TMI Blog1982 (7) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... to sales tax amounting to Rs. 1,206.32 at the rate of 3 per cent. Subsequently a notice under section 22 of the Sales Tax Act was issued to the petitioner and the Sales Tax Officer, vide his order dated 19th August, 1975, corrected the assessment order dated 29th January, 1975, by determining the tax payable by the petitioner in respect of its turnover of pumping sets as Rs. 2,412.66 instead of Rs. 1.206.32 calculated at the rate of 6 per cent instead of 3 per cent. Being aggrieved by the order of the Sales Tax Officer the petitioner went up in appeal before the Assistant Commissioner (Judicial), Sales Tax, Jhansi, and urged that the pumping sets being agricultural implements had rightly been assessed to tax at the rate of 3 per cent. The view of the Sales Tax Officer that the turnover thereof should be taxed at the rate of 6 per cent was clearly erroneous. The Assistant Commissioner repelled the plea raised by the petitioner and pointed out that in the relevant assessment year turnover of the pumping sets had been assessed at 3 per cent treating it as an agricultural implement. According to section 9 of the Sales Tax (Amendment) Act, 1974, water pumps had always to be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of pumping water to field were agricultural implements other than those worked by human or animal power, and as such their turnover was liable to tax at the rate of 2 paise per rupee. It cannot be doubted that the scope and ambit of the nature of goods covered by Notification No. S.T. 3609/X -900(21)-69 dated 1st July, 1969, which was in force during the assessment year 1970-71, is the same as that of the goods mentioned at serial No. 38 of Notification No. S.T. 1365/X-990-1956 dated 1st April, 1960. It is thus obvious that unless there has been some change in law the turnover of the pumping sets would under Notification No. S.T. 3609/X-900(21)-69 dated 1st July, 1969, also be liable to tax at the rate of 3 per cent treating the same as an agricultural implement. It appears that prior to the enactment of the Uttar Pradesh Sales Tax (Amendment and Validation) Act, 1971 (U.P. Act No. 20 of 1971), which received the assent of the Governor on 21st August, 1971, and was published in the U.P. Gazette dated 22nd August, 1971 (hereinafter referred to as the 1971 Amendment Act), the State Government was authorised to issue notifications fixing the rate at which the turnover of a particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned that agricultural implements, other than those worked by human or animal power and tractors, including their parts and accessories other than tyres and tubes shall be taxed at the point of sale by the manufacturer or importer. Likewise at item No. 52 of the same schedule it provided that the turnover of machinery and spare parts of machinery, not being such machinery or spare parts thereof as are taxable under any other item in this schedule shall also be taxable at the point of sale by the manufacturer or importer. It is only by virtue of the provisions contained in section 3-AB read in the light of item No. 111 in the Second Schedule inserted by section 16 of the 1971 Amendment Act read along with the proviso to sub-section (1)(a) of section 3-A of the substituted section which lays down that the rate prevailing by virtue of section 3-AB immediately before the commencement of the 1971 Amendment Act shall continue in force until altered by any such notification issued under section 3-A(1)(a) that the turnover of agricultural implements continued even after passing of the 1971 Amendment Act to be taxable at the rate of 3 per cent as provided in Notification No. S.T. 3609/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Court appears to have, without saying so in so many words, taken the view that the amendment made by section 9 of U.P. Act No. 17 of 1974 in entries Nos. 1 and 52 of the First Schedule (inserted in the Sales Tax Act, 1948, by section 16 of the 1971 Amendment Act) indicates that the legislature wanted to make it clear that for purposes of the Sales Tax Act water pumps should not be treated as agricultural implements but should be placed at par with machineries and spare parts specified in item No. 52. The Bench accordingly held that in view of the fact that it has been provided that the amendment by way of substitution made by section 9 of U.P. Act No. 17 of 1974 will be deemed always to have been substituted, the meaning given to the expression "agricultural implements" as used in Notification No. S.T. 1365/X-990-1956 dated 1st April, 1960, by the Full Bench in the case of Engineering Traders v. State of U.P. [1973] 31 STC 456 (FB); 1973 UPIC 91 (FB), was not available to the assessee in the case before it. It cannot be doubted that the legislature, when it enacted section 9 of Act No. 17 of 1974 and provided that the entries substituted by it shall be deemed always to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1974 and that for such earlier period as well their turnover had to be treated as that of machinery as distinguished from agricultural implements. The Division Bench did not consider the question with regard to the extent of retrospective operation of the amendment made in the First Schedule for the period prior to the introduction of the schedule in the U.P. Sales Tax Act. Accordingly it cannot be treated as an authority for the proposition that entries Nos. 1 and 52 of the First Schedule, as substituted by section 9 of U.P. Act No. 17 of 1974, were to affect the liability to tax, incurred by the petitioner, even for a period prior to the inception of the schedule itself. Interpreting the decision of this Court in Basant Industries, Agra v. Commissioner of Sales Tax, U.P. [1975] 36 STC 209; 1975 UPTC 88 in the aforesaid manner, the position that emerges is that the decision of the Full Bench in the case of Engineering Traders v. State of U.P. [1973] 31 STC 456 (FB); 1973 UPTC 91 (FB) to the effect that the expression "agricultural implements" in Notification No. S.T. 6552/X-900/(3)-65 held full sway in respect of various assessment years till the coming into force of the 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1970-71 was to be treated as the turnover of "agricultural implements" liable to be taxed at the rate of 3 per cent was, in our opinion, quite correct and did not suffer from any error whatsoever. The Sales Tax Officer as well as the appellate authority went wrong in holding, on the basis of the amendment made by section 9 of U.P. Act No. 17 of 1974, in the First Schedule inserted by the 1971 Amendment Act, that pumping sets were not to be treated as agricultural implements in respect of the petitioner's assessment for the year 1970-71. There being no error in the original assessment order passed by the Sales Tax Officer, there was nothing which could be corrected by him in proceedings initiated under section 22 of the U.P. Sales Tax Act. Before parting with the case, we may observe that the learned standing counsel appearing for the respondents urged that Notification No. 7098/X1012-1965 dated 1st October, 1965, providing that the turnover of machinery and spare parts of machinery, not being such machinery or spare parts thereof as are taxable under any of the notifications issued under the aforementioned section shall be liable to tax at the rate of 6 paise per rupe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) no court shall enforce any decree or order directing the refund of any such tax" was enacted merely with a view to regularise the imposition, assessment, levy or collection of sales tax under the various notifications specified in the Second Schedule. It had nothing to do with the ambit and scope of the expressions used in various notifications. Viewed in the light of the contents of the proviso to newly added section 3-A, it appears that the only object of mentioning various notifications in the Second Schedule to the 1971 Amendment Act was to provide for the taxes being levied at the rates mentioned in them till such time as they were altered by a fresh notification under section 3-A(1)(a). We are unable to see as to how anything contained in section 3-AB can be utilised to extend the retrospectivity of the provisions contained in section 9 of U.P. Act No. 17 of 1974 beyond inception of the First Schedule itself. We, therefore, do not find any force in this submission of the learned standing counsel which certainly appears to be based on extremely invalid reasoning as well. The petition, therefore, succeeds and is allowed. The order of the Sales Tax Officer dated 19th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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