power. Thus, a plough which is driven by oxen or horses would be regarded as an agricultural implement. Similarly, a hoe or a spade would be agricultural implements. However, a bullock cart which is used for carrying the agricultural produce from the farm to the market or the sugar factory cannot, in our opinion, be regarded as an agricultural implement, because in common parlance it would not be regarded by people as an implement. A bullock cart is surely not a tool, though the plough which it pulls (for furrowing the land) is certainly a tool and therefore, an agricultural implement. 18. Before parting with this case, we would like to say that it is deeply....
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....well be used in many agricultural instruments where mechanised farming takes place. But by itself when sold as a spare part it cannot by itself become an agricultural implement. The exemption was with regard to an agricultural implement as contemplated by Entry 34 in Schedule 'B' to the Act. Undoubtedly, later on by amendment to Entry 34 on April 15, 1971, belt pulley attachment has been introduced in Entry 34. On this account alone it cannot however, be contended that the amendment merely makes explicit what was implicit in the entry as it stood prior to the amendment. The Tribunal rightly held that if belt pulley is used in a tractor and sales tax is levied on the sale of tractor no separate sales tax is levied on belt pulley. We do not propose to view the matter from this angle. We must examine whether a belt pulley attachment when sold as a spare part would be comprehended in Entry 34 which sets out agricultural implements exempted from the levy of sales tax. Obviously as stated earlier belt pulley attachment which can be used in various mechanical appliances or devices by itself cannot be said to be an agricultural implement. To comprehend it in the generic term "agricultural ....
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....f the State that the Department of Agriculture of State of Himachal Pradesh, which has floated the 'Yojna' for providing assistance and subsidy to the farmers of Himachal Pradesh and the Department of Agriculture has issued the terms and conditions (vide Annexure PC) to be followed by the petitioner-Company, as such, the petitioner is legally bound to abide by said terms and conditions. Since the subsidy in question is to be granted by the Agricultural Department, after recording satisfaction with the quantity of equipments supplied by the petitioner-Company, as such, the Department of agriculture of State of Himachal Pradesh is a necessary party and non-joinder of such party is an impediment factor, whereby the prayers of the petitioner are to be rejected. In view of the decision of Hon'ble Supreme Court in Sales Tax Officer, Jodhpur and another Vs. Shiv Ratan G. Mohatta, (1965) 16 STC 599, wherein it is held that it is not the object of Article 226 of Constitution to convert High Courts into original/appellate authorities whenever the petitioner/assessee chose to attack an assessment order on the ground that a sale was exempted from tax. The Department of Agriculture has empanell....
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....goods said to take place in the course of inter-State trade or commerce-A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase--- (a) occasions the movement of goods from one State to another, or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1.- Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation 2.- Where the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State." (c) Section 6 of the Central Sales Tax Act, 1956 deals with liability to tax on inter-State sales. (d) Section 2(v) of the H.P. VAT Act, 2005 defines the sale as below:- "sale" means any transfer of property in goods for cash o....
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....on of law and that is, a sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce, if the sale or purchase (a) occasions the movement of goods from one State to another or (b) is effected by transfer of documents of title to the goods during their movement from one State to another. For purposes of clause (b) of Section 3, Explanation I says that where the goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation II clarifies that when the movement of goods commences and terminates in the same State, the movement of goods will not be deemed to be from one State to another merely because of the fact that in the course of such movement, the goods pass through the territory of any other State. (c) For a sale to be in the course of inter-State trade or commerce under Section 3(a), the two conditions must be fulfilled. There must be sale of goods. Such sale should occasion the movement of the goods from one State to another. A sale would be deemed to have occa....
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.... of VAT rule of Haryana Govt. having challan outward no. A-6883883 dated 3.3.2010, A-6883864 dated 6.2.2010, A-3408625 dated 12.6.2009, B-2430349 dated 20.11.2010 also depict that the appellant consigned the goods to Sub Divisional Soil Conservation Officer Mandi, Kangra & Una. The documents and invoice, bills and other supporting documents in respect of installation of micro irrigation system in favour of Madan Lal R/o Village Roch, P.O. Nehra, Tehsil Shimla has also been perused, as produced by the State, which shows that different rates prescribed for the quantities of components and the amount of Rs.10,780/- has been charged from Sh. Madan Lal. In all these bills and invoices local address of the petitioner Company has been given as Nagchala, Mandi and the completion certificate of the installation of sprinkler along with other equipments has also been counter signed by the Sub Divisional Soil Conservator, Shimla. Such records also reveals that the transaction in question was intra -State, but not inter-State. In these circumstances, Section 3 of The Central Sales Tax Act is not attracted. 15. The analysis of documents no doubt reveal that the petitioner-Company has brought ....
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....ing work e.g. Agricultural implements. 2) An article of equipment, as household furniture, clothing or the like. According to Oxford Dictionary: "A tool or a utensil" According to Oxford Thesaurus: APPARATUS, APPLIANCE, CONTRIVANCE, DEVICES, GADGET, INSTRUMENT, MECHANISM, TOOL, UTENSIL. (c) DIFFERENCE BETWEEN DEVICE & IMPLEMENT: From the study of definitions as stated above one thing which we can trace out is that Implements and device are synonyms. But still there exists a hairline difference between the two. Going through the definitions of device we found use of words "particular" & "specific" whereas, while studying the definitions of Implement general phrases like "work" & "purpose" have been used which lead us to derive a conclusion that device is something which is more specific, not general the device can be used to achieve some or only one particular purpose. On the other hand Implements are those which can be used in any purpose or work which can be done through them. "Implement" is used in most generic sense e.g. A knife is a well known implement of kitchen but number of times used outside it, not only for the purpose it was meant to be but also f....
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....ture implement. In the case of "Gur", agricultural process finishes when sugar cane is harvested and bought home, and preparation of "gur" from it is not continuation of the agricultural process, however while a meaning may be given to "agriculture". As any implement that is used in preparing "gur" is not "agriculture Implements", comes crusher or boiling pans are not "agricultural implements" In Delta Engineering Co. Pvt. Ltd. Vs. Commissioner Income Tax (1963) 14 STC 515, It was observed that centrifugal water pumps used for pumping water from the well are not "agricultural implements". "Agricultural Implements" means the apparatus or instruments employed in agriculture. Merely because water pumped out from wells by means of the water pumps can be used for irrigation, it cannot be said that they are instrument employed in agriculture. The Bharat Engineering & Foundry Works case (supra) was considered and it was observed that in that case Court dealt with the meaning of "agriculture" and "agricultural implement" and stated that any implement that is used in an agricultural process is an agricultural implement. Pumping water from well is not by itself an agricultural proce....
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....gy, which is the result of position of an object or is an ability to do work. Standing water is an example of potential energy. It is called as conserved mechanical energy and depends upon its mass or height. One more aspect is gravitational potential energy of an object:- which is due to its position above the surface of earth is that potential energy is maximum at height and kinetic energy is maximum at bottom. The result of potential energy and kinetic energy is mechanical energy. In general, the faster an object moves (in our case water) or greater its mass or height, then greater the amount of energy it can possess. An object's kinetic energy or potential energy can increase with increasing mass. A large river system has great mass, elevation and motion and therefore, can be a tremendous source of energy. So it is the energy produced by moving water i.e. kinetic energy which ultimately result into rotation of sprinkler. The inference thus is that it is not animal driven or manually operated. In order to know whether sprinkler is an agricultural implement- if so whether taxable under H.P. VAT Act or not. When we go through the definition of device, we come ....