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2015 (10) TMI 46 - HC - VAT and Sales TaxLevy of tax under the provisions of the Karnataka Tax on Entry of Goods Act, 1979 - Classification of product - Whether L & T 752 vibratory compactor is a 'motor vehicle' or a 'machinery' and therefore, liable to tax under the KTEG Act - Held that:- Under the Scheme of KTEG Act, Chapter II deals with levy of tax. Section 3 is the charging section. It provides that, the tax shall be levied on entry of any goods specified in the First Schedule into a local area for consumption, use or sale therein. Chapter IIA deals with levy of tax on motor vehicles exclusively. Section 4A is the definition section which defines what a "motor vehicle" is under section 4A(d). Section 4B is the charging section in so far as motor vehicles are concerned. It starts with a non obstante clause. It provides that, notwithstanding anything contained in section 3, there shall be levied and collected a tax on the purchase value of a motor vehicle on entry of which is effected into a local area for use or sale therein and which is liable for registration or assignment of a new registration mark in the State under the Motor Vehicles Act, 1988. The rate at which tax is levied on such motor vehicle is at the rate specified in the notification to be issued. Understanding of the Government is that tax is leviable under section 4B, on all earth movers, dippers and bulldozers and the like and not under section 3. The Revenue relies on the Notification No. FD 11 CET 2002(1) dated March 30, 2002 where the tax is levied under section 3 of the KST Act on machinery (all kinds and parts and accessories thereof but excluding agricultural machinery). If we read these two notifications, keeping side by side, the understanding of the State is earth movers, dumpers, dippers, bulldozers and the like and adopted for uses on road do not fall within the meaning of the word machinery (all kinds). - the contention of the Revenue that the motor vehicle is not registered, it cannot be treated as motor vehicle and has to be treated as machinery is without any substance. - Decided against Revenue.
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