TMI Blog2023 (7) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... iscarded the explanation rendered by the petitioner and shifted the onus on the dealer. For ascertaining the true nature of ATS, the petitioner has brought on record the expert opinion and this Court on visiting web portal of manufacturers of such commodities found that in trade parlance ATS is treated as accessories to Centrifugal, Monoblock and Submersible pumps and pump sets . The explanation of the petitioner being in consonance with the well-settled tests and guidelines propounded by the Courts, the suggestion of Sri Sunil Mishra, learned Standing Counsel for the Commercial Tax Goods and Service Tax Organisation for sending the matter back to the Assessing Authority for fresh adjudication by giving scope for enquiry/investigation is rejected. What is emanating from the Order-in-Second Appeal of the learned Sales Tax Tribunal is that no enquiry as to identity of commodity vis- -vis entry in Serial No. 29 of Part-II of Schedule-B was conducted by neither the Sales Tax Officer (Audit) nor the Assessing Authority. Legal position is well-established in HINDUSTAN FERODO LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [ 1996 (12) TMI 49 - SUPREME COURT ] ratio of which is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment - the question of law as framed by this Court which fell for consideration is answered in the negative, i.e., in favour of the petitioner-assessee and against the Revenue. - STREV No. 74 OF 2017 - - - Dated:- 11-7-2023 - HONOURABLE DR. JUSTICE B.R. SARANGI AND HONOURABLE MR. JUSTICE MURAHARI SRI RAMAN Counsel appeared for the parties: For the Petitioner : M/s. Chitta Ranjan Das and Padmalaya Mohapatra, Advocates For the Opposite Party : Mr. Sunil Mishra, Standing Counsel (CT GST Organisation) MURAHARI SRI RAMAN, J. M/s. Corporate Engineers and Associates, a partnership firm, has approached this Court invoking provisions of Section 80 of the Odisha Value Added Tax Act, 2004, assailing the Order dated 20.06.2017 passed by the Odisha Sales Tax Tribunal in Second Appeal bearing No. 188 (VAT) of 2015-16 partly allowing the appeal filed by the State of Odisha-opposite party against the Order dated 17.04.2015 passed by the Deputy Commissioner of Sales Tax (Appeal), Bhubaneswar Range, Bhubaneswar in the first appeal bearing No. AA 106221422000213 arising out of Assessment framed vide Order dated 10.09.2014 under Section 42 of said Act, 2004 read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o VAT @5% under the OVAT Act. Interpreting the items in question as unspecified ones, the STO (Audit) recommended for realization of differential taxes. The same contention was raised in assessment also and the learned Advocate also submitted that these goods were purchased from registered dealers on payment of VAT @4%. The contention of the learned Advocate having been found to be unsatisfactory, the learned Assessing Authority rejected the averment and, thereby, accepted the allegation levelled in the AVR. Thus the dispute relates to taxability of the Control Panel, Motor Start Panel Board and other Control Panel . The learned Advocate, in the grounds of Appeal, has submitted that in the instant case, the dealer basically deals in Pump sets, Accessories and Spare parts thereof under agriculture and PHD Sector. The appellant-dealer is also used to purchase the accessories and spare parts of pumps from registered dealer of inside the State by paying the tax as the rate applicable for pump sets as @4% or @5%. The copy purchase bills issued by M/s. S.L. Associates, TIN-21885600440, Bhubaneswar was furnished in this forum for confirmation and consideration. Entry No. 29 of Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sale of ATS as per entry specified in Part-III, Schedule-B. 3. Dissatisfied, the petitioner-dealer, with a prayer to quash the Order-in-Second Appeal dated 20.06.2017 (Annexure-4) moved this Court by way of instant revision under Section 80 of the OVAT Act, and posited the following questions of law: I. Whether, on the facts and circumstances of the case, the Single Bench, Judicial Member-II, Odisha Sales Tax Tribunal was right in law in holding that 150HP fully automotive ATS control panel, motor starter control panel and other panel are unspecified goods liable to tax at 13.5% and not falling under Entry Sl. No. 29 of Part II of Schedule B of the OVAT Act. II. Whether, on the facts and circumstances of the case the Single Bench, Judicial Member-II, Odisha Sales Tax Tribunal is right in law, in remanding the matter to the Sales Tax Officer for fresh assessment by directing to demand tax @13.5% on the goods 150HP fully automotive ATS control panel, motor starter control panel and other panel, which also gives scope for imposition of penalty under Section 42(5) of the OVAT Act, when the issue involved is classification and interpretation of goods, whether the above go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l urged that it is erroneous approach of the learned Odisha Sales Tax Tribunal that the Appellate Authority instead of investigating the matter for himself, observing that the Assessing Authority did not conduct any enquiry with regard to issue as to whether ATS would fall within the meaning of the term accessories could not have nullified the demand. He, thus, went on to submit that fishing and roving enquiry is anathema to the assessment. When the petitioner-dealer had made rightful claim with respect to classification, without any material on record and justifiable reason the Assessing Authority ought not to have turned down the explanation of the dealer. 