TaxTMI 
TaxTMI 
2023 (1) TMI 246
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....sed the following questions of law: "i) Whether on the facts and in the circumstances of the case, the Tribunal was legally justified to tax tyre, tube and flaps when sold along with tractor-trolley as a single unit to be taxed separately @ 12.5% and 13.5% and tractor-trolley without tyre, tube and flaps will be sold @ 4%? ii) Whether on the facts and in the circumstances of the case, the dispute being the rate of tax the confirmation of penalty by the Tribunal is correct in law? iii) Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in confirming the imposition of maximum penalty by the assessing officer without taking into consideration the decisions relied on by the petitioner rendered in the case of Union of India Vrs. Rajasthan Spinning & Weaving Mills reported in (2010) 1 GSTR 66 (SC) = 2009 (238) ELT 3 (SC), which has been relied on by the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Chandigarh Vrs. Pepsi Foods Ltd. reported in 2010 (260) ELT 481 (SC)?" 1.1. Since questions of law raised in both these revision petitions are similar, they are heard analogously and disposed of by th....
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....ereof are to be taxed @ 4%. As the said Entry specifically excluded tyres, tubes and flaps those are to be taxed @ 12.5% as unspecified goods. The statute in Sl. No.119 above has neither imposed nor pressed upon any conditions that the rate in the Sl. No. be applicable to traders and not to manufacturers when he sells his finished products. In the event of clarity in law in our considered opinion tractor-trailers are to be taxed @ 4% but not tyres, tubes and flaps etc. These goods (tyres, tubes, flaps) are to be taxed @ 12.5% in the tax rate schedule C of the OVAT Act." 2.3. Against this Order of the learned Tribunal the petitioner-dealer has approached this Court in revision invoking provisions under Section 80 for adjudication of questions of law as posed supra. Facts of R.K. Engineering: 3. Audit Assessment was framed under Section 42 of the OVAT Act by the learned Sales Tax Officer, Kalahandi Circle, Bhawanipatna pertaining to the tax periods from 15.01.2009 to 30.06.2011 raising a demand to the tune of Rs.5,28,215/- [Tax =Rs.1,76,072/- + Penalty = Rs.3,52,143/-] vide Order dated 11.02.2013 by holding that the tyres and tubes of tractor-trolley manufactured by the peti....
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....VAT Act. 6.1. It is not in dispute that Entry 119 of Part-II specifically carves out exception. The goods "tyres, tubes and flaps" are excluded from the words "Tractors, threshers, harvesters and attachments and parts thereof" used in the said entry. It is stated in Deepak Agro Solution Ltd. Vrs. Commissioner of Customs, (2008) 8 SCC 358 that what is not excluded would be held to be included. In CCE Vrs. Shree Baidyanath Ayurved Bhawan Ltd., (2010) 1 GSTR 1 (SC) it is laid down that specific entry must prevail over a general entry. This Court in State of Odisha Vrs. Bharat Store, (2002) 127 STC 333 (Ori) held that it is a settled position of law that a taxing statute is to be strictly construed and the words used are to be given their natural meaning. It is also the settled position that entries in the Schedule are to be interpreted in their popular sense unless they are expressly defined in the enactment. 6.2. In Raj Brothers Agencies Vrs. State of TN, (1977) 39 STC 191 (Mad) it has been stated that a special entry overrides a general provision. If main article to which the item in question is accessory or component part is taken out of that item, its accessories and compone....
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.... January 1, 1978, till the entry as in Sl.6 came into effect from June 1, 1980 prescribing rate of 4 per cent. Considering the above taxing history, it is apparent that component parts of tractor and its trailer were considered separate from tyres and tubes of tractor and its trailer, while carving out from sl. 2 automobile tyres and tubes as in Sl.5 with effect from September 1, 1978 and from Sl.4 component parts of tractor and its trailer as in Sl. 6 with effect from June 1, 1980. Consequently, the argument of the learned counsel for the dealer that tractor tyres and tubes are taxable as component parts of tractor is without any substance." (Emphasis supplied). 6.6. This Court while dealing with whether "flap" is "component part of motor vehicle" in the case of State of Odisha Vrs. Dunlop India Ltd., (1993) 90 STC 379 (Ori) observed as follows: "3. *** As the user of the flap being limited for the purpose indicated above, it cannot be said to be a component part of tyres and tubes. It is also not an accessory to tyres and tubes in view of the test laid down by the Apex Court in the case of M/s. Mehera Brothers v. The Joint Commercial Officer, Madras, AIR 1981 SC 10....
