TMI Blog2014 (4) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods so as to claim concessional rate of tax – Held that:- In the manufacturing process transformer serves the purpose of modifying or controlling the voltage supplied by the utility to the manufacturing unit according to its specific requirements - The transformer installed in the unit would ensure that the electricity is supplied to the unit so as to ensure its optimal performance - The transformers that are purchased by the respondent/assessee would act to the effective functioning of the machinery installed in the unit used for the purpose of manufacture of urea and fertilizers and hence are accessories to the manufacture of urea and fertilizers - Therefore, assessee would certainly fall within the meaning of the expression "goods required for use in the manufacture" appended as explanation to Section 4-B(2) – Therefore, impugned judgment and order does not suffer from any error whatsoever and therefore, no need to interfere with the findings and conclusion reached by the High Court - The appeals are dismissed – Decided in Favour of Assessee. - Civil Appeal Nos. 1106 of 2004, Civil Appeal No. 1107 of 2004 - - - Dated:- 16-1-2014 - H. L. Dattu And S. A. Bobde,JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the assessee was rejected by the assessing authority and consequently tax and the penalty was leveled against the assessee. 6. Being aggrieved by the said order passed by the assessing authority, the assessee had carried the matter in an appeal before the First Appellate Authority. The First Appellate Authority while rejecting the appeal filed by the assessee had confirmed the orders of assessments passed by the assessing authority. 7. Aggrieved by the same, the assessee approached the Sale Tax Tribunal against the orders of the First Appellate Authority. The Tribunal has come to the conclusion that the transformer purchased by the assessee is essential for effective functioning of the machinery used for the purpose of manufacture of urea fertilizer and therefore, is covered under the category accessories and component parts as envisaged under the Recognition Certificate and accordingly, set aside the orders of assessment for the assessment years 1979-80 and 1980-81 insofar as the levy of sales tax on the purchase of the transformer is concerned by order dated 16.08.1989. 8. Being aggrieved by the orders so passed, the Revenue had carried the matter by way of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed, the assessing authority shall grant to him in respect of such goods a recognition certificate in such form and subject to such conditions, as may be prescribed. Explanation: For the purposes of this sub-Section - (a) goods required for use in the manufacture shall mean raw materials, processing materials, machinery, plant, equipment, consumable stores, spare parts, accessories, components, sub- assemblies, fuels or lubricants: and (b) notified goods means such goods as may, from time to time be notified by the State Government in that behalf. 13. It is neither in dispute nor has been disputed by the parties, that, the assessee is a dealer eligible to claim concessional rate of tax under Section 4-B(1). Under Section 4-B(2), the assessee had applied for grant of recognition certificate in Form No. 18 as required under Rule 25(2) of the Rules. The assessing authority had issued the recognition certificate in Form No. 19 for purchase of raw-material, accessories and component parts at concessional rate of tax valid from 04.11.1977. 14. The assessee claims concessional rate of tax on purchase of transformer under the head accessories and component pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating or controlling or may serve as aid and therefore, 'arc carbon' was held to be an accessory to cinematographic equipment. 17. The meaning ascribed to the term accessory in aforesaid decision was followed in the case of Mehra Brothers vs. Joint Commercial Officer, Madras., (1991) 1 SCC 514, wherein this Court had considered as to whether the Seat Covers are accessories of the seat. This Court elaborately explained the test for determination of the accessory as under: 5. In the Supreme Motors vs. State of Karnataka case the Karnataka High court has taken different view. It is held that the car seat covers, at best could make the seat more comfortable, but do not serve as aids to the vehicle as a whole, and therefore, they must fall outside the ambit of vehicle as a whole, and therefore, they must fall outside the ambit of entry 73 of the Second Schedule to the Karnataka Sales Tax Act, 1957 and was not exigible to sales tax at 13 per cent. Undoubtedly this ratio would help the appellant. The learned Judges laid emphasis thus: Every part is useful to the car for its effective operation. Likewise should be the aid of the accessory in order to fall within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the manufacturing unit and whether it is an accessory to the manufacture of the goods so as to claim concessional rate of tax under the U.P. Act. Undoubtedly, in the manufacturing process transformer serves the purpose of modifying or controlling the voltage supplied by the utility to the manufacturing unit according to its specific requirements. The transformer installed in the unit would ensure that the electricity is supplied to the unit so as to ensure its optimal performance. It is adjunct to the efficient use of the manufacturing unit. Such being the case, it can be comprehended that the transformers that are purchased by the respondent/assessee would act to the effective functioning of the machinery installed in the unit used for the purpose of manufacture of urea and fertilizers and hence are accessories to the manufacture of urea and fertilizers. Therefore, the respondent-dealer would certainly fall within the meaning of the expression goods required for use in the manufacture appended as explanation to sub-Section (2) of Section 4-B of the U.P. Act. We have arrived at this conclusion in view of the explanation appended to Sub Section (2) of Section 4-B of the U.P. Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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