5.2. The learned counsel for the petitioner further submitted that ATS falls within ambit of Entry in Serial No. 29 of Part-II of Schedule-B subject to levy of tax @4% [up to 31.03.2012] and @5% [with effect from 01.04.2012], and therefore, other registered dealers including manufacturers and sellers charge said commodities accordingly. The instant petitioner-dealer could not have been saddled with huge burden of tax @13.5% by treating the same to have fallen within scope of residuary entry as per Part-III, Schedule-B. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing part of an Affidavit dated 26.06.2023 sworn to by Sri Arbinda Patra, Managing Partner of M/s. Corporate Engineers and Associates, Authorised dealer of said Company. The learned counsel submitted that said Company having expertise in Switchgear and Low Voltage Panel manufacturing, certified that the commodities in question are made exclusively for Centrifugal, Monoblock and Submersible pump and pump sets for handling water. The veracity of such certificate having not been questioned by Sri Sunil Mishra, learned Standing Counsel for the Commercial Tax Goods and Services Tax Organisation, the dispute set up by the Assessing Authority is to be resolved in favour of the Assessee-dealer. 7.1. Though this Court granted opportunity to Sri Sunil Mishra, learned Standing Counsel, for filing of objection, he did not wish to furnish objection to the aforesaid Affidavit dated 26.06.2023, but insisted for proceeding with the hearing of the matter basing on the material available on the record. Sri Sunil Mishra, learned Standing Counsel appearing for the opposite party fervently prayed for remitting the matter to the Assessing Authority for fresh adjudication on the issue raised in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroduction Expertise As we are ISO 9001:2015 ISO 14001:2015 Company well recognized, expertise on Switchgear Low Voltage Panel manufacturer of low voltage electrical and electronic controls for Pumping applications in India. The Company was established in 1965 as a joint venture between Cutler-Hammer, USA, and Indian partners. Since 1977, it is a wholly owned Indian company with global business connections. Our proven range of Industrial Contactors, Overload Relays, Motor starters, ATS Control Panels MCC has, over the years, become well accepted. All our products conform to the latest national and international standards, including labelling for most of them. Content Clarification: 1. The certain category of Control Panels (ATS) 150HP Pump Motor Starter other specified control panel are made exclusive for Centrifugal, Monoblock, Submersible pump pump sets for handling water operated electrically. 2. As these are specific purpose it can't be use in other electrical goods. This is for your information. On and Behalf of, BCH ELECTRIC LIMITED Sd/- (Authorised Signatories) The above 150HP Control Panel ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transformer-starter] reveals that ATS is: Auto Transformer Starter (ATS) are starting devices, for large induction motors, using reduced voltage initially, where availability of current is limited and minimum starting torque is required. The reduced voltage applied results in lower starting current and higher torque. Auto-transformer Starter How it Works: The reduced voltage is applied to the star contactor while starting the motor. The motor accelerates for a preset time of 8 to 12 seconds, limiting input current the star contactor is opened and even lower current is applied momentarily by the auto transformer using the winding as inductors connected in series with motor. The time is short just enough to disconnect star contractor and engage main contactor to supply full voltage in order to achieve full speed simultaneously opening the run contactor and disengage the auto transformer. Application: Pumps Submersible pumps Mixers HVAC Blowers/Fans Extruders grinders Crushers Conveyors 10.4. It remained undisputed as adumbrated by the petitioner in the revision petition [paragraph 7.2] that the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he beauty, convenience or effectiveness of something else and as adjective it has been defined as assisting as a subordinate, adding or contributing in consequential way, present in a minor amount and not essential as a constituent . 11.4. Accessory is not a word of art. The word accessory carries a wide meaning. It is the popular commercial view which has to be adopted. An accessory must be specially adopted for use in principal article, and not of general use. Where the term accessory is not defined in the statute, the same being not a technical or a scientific term, the expression has to be construed as it is ordinarily understood. The expression accessory can be assigned to the equipment which is used as addenda or adjunct, not essential but which adds to its efficiency. Reference may be made to Sales Tax Commissioner Vrs. Lachman Singh, (1972) 30 STC 372 (All); TI Miller Limited Vrs. Union of India, 1987 (31) ELT 344 (Mad); Universal Radiators Vrs. State of Andhra Pradesh, (1989) 73 STC 120 (AP); Jay Industries Vrs. State of Gujarat, (1999) 116 STC 261 (Guj); Union of India Vrs. Rishabydev Textiles, 2002 (141) ELT 352 (Raj). 