TMI Blog2005 (10) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1994-95, the assessee had filed its annual returns in form 5 before the assessing authority, declaring taxable purchases amounting to Rs. 3,43,920.72 liable for payment of entry tax. On verification of the books of accounts, the assessing authority has noticed, in the returns filed, the assessee had not disclosed the causing of entry of imported industrial machinery, namely, industrial sewing machines amounting to Rs. 4,48,31,570 into its industrial area situate at KIADB area. This view of the assessing authority is fortified by the inspection report of the Intelligence Officer of the department who had inspected the business premises of the assessee on January 17, 1995. In view of all these materials that were available on record, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the turnover which was liable to tax under Entry Tax Act. Secondly, reliance was also placed on the division Bench decision of this court in the case of Assistant Commissioner of Entry Tax (Assessment-I) v. Mysore Sales Corporation [1992] 84 STC 461 to contend that causing of entry of sewing machine into local area would not attract the charging provisions under the Entry Tax Act. Therefore, the assessing authority was not justified in rejecting the turnover declared by the assessee and further, in estimating turnover without assigning any reasons whatsoever. In the appeal filed against the order passed by the assessing authority under sections 5(4) and 5(5) of the KTEG Act, the appellant had contended, that it is a new industrial unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the expression industrial machinery . After considering the objections filed to the show cause notice, the revisional authority is of the view that since the entry provides for levy of tax on machinery (all kinds), sewing machine is a machinery falling under Sl. No. 1 of Notification No. FD.173.CET.98 dated September 23, 1998 and therefore, tax at the rate of 2 per cent is leviable on the value of sewing machine. Even before the revisional authority, it was not the contention of the assessee that its industrial unit is situated in a plot allotted by the KIADB and therefore it would not fall within the meaning of the expression local area as defined under section 2(5) of the KTEG Act. But for the first time before this court a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even assuming the sewing machines would fall under entry machinery (all kinds) as provided in the Government Notification dated September 23, 1998. Secondly, it is contended that sewing machines