TaxTMI 
TaxTMI 
TaxTMI 
2014 (7) TMI 1225
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....ractors and Harvester combines M or I 5.00% (ii) Parts and accessories and attachments of tractors and Harvesters of all kinds other than tyre, tube, spark plug and Tractor Trollies. M - stands for sale by the manufacturer in Uttar Pradesh. I - stand for sale by the importer in Uttar Pradesh. A perusal of the aforesaid notification indicates that parts and accessories and attachment of tractors of all kinds other than tyre, tube, spark plug and tractor trollies is taxable @ 5%. The assessing officer, on the basis of this notification dated 15.1.2000, treated sale of tractor batteries as part/accessory of a tractor and imposed 5% as tax. Under Section 3-A of the Tax Act, the State Government issued another notification dated 29.1.2001. Entry No.18 is relevant for deciding this issue, which is extracated hereunder: Sl.No. Description of goods Points of tax Rate of tax percentage 18 (i)(a) Motor vehicles including chassis of motor vehicles, but excluding light commercial vehicles mentioned in sub-clause (b) below, two wheelers motor vehicles and tractors and harvester combines. Sale by dealer to consumer or, in this case of sale through a hire pu....
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....ification and it only states that parts and accessories and attachments of tractors of all kinds other than tyre, tube, spark plug and tractor trollies. The notification dated 15.1.2000 is wider since it includes all kinds of parts and accessories and attachment of tractors except specified parts and accessories and attachments which have been specifically excluded whereas in the notification dated 29.1.2001, as amended on 9.5.2003, "battery" has been included as a component, part or accessory for motor vehicles only. Based on Entry No.18 of the notification dated 9.5.2003, a circular dated 22.5.2007 was issued by the Commissioner of Trade Tax indicating that in view of the inclusion of "battery" in the notification dated 9.5.2003 and non-inclusion of battery in the notification dated 15.1.2000, the tractor battery should be subjected to tax as an unclassified item @ 10%. Section 22 of the Act provides that if the assessing authority has reasons to believe that the whole or any part of the turnover of a dealer for any assessment year or part thereof has escaped assessment to tax and has been under assessed to tax at a rate lower than that at which it was assessable under the Act,....
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....hat battery is a part of a tractor, if not an accessory. Further, the words "of all kinds" will include everything which the tractor requires even if the said part may not be an integral part of a tractor. The learned senior counsel submitted that the words "other than" used in Entry 46 gives a specific exclusion to certain parts and accessories and attachments which will not be taxed @ 5% and such exclusion does not include the word "battery". Consequently, the word "battery" would be included as a part, if not, as an accessory to a tractor, which would be taxable @ 5%. The learned senior counsel further contended that the notification dated 29.1.2001 as amended by 9.5.2003 is not applicable as it is only relates to motor vehicles other than tractors. The inclusion of the word "battery" as component parts or accessory of a motor vehicle is only illustrative and is not exhaustive, whereas the exclusion of specified articles under the notification dated 15.1.2000 is specific and exhaustive. If the legislature had the intention of excluding "battery" in the notification dated 15.1.2000, it would have specifically excluded in that notification. By not doing so, battery would be inclu....
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....tition No.1367 of 2005 and other companion cases, decided on 29.5.2014. The Division Bench after considering the case in Assistant Commissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers P. Ltd., (2007) 291 ITC 500 (SC), held that at the stage of issuance of notice the only question to be considered was whether there was relevant material on which a reasonable person could have formed the requisite belief. In M/s Rubber Chem Sadabad Gate Hathras vs. The Additional Commissioner Grade-I, Commercial Tax, Aligarh Zone, Aligarh and another, decided on 15.3.2014, in Writ Petition No.1045 of 2009, the Division Bench of this Court, after analysing various decisions of the Supreme Court, held- "On a plain and simple reading of Section 21, it is crystal clear that where a dealer has been assessed to tax at lower, then, it is a case of escape assessment. Rider is that such Assessing Authority should have reason to believe that whole or part of turnover has escaped assessment. The condition precedent, namely, the formation of opinion on the part of Assessing Authority that there is reason to believe that the case in which the action is contemplated falls within the ambit of at least one ....
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....t. Such reasons or grounds must have a nexus with the formation of the belief. The approach has to be practical and not pedantic. In the light of the aforesaid, in the instant case, we find that the assessing officer as well as the Additional Commissioner, while granting permission, was of a belief that tractor battery is liable to be taxed as an unclassified item @ 10%. Such belief was based on comparison of the notification dated 9.5.2003 wherein batteries were included as a component, parts and accessories of a vehicle, which excluded tractor and consequently had a reasonable belief and formed an opinion that non-exclusion of battery in the notification dated 15.1.2000, which related to parts and accessories and attachments of tractor would mean that tractor battery cannot be included in the notification dated 15.1.2000 and, therefore, has to be treated as an unclassified item. Further, the belief was formed also on the basis of the circular dated 22.5.2007 issued by the Commissioner, which is binding upon the subordinate authorities. The Court is of the opinion, that such belief forming an opinion that whole or any part of the turnover of a dealer had escaped assessment of tax....
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....f motor vehicle and there being specific entry of it battery sold for motor vehicles cannot be held taxable under Notification 7996 of 1965. In Thanjavur Leather and Autoliners Industrial Co-operative Society Limited vs. The State of Tamil Nadu, 1983(52)STC 343, a Division Bench of the Madras High Court, while analysing the meaning of the words "spare parts", held that when a person purchase a battery to replace an existing battery, the said battery is a spare part. In Vikas Traders vs. The State of Gujrat, 1976(37) STC 163, a Division Bench of the Gujrat High Court held, that battery is a component part of the motor vehicle. The Division Bench held, that a battery is an integral part to constitute the whole motor vehicle as without a battery it would be ceased to be a motor vehicle. From the aforesaid decisions, it is clear, that various Courts have held that battery is a part of a vehicle. In Mehra Brothers Vs. Joint Commercial Officer, Madras, 1991(1)SCC 514, the Supreme Court analayse the word "accessory" under the Sales Tax Act holding that the term "accessories" is used in the Schedule to describe goods which may have been manufactured for use as an aid or addition. The S....