11.5. Conspectus of Mehra Bros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry for the use in the motor vehicle. Of course, this may not also be a conclusive test but it is given only by way of illustration. Undoubtedly, some of the parts like axle, steering, tyres, battery, etc. are absolutely necessary accessories for the effective use of the motor vehicle. If the test that each accessory must add to the convenience or effectiveness of the use of the car as a whole is given acceptance many a part in the motor car by this process would fall outside the ambit of accessories to the motor car. It is laid down in Deputy Commissioner of Agricultural Income-tax and Sales Tax Vrs. Union Carbide India Ltd., (1976) 38 STC 198 (Ker) that a thing is a part of the other only if the other is incomplete without it. A thing is an accessory of the other only if the thing is not essential for the other but only adds to its convenience or effectiveness. 11.9. In Annapurna Carbon Industries Co. Vrs. State of Andhra Pradesh, (1976) 2 SCC 273 = (1976) 37 STC 378 (SC) , the Court while examining the question whether Arc Carbon is an accessory to cinema projectors or whether comes under other cinematography equipments under tariff Schedule to the Andhra Pradesh Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned before, that where no definition is provided in the statue itself, as in this case, for ascertaining the correct meaning of a fiscal entry reference to a dictionary is not always safe. The correct guide, it appears in such a case, is the context and the trade meaning. In this connection reference may be made to the observations of this Court in CST Vrs. S.N. Brothers, Kanpur, (1973) 3 SCC 496 = 1973 SCC (Tax) 254 = AIR 1973 SC 78. 10. The trade meaning is one which is prevalent in that particular trade where the goods is known or traded. If special type of goods is subject-matter of a fiscal entry then that entry must be understood in the context of that particular trade, bearing in mind that particular word. Where, however, there is no evidence either way then the definition given and the meaning following (sic flowing) from particular statute at particular time would be the decisive test. 11. In the famous Canadian case in King Vrs. Planters Nut and Chocolate Co. Ltd. [1951 CLR Ex 122] Cameron, J. observed that it is not botanist's conception as to what constitutes a fruit or vegetable ... but rather what would ordinarily in matters of commerce in Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encer (Asia) Ltd. Vrs. State of Haryana, (1979) 1 SCC 82 = 1979 SCC (Tax) 38. But there is a word of caution that has to be borne in mind in this connection, the words must be understood in popular sense, that is to say, these must be confined to the words used in a particular statute and then if in respect of that particular items, as artificial definition is given in the sense that a special meaning is attached to particular words in the statute then the ordinary sense or dictionary meaning would not be applicable but the meaning of that type of goods dealt with by that type of goods in that type of market, should be searched. *** 11.12. It is trite that where no definition is provided in the statute for ascertaining the correct meaning of a fiscal entry, the entry should be construed as understood in common parlance or trade or commercial parlance. Such words must be understood in their popular sense. The nomenclature given by the parties to the words or expression is not determinative or conclusive of the nature of the goods. Strict or technical meaning or dictionary meaning of the entry is not to be resorted to. Common sense rule of interpretation and the user test may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. Vrs. CCE, (1986) 63 STC 322 (SC) = 1986 (25) ELT 473 (SC). 11.15. It is well-recognized canon for identifying the commodity in taxation law to fall within the meaning of entry in Schedule of rates is trade parlance meaning or common sense approach attributed to such commodity. As has already been stated earlier, in order to identify the nature of the commodity in question, i.e., ATS, this Court has visited web-portal of manufacturers of ATS from which it could be known that said commodity is adjunct to main goods, i.e., pumps and it aids in smooth functioning of Centrifugal, Monoblock and Submersible pump sets. Therefore, the test of understanding in trade parlance and/or popular parlance can safely be applied to the present context. ANALYSIS AND DISCUSSIONS: 12. Considering the instant case etched on above tests and well-accepted tenets, ATS answers that it is accessory to Centrifugal, Monoblock and Submersible pumps and pump sets . The document like expert opinion supported by Affidavit furnished by the petitioner remained undisputed by the opponent-State of Odisha. This Court is of the firm view that the contention of the petitioner deserves seal of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Tribunal is that no enquiry as to identity of commodity vis- -vis entry in Serial No. 29 of Part-II of Schedule-B was conducted by neither the Sales Tax Officer (Audit) nor the Assessing Authority. Legal