TaxTMI 
TaxTMI 
1997 (11) TMI 491
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....Appellate Tribunal at Bangalore (hereinafter referred to as "the Tribunal") confirming the orders of assessment, annexures A to D and the order, annexure E, made in the appeals by the first appellate authority. 2A. A few facts, which have a bearing for the disposal of these petitions, may be set out as under: The petitioner is admittedly a dealer in industrial machinery and its parts. It further claims that it is also a dealer in electrical motor and grinding mills and also a distributor for Kirloskar lathe machines. The assessing authority, in annexures A to D, for the assessment years April 1, 1982 to March 31, 1983, April 1, 1983 to September 30, 1983, October 1, 1983 to September 30, 1984 and October 1, 1984 to September 30, 1985 assessed the petitioner for payment of entry tax in respect of lathe machines, grinding mills and electrically operated motors on the ground that the petitioner purchased the said items of machineries and had brought it within the local area as provided under section 3 of the Act. The said orders of assessment were unsuccessfully challenged in appeal before the Deputy Commissioner for Commercial Taxes, the first appellate authority, and also befo....
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....trical goods including the electrically operated motors, etc., as set out in item 13 of the notification bearing No. FD 76 CET 84 (I) dated November 13, 1984, came to be superseded and levy was removed with effect from April 1, 1983 to October 23, 1984. He further pointed out that by virtue of notification bearing FD No. 73 dated November 13, 1984, the petitioner was assessed for payment of entry tax on electrical motors at one per cent; and therefore, the learned counsel would submit that the electrical motors dealt with by the petitioner, is not liable for payment of entry tax after April 1, 1983. For all these, he reiterates that the electrical motors, in which the petitioner was dealing, cannot be considered as an industrial machinery. 4.. Sri Shivayogiswamy, learned Government Pleader, while seriously countering the submissions of the learned counsel for the petitioner, submitted that the orders impugned do not suffer from any infirmity much less an infirmity which calls for interference by this Court in exercise of its jurisdiction either under article 226 or under article 227 of the Constitution of India. He submitted that the finding recorded by the three authorities are....
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....or any other law, where any dealer or person prefers claim under sub-section (3) of section 3 that he is not liable to pay tax under this Act in respect of any goods on which tax is leviable, such dealer or person shall be deemed to be the dealer or person liable to tax under this Act, unless he proves that in respect of such goods tax under this Act has already been paid or has become payable or that tax under the Karnataka Tax on Luxuries Act, 1979 (Karnataka Act 22 of 1979) has already been paid or has become payable, as the case may be." 6.. In so far as the contention of Sri Prasad that the lathe machines, in respect of which the petitioner has been assessed for payment of entry tax, were not brought within the local area is concerned, it is relevant to point out that the assessing authority as well as the first appellate authority and the second appellate authority, i.e., the Tribunal, in the light of the contentions raised by the petitioner, after verification of the documents produced by the petitioner, have held that lathe machines were despatched in the name of the petitioner-firm and sold to them and, therefore, it is clear that the goods have entered into the limits ....
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....e petitioner has failed to discharge the said burden. I do not find any error in the said finding recorded by all the three authorities, referred to above. 6a. However, it is the contention of Sri Prasad that sub-sections (1) and (2) of section 3 must be read together and if it is so read, the tax is levied under the Act in respect of the entry of any scheduled goods into a local area and is made payable by the registered dealer or the dealer liable to get himself registered, who brings or caused to be brought into local area, whether on his account or on account of his principal, etc., provided that the scheduled goods are brought into the local area for consumption, use or sale therein. In other words, it is his submission that since the goods in question, even assuming are caused to be brought into the local area by the petitioner, unless it is shown that they were brought into the local area for the purpose of consumption, use or sale therein, it is not permissible to assess the petitioner for payment of entry tax solely on the ground that the petitioner caused the entry of the scheduled goods into the local area. In support of this submission, Sri Prasad relied upon the dec....
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.... is concerned, I must state that I am also unable to accept the submission of Sri Prasad though he took considerable pains to show that grinding mills are not industrial machineries. 8A. Item 8 of the Schedule given to the Act provides for levy of tax on "industrial machinery". Though during the assessment years in question, industrial machinery for the purpose of item 7 to the Schedule has not been either defined or explained, by means of amendment by Karnataka Act 18 of 1989, in Explanation III, "industrial machinery" has been defined as follows: "Explanation III.-'Industrial machinery' for the purpose of entry 7 of the Schedule shall mean such machinery which are generally used by an industrial unit whether or not such unit is a factory as defined under the Factories Act, 1948, for manufacturing or processing of goods and includes earth moving machinery and such other machinery used for mining, building, construction (including laying of roads), fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning or any movable or immovable property." From a reading of the explanation culled out above, it is clear that "industrial machine....
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.... definition provided. Therefore, the question is whether the grinding mills are generally used by an industrial unit or not. The establishment of the business for the purpose of processing corn or conversion of wheat or gram into wheat products, such as, suji, atta, maida, etc., as claimed by the petitioner in para 7 of these petitions, can be understood as establishment of an industrial unit. However, the size or magnitude of the industrial unit may vary from person to person depending upon the financial capabilities of the person who establishes the unit. But, merely because it is a small unit, it cannot be understood or held that it is not an industrial unit. Any machinery, which is capable of being used as an industrial machinery, in my view, must be understood and held to be an industrial machinery. The petitioner except asserting in its objections filed before the assessing authority that flour mills and grinding mills are not industrial machinery, has not stated the basis for its plea that they are not industrial machineries. The only basis for the said plea was that in the flour mills, nothing is manufactured. Even for the sake of argument that what is produced in the grind....
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.... flour mill is a machinery which is run by mechanical process. Under these circumstances, if the meaning attached to the expression "industrial machinery" given in Explanation III is taken into consideration, the grinding mill can be considered as an industrial machinery, which is capable of being used in an industrial unit. In my view, the principle laid down in the said decision cannot be made applicable to take the view that the flour mills and grinding mills are not industrial machineries. 11.. Finally, Sri Prasad submitted that the assessment of electrically operated motors on the basis that they are industrial machineries and parts and accessories thereof, is totally erroneous in law. According to him, the electrically operated motors cannot be treated as a part of industrial machinery in respect of which levy can be imposed under item 7 of the Schedule given to the Act. The learned counsel pointed out that the electrically operated motors are electrical goods within the meaning of entry 13 given to the Schedule to the Act, which was in the statute book till March 31, 1983 and since subsequent to March 31, 1983, the levy of tax on electrically operated motors has been remo....
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....erefore, he would submit that since the electrical goods including electrically operated motors, etc., were throughout treated as a separate item of levy than "industrial machinery and parts and accessories thereof", it is not permissible for the authorities after the deletion of the electrical goods including the electrically operated motors, etc., to treat industrial machinery and parts and accessories thereof as a separate item of levy and levy tax. 12.. I am unable to persuade myself to accept the submission of the learned counsel. It is no doubt true as pointed out by the learned counsel that till the amendment of the Schedule given to the Act, by means of Notification No. FD 76 CET 84(II) dated November 13, 1984, "industrial machinery and parts and accessories thereof" and "electrical goods, that is to say, electrically operated motors, etc.," were treated as separate items of levy and separate percentage of tax was made leviable and with effect from April 1, 1983, levy of tax on electrically operated goods is removed. By that only, the petitioner cannot avoid its liability to pay tax on electrically operated motors. If the type and the nature of electrically operated moto....