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....as follows: "7. *** In Bhor Industries Ltd., Bombay Vrs. CCE, (1989) 1 SCC 602, the crude PVC films as produced by the appellants were not known in the market nor could they be sold in the market. Sabyasachi Mukharji, J., as he then was, while considering the submission that it was only the goods as specified in the schedule to the Act that could be subjected to the duty in para 6 observed: (SCC p. 607, para 6) 'For articles to be goods these must be known in the market as such or these must be capable of being sold in the market as goods. Actual sale in the market is not necessary, user in the captive consumption is not determinative but the articles must be capable of being sold in the market or known in the market as goods. That was necessary.' The appellants themselves have called the goods 'Tie Bar Nuts' and those are admittedly used for fixing platens at appropriate distances. It cannot be said that the Tie Bar Nuts after their manufacture did not constitute goods; their actual sale in the market was not necessary. *** 16. In the instant case there is no dispute that Tie Bar Nuts conform to the popular idea of nuts. In Indo Interna....
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....cted law authorizing imposition of penalty for infraction of any statutory provision. We are conscious that generally penalty proceedings are quasi judicial in nature. Therefore, before imposing penalty, opportunity of hearing should be provided to the affected assessee- dealer. In the OVAT Act, various Sections provide for imposition of penalty for infraction of statutory provisions. In most of those Sections opportunity of being heard is provided to a dealer before imposition of penalty. Those Sections are Section 28(1), Section 31(9), Section 34(3), Section 54(6), Section 61(5), Section 62(6), 65(2), Section 73(10), Section 73(12)(e), Section 73(13), Section 76(3), Section 76(8), Section 101(4) and Section 107(4). The present position is entirely different. Quantification of penalty is dependant on the tax assessed under Section 42 of the OVAT Act. For the purpose of assessing tax, opportunity of hearing was afforded to the assessee, the explanation of the assessee and its books of account were examined and considered. Penalty is only quantified on the basis of the tax assessed. No discretion is left with the Assessing Officer for levying any lesser amount of penalty. T....
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....urchases or sales or both, erroneous claims of deductions including input tax credit evasion of tax or contravention of any provision of this Act affecting the tax liability of the dealer, the assessing authority may, notwithstanding the fact that the dealer may have been assessed under Section 39 or Section 40, serve on such dealer a notice in the form and manner prescribed along with a copy of the Audit Visit Report, requiring him to appear in person or through his authorized representative on a date and place specified therein and produce or cause to be produced such books of account and documents relying on which he intends to rebut the findings and estimated loss of revenue in respect of any tax period or periods as determined on such audit and incorporated in the Audit Visit Report. (2) Where a notice is issued to a dealer under sub-section (1), he shall be allowed time for a period of not less than thirty days for production of relevant books of account and documents. (3) If the dealer fails to appear or cause appearance, or fails to produce or cause production of the books of account and documents as required under sub-section (1), the assessing authority ....
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....rent context and under different statutory setting of words, the reliance placed by the petitioner is misplaced. 7.2. It may be worthwhile to keep in mind the following dicta of the Hon'ble Supreme Court vide Union of India Vrs. Arulmozhi Iniarasu, (2011) 7 SCC 397: "14. Before examining the first limb of the question, formulated above, it would be instructive to note, as a preface, the well-settled principle of law in the matter of applying precedents that the Court should not place reliance on decisions without discussing as to how the fact situation of the case before it fits in with the fact situation of the decision on which reliance is placed. The observations of the courts are neither to be read as Euclid's theorems nor as provisions of statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Disposal of cases by blindly placing reliance on a decision is not proper because one additional or different fact may make a world of difference between conclusions in two cases. [Ref. Bharat Petroleum Corpn. Ltd. Vrs. N.R. Vairamani, (2004) 8 SCC 579; Sarva Shramik Sanghatana (KV) Vrs. Sta....