position is well-established in Hindustan Ferodo Ltd. Vrs. Collector of Central Excise, Bombay, 1997 (89) ELT 16 (SC), ratio of which is this, that the onus of establishing that a product falls within a particular item is on the Revenue. If the Revenue leads no evidence, then the onus is not discharged. It has been reiterated in Hewlett-Packard India Sales Pvt. Ltd. (now HP India Sales Pvt. Ltd. Vrs. Commissioner of Customs (Import), Nhava Sheva, (2023) 1 SCR 1123 as follows: 23. It goes without saying that since the customs authorities wanted to classify the goods differently, the burden of proof to showcase the same was on them, which they failed to discharge. [ Dabur India Ltd. Vrs. CCE, Jamshedpur, (2005) 4 SCC 9 ]. Hence under the prevalent self-assessment procedure, the classification submitted by the Appellants must be accepted. 12.3. As expert opinion is placed on record by Sri Chitta Ranjan Das, learned counsel for the petitioner-firm and the content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of the lower authority was arrived at by a flagrant abuse of the judicial process or it brings about a gross failure of justice. In the instant case, the Odisha Sales Tax Tribunal candidly observed that the First Appellate Authority instead of conducting enquiry himself into veracity of the items dealt could not have proceeded to allow the appeal by recording that neither the Sales Tax Officer (Audit) nor did the Assessing Authority conduct enquiry in this regard. By observing thus, abruptly the Sales Tax Tribunal held the findings given by Assessing Authority is sustained . Such a conclusion is not only perverse but also based on no evidence. 13.1. The learned Odisha Sales Tax Tribunal while upsetting the conclusion reached at by the Appellate Authority merely stated that said Authority could have conducted enquiry for himself even though it found that the Sales Tax Officer (Audit) or the Assessing Authority did not discharge their respective function. Being final factfinding authority it has failed to keep in mind the ratio settled by this Court in State of Odisha Vrs. Rajkumar Agarwalla, ILR 1974 CUT 1367. At the cost of repetition it is recorded that the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecomes lifeless. [ See Raj Kishore Jha Vrs. State of Bihar, (2003) 11 SCC 519]. 14. Even in respect of administrative orders Lord Denning, M.R. in Breen Vrs. Amalgamated Engg. Union, (1971) 1 All ER 1148 , observed: The giving of reasons is one of the fundamentals of good administration. In Alexander Machinery (Dudley) Ltd. Vrs. Crabtree 1974 ICR 120 (NIRC) it was observed: Failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at. Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the inscrutable face of the sphinx , it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system; reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and relevant evidence or partly on evidence and partly on suspicions, conjectures or surmises and if it does anything of the sort, its findings, even though on questions of fact, will be liable to be set aside by the Court. 13.7. View so expressed being subscribed by this Court, it is, thus, to be observed that question of law, in the present case, does arise for consideration. DECISION AND CONCLUSION: 14. The learned Odisha Sales Tax Tribunal without assigning cogent reason restored the view of Assessing Authority taken in the Assessment Order which was passed in absence of due enquiry as to the nature of the commodities. The consistent stand of the petitioner-firm dealing in pump sets, accessories and spare parts thereof, that ATS (Auto-Transformer Starter) Control Panel, Motor Starter Panel Board and other Control Panel, being accessories of Centrifugal, Monoblock and Submersible pumps and pump sets, is supported by expert opinion, which remained uncontroverted by the opponent. Said expert opinion answers the common parlance test. 14.1. By reversing the conclusion arrived at by the Appellate Authority, the learned Odisha Sales Tax Tribunal essentially held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd is found place in an entry, the same prevails over the generic entry. This principle has been succinctly laid down in Santhosh Maize Industries Limited Vrs. The State of Tamil Nadu, 2023 LiveLaw (SC) 499. In the said case, it has been observed by the Hon ble Supreme Court of India as follows: 24. Law is well settled that if in any statutory rule or statutory notification two expressions are used one in general words and the other in special terms under the rules of interpretation, it has to be understood that the special terms were not meant to be included in the general expression; alternatively, it can be said that where a statute contains both a general provision as well as a specific provision, the latter must prevail. 25. What emerges from the above discussion is that Taxation Entry No.61 is relatable to starch of any kind whereas Exemption Entry No. 8 relates to products of millet . 26. Looking at the specific (Taxation Entry No.61) in contradistinction with the general (Exemption Entry No.8), there can be no manner of doubt that maize starch would be covered by the taxation entry and not by the exemption entry. 14.3. In view of the admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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