TaxTMI 
TaxTMI 
2014 (5) TMI 256
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.... First Schedule from 08.10.1988 as parts of motor vehicles when, in 119 of the First Schedule as bolts and nuts, the end-use of the product being irrelevant ?" T.C.(R).Nos.64 and 65 of 2011 are admitted on the following substantial question of law:- T.C.(R).64 of 2011:- " Whether the Sales Tax Appellate Tribunal committed an error of law in holding that the bolts and nuts sold by the petitioners were classifiable only under Sl.No.35(iii) of Part D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 upto 22.01.2000 and thereafter, under Entry 13(ii) of Part DD of the First Schedule to the TNGST Act, 1959 as parts and accessories of motor vehicles instead of holding that the bolts and nuts fall under Entry 6 of Part D of the First Schedule which was a specific entry for bolts and nuts? T.C.(R).No.65 of 2011:- " Whether the Sales Tax Appellate Tribunal committed an eror of law in holding that the bolts and nuts sold by the petitioners were classifiable only under Sl.No.35(ii) of Part D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 read with Section 9(2) of the Central Sales Tax Act, 1956 upto 22.01.2000 and thereafter, under Entry 1....
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....88, was as follows: i) Motor Cars, motor taxi-cabs, motor omni-buses, motor vans, jeeps and motor lorries, chassis or motor vehicles, bodies built on chassis or motor vehicles belonging to others (on the turnover relating to bodies), auto-rickshaws and all the varieties of trailers, by whatever name know; ii) motor-cycles, motor scooters, moterettes, mopeds, and iii) bicycles, tricycles, cycle-rickshaws, tandem cycles, cycle combinations and perambulators fitted with motor engines and motor engines used for being fitted thereto ; iv) tyres including phenumatic tyres, tubes and flaps ordinarily used for motor vehicles and trailers mentioned in sub-items (i) to (iii) above (whether or not such tyres, tubes and flaps are also used for other vehicles). " (taxable at 8%) 5. Entry 3 of I Schedule from 07.10.1988 reads as follows: "(i) Motor cars, motor taxi-cables, motor omni-buses, motor vans, jeeps and motor lorries, chassis of motor vehicles, bodies built on chassis of motor vehicles belonging to others (on the turnover relating to bodies). Auto-rickshaws and all the varieties of trailers, but whatever name known; ii) motor-cycles, motor scooters, motorettes....
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....ssable only as parts and accessories of motor vehicles. Since there was no difference of tax between Entry 119 as well as Entry 3 of I Schedule and Entry 2 of V Schedule, there was no question of imposing any penalty. 8. Referring to the licence issued by the Government of India, the Sales Tax Appellate Tribunal pointed out that the assessee was manufacturing 'High Tensile bolts and nuts' Set screws and socket head screws and also Rivets. Referring to the letters from the purchasers, who are automobile manufacturers, the Sales Tax Appellate Tribunal pointed out that the automobile manufacturers admitted that bolts and nuts were fitted in their automobile chassis/I.C.engines manufactured in their factories at Ennore and Hosur; it is also admitted that in the purchase orders they had given the items with specific part numbers for identification, inventory, stock handling and for receipts and issues for manufacture. Thus, the Tribunal held that in the face of this evidence, bolts and nuts manufactured and sold by the assessee could not be brought under Entry 119. 9. Referring to the decisions relied on by the assessee viz., PLASMAC MACHINE MGF CO. PVT. LTD VS. COLLECTOR OF CENTR....
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....from the time, when Entry 3 was introduced in the First Schedule referable to motor vehicles, its parts and accessories. He also referred to Entry 2 of Schedule V relating to the period 01.04.1988 to 06.10.1988. Learned counsel also referred to the subsequent development, in 1965, by way of The Madras General Sales Tax (Amendment) Act, 1965, Act No.7 of 1965, bringing articles (excluding batteries) adapted for use generally as parts and accessories of motor vehicles and trailers under Item 3 of I Schedule and the subsequent amendment in 1974 by way of The Tamil Nadu General Sales Tax (Amendment) Act, 1974, Act No.23 of 1974 bringing under Entry 119 relating to Bolts and nuts, threaded or tapped and screws of base metal or alloys thereof, including bolt ends, screw studs, screw studding, self-tapped screws, screw hooks and screw rings. He referred to the objects and reasons of introduction of Entry 119 and submitted that even though there might be a separate entry for automobile parts and accessories, meaningful interpretation should be given particularly when a separate entry is there for bolts and nuts. He also pointed out that from 01.04.1988 to 06.10.1988, parts and accessories ....
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....al itself found that the manufacturers of these goods, namely, Sundaram Fasteners Ltd manufactured different types of fasteners which find application in various industries. What we seek to emphasise is that the nuts and bolts in question are not manufactured specially for use as automobile spare parts, but are of general nature liable to be used in any industry." 15. Rejecting the view of the Tribunal, holding that nuts and bolts were not iron and steel articles and based on assessee's nature of business, the Kerala High Court held that the materials produced viz., the nuts and bolts were just like any other nuts and bolts and there was nothing to show that they were exclusively meant for the autombile industry. Thus referring to the decision of the Supreme Court in the case of Ramavatar Budhaiprasad Vs. Assistant Sales Tax Officer (1961) 12 STC 286, in the case of State of West Bengal Vs. Washi Ahmend (1977) 39 STC 378, in the case of Porritts and Spencer (Asia) Ltd Vs. State of Haryana (1978) 42 STC 433 (SC), in the case of Deputy Commissioner Vs. Western India Plywoods (P.)Ltd (1980) 46 STC 331, in the case of Mukesh Kumar Aggarwal & Co., Vs. State of Madhya Pradesh (1988) 6....
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....f bolts and nuts being fastening, the same would attract Entry 119, which is the specific entry on bolts and nuts in contrast to General Entry 3. Rejecting such view, the Sales Tax Appellate Tribunal found that once the article was designed, made to order with specifications for being used only in automobile, then the specific entry 3 which deals with automobile parts would be relevant entry for the purpose of attracting levy. Rejecting the reliance placed on the Commissioner's classification, the Sales Tax Appellate Tribunal held that the items in question would fall only under Entry 3, however, since parts and accessories was not included from 01.04.1988 to 06.10.1988 and was brought under Fifth Schedule and thereafterwards restored to the First Schedule upto 06.10.1988, the rate of tax will be 8%. Thus, with the finding of the fact that they are automobile parts, we do not find any justifiable ground to accept the plea of the assessee that the item in question would fit in to fall under only Entry 119 and not under Entry 3. 18. It may be pointed out that learned counsel for the assessee placed before us the list of purchasers only to point out that there was textile industrie....
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....kind of difficulty for the assessee in accepting the assessment. The difficulty started only when disparity in rate of tax was brought in. With the result, the assessee contended that in the wake of specific Entry 119 relating to bolts and nuts, even though a specific entry for motor vehicles including parts and accessories of motor vehicles and trailers excluding batteries was there, it is only Entry 119, which is specific entry to bolts and nuts, relevant to the case. 22. The concept of specific entry under Entry 119 in the face of Entry 3 fails in its application in this case, since a reading of the Entry 119 would show that it applies to all nuts and bolts of general nature. When Entry 3 makes a specific reference to articles (excluding batteries), used as spares of motor vehicles, one has to give the necessary emphasis to this phrase "the parts and accessories", which are adapted for the use in automobiles. Even though bolts and nuts generally might have fallen in under Entry 119 of I Schedule, once customised for use in motor vehicles as parts and accessories, the same would only fall under Entry 3 of the First Schedule. 23. The Sub Entry is a user oriented entry for th....