2014 (1) TMI 672

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....g Machines, Hot Mix and Drum Mix Plants, Road Sweepers, Paver Finishers and Road Rollers etc. The Company is a registered dealer under the provisions of the Bihar Value Added Tax Act, 2005 (hereinafter referred to as "the Act of 2005"), under the Central Sales Tax Act, 1956 and also under the Bihar Tax On Entry Of Goods Into Local Areas For Consumption, Use Or Sale Therein Act, 1993 (hereinafter referred to as "the Act of 1993"). The Company made an application to the Commissioner of Commercial Taxes under Section 77 of the Act of 2005 for classification of the road construction equipments manufactured by it. According to the Company, the road construction equipments manufactured by it are the "plant and machineries" within the meaning of the Act of 2005, whereas according to the Commissioner the said road construction equipments are "motor vehicles" within the meaning of the Motor Vehicles Act, 1988. In absence of specific entry of "motor vehicles" the said equipments are classified as residual items attracting tax @ 12.5%. Learned advocate Mr. D.V. Pathy has appeared for the Company. He has submitted a compilation containing photocopies and a brief note in respect of the machine....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tested by the State Government. Learned Additional Advocate General Mr. Lalit Kishore has appeared for the State Government. Mr. Lalit Kishore has taken us through the various entries under the Act of 2005. He has submitted that unlike other enactments, such as the Central Excise Act, a specific entry of motor vehicle is missing from the said schedule. The Legislative intent not to include the road construction equipment in the category of plant and machinery and to classify such equipments as motor vehicle, is apparent. In absence of a specific entry of motor vehicle the Commissioner has rightly treated classified these road construction equipments manufactured by the Company as residual item and has rightly charged the tax @ 12.5%. In support of his submissions Mr. Lalit Kishore has relied upon the judgment of the Hon"ble Supreme Court in the matter of Government of A.P. and another v. Road Rollers Owners Welfare Association and others, {(2004) 6 SCC 210}. As the matter relates to the value added tax payable on sale of the aforesaid equipments in the State of Bihar, we shall first consider the various provisions of the Act of 2005. It is not in dispute that the petitioner is lia....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e report of the recommendation made by the VAT Committee. Per contra, Mr. Lalit Kishore has submitted that a motor vehicle does not necessarily have to transport the goods or the passengers. Even a chassis is defined as motor vehicle under the Motor Vehicles Act, 1988. Many of the aforesaid equipments are actually mounted on a chassis. They are, therefore, necessarily the motor vehicles and are chargeable as such. The report relied upon by Mr. D.V. Pathy is the report of the experts in respect of substitution of the Sales Tax prevalent in each State in the country by the Value Added Tax. The experts opined that the matter was governed by entry 54 of the State List of Schedule VII to the Constitution and falls within the sovereign power of the State Governments. However, with a view to avoiding sales tax war then prevalent in the States, a common provision in the form of Value Added Tax was considered desirable. In the West Bengal Valued Added Tax Act, 2003, the Road rollers and road construction equipments are specifically classified as such under a generic item "plant and machinery". At entry no.54B of Schedule-C under the generic item "plant and machinery", machineries used in s....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Motor Vehicle", it was taxable under the Motor Vehicle Tax Act as "Light Motor Vehicle". In absence of a similar statutory provision under the Act of 2005, we cannot take aid of the aforesaid judgment to hold that the Road rollers are the motor vehicles. Let us first consider what a motor vehicle is in a common parlance. We believe that in common parlance, a motor vehicle is one which transports goods or the passengers. For example, a chassis without a body attached to it is a motor vehicle within the meaning of the Motor Vehicles Act. However, in common parlance no person would ever consider a chassis to be a motor vehicle. So far as the present matter is concerned, none of the aforesaid equipments is meant for or designed to transport goods or passengers. In our opinion, therefore, for the purpose of the Act of 2005, the aforesaid equipments are not the "motor vehicle" as held by the Commissioner of Commercial Taxes under the impugned order dated 24th March 2011. The next question that arises is whether the said equipments can be said to be the "plant and machineries" within the meaning of entry 91 of Schedule-III of the Act of 2005. Ordinarily, when a person refers to a plant....