TMI Blog1996 (6) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Schedule to the Act. In making assessment as above, the assessing authorities have relied on a circular issued by the Commissioner and on a letter sent by the Ministry of Industry to the Secretary, Merchants Association. The clarification issued by the Commissioner is to the effect that the ball-bearings are taxable at the rate of 2 per cent from April 1, 1982 under entry 7 of the Schedule as accessories to "industrial machinery" on its entry into local area irrespective of their use. Relying on the order of the Commissioner mentioned above, ball-bearings have been assessed to tax under the Act. 3.. The case of the writ petitioners was that, ball-bearings would not fall within entry 7 as they are not industrial machinery or parts or accessories thereof. They contended that the ball-bearings, though could be characterised as parts or accessories or part of machinery, they could not be treated as industrial machinery nor parts or accessories thereof and accordingly, it is outside the purview of entry 7 of the Schedule to the Act. 4.. On the other hand, it was contended by the State that the ball-bearings would come within the purview of entry 7 of the Act as they are part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . That apart, the statutory authority, viz., Commissioner of Commercial Taxes, Karnataka, by his letter dated November 23, 1987 has issued a clarification to the following effect: "Ball-bearings are taxable at the rate of 2 per cent from April 1, 1982 under entry 7 of the Schedule as accessories to industrial machinery on its entry into local area irrespective of their use." The Commissioner is entitled to pass such clarificatory orders in exercise of his powers under section 12(6) and (7) of the Act. When the statutory authorities, in exercise of the statutory powers make clarificatory orders, the subordinate officers will normally follow the above clarification and filing of an appeal before the statutory authorities will be an exercise in futility. In these circumstances and especially in the light of the circular mentioned above, no purpose will be served by filing a statutory appeal and accordingly, writ petitioners were justified in moving this Court under article 226 of the Constitution of India challenging the assessment orders. [See Filterco v. Commissioner of Sales Tax, Madhya Pradesh [1986] 61 STC 318 (SC)]. 8.. The question that arises for consideration is as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned with a duty which is imposed at the time of entry and not how it is used thereafter. The taxable event for the imposition of octroi is the entry and the nature and type of the goods at the point of entry is the relevant factor." 12.. Again their Lordships of the Supreme Court in Nat Steel Equipment Pvt. Ltd. v. Collector of Central Excise [1988] 69 STC 58, interpreting the term "domestic electrical appliances" and accepting interpretation given by the Gujarat High Court, observed as follows: "We agree that it is not necessary to be a domestic electrical appliance that it must be actually used in the home or the house. It must be of a kind which is generally used for household purposes. It appears to us that the types of items concerned in this appeal are generally used for household purposes and that is sufficiently good test for classification in the light of the explanation to tariff item No. 33C." 13.. These decisions of the Supreme Court were considered by a Division Bench of this Court in Assistant Commissioner of Entry Tax v. Mysore Sales Corporation [1992] 84 STC 461; ILR 1991 Kar 3717, in which, a question arose as to whether sewing machines could be subjecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry so as to attract tax under the Act." 17.. We entirely agree with the conclusions reached by the learned Judge. It may be true that ball-bearings may be used as parts or accessories of industrial machinery also, but it is used in every type of machinery, toys and even in other contrivances. In common parlance, ball-bearing is not understood as part or accessory of an industrial machinery, though, no doubt, it may be a part or accessory of a machinery. By the mere use of ball-bearing in industrial machinery by itself cannot bring it within the ambit of entry 7 referred to above. In that view of the matter, we entirely agree with the conclusion reached by the learned single Judge that ball-bearings are not exigible to entry tax under entry 7 of the Schedule to the Act. 18.. Learned Government Pleader placed considerable reliance to Explanation 111 added by Karnataka Act 18 of 1989 and contended that ball-bearing would come within the purview of entry 7: The Explanation reads: " Industrial machinery for the purpose of entry 7 of the Schedule shall mean such machinery which are generally used by an industrial unit whether or not such unit is a factory as defined under the Fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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