TaxTMI 
TaxTMI 
2015 (4) TMI 284
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....d liable to tax at 5% only and it cannot be taxed under unscheduled goods at 13.5%. 2. The assessee is a dealer registered under the provisions of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as 'the KVAT Act', for short) and Central Sales Tax Act, 1956 (hereinafter referred to as 'the CST Act', for short). The assessee is in the business of manufacture of general honeycomb partition frames to Rail Coach Factory, Indian Railways, Kapurthala, Punjab State. The assessee filed monthly returns and paid tax at the rate of 5% for the assessment year 2010-11 in respect of sale of honeycomb partition frames to Indian Railways. The Assistant Commissioner of Commercial Taxes, after verification of the returns, proposed to pass ....
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....ee did not sell merely honeycomb boards but manufactured honeycomb partition frames and sold the honeycomb partition frames exclusively to the railways. The honeycomb partition frames were manufactured to the specifications and drawings provided by the railways and were meant for use as parts in the construction of railway coaches and not for any other use. The assessee did not place the honeycomb partition frames in the open market catering to the customers for different uses so that it could be said that commercial parlance or common parlance understanding was applicable for construction of the correct nature of the goods. Even if the commercial parlance understanding is to be applied, the honeycomb partition frames manufactured by the as....
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....h Factory, Indian Railways, Kapurthala, Punjab State. Rail Coach Factory at Kapurthala places orders with the assessee for supply of honeycomb partition frames set for AC 3 tier coach. They also prescribed their requirements and the characteristics they look for. They also gave the drawings and the specifications. It is thereafter, the assessee manufactures the honeycomb partition frames set for AC 3 tier coach according to the specifications prescribed by the railways. These honeycomb partition frame sets are not available in the market because it is of no use for others. These honeycomb partition frames are used for partition in a rail coach. Once these frames are used for partition in a rail coach, it becomes part thereof. Infact, it ....
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....e case of a glass mirror, the consumer recalls primarily the reflective function of the article more than anything else. It is a mirror, an article which reflects images. It is referred to as a glass mirror only because the word 'glass' is descriptive of the mirror in that glass has been used as a medium for manufacturing the mirror. The basic or fundamental character of the article lies in its being a mirror." 8. Again, the Apex Court in the case of MUKESH KUMAR AGGARWAL & CO. v. STATE OF MADHYA PRADESH reported in (1988) 68 STC 324 held as under: "Here again, pushed to its logical conclusions, the reasoning incurs the criticism of proceeding to determine the nature of the 'goods' by the test of the use to which they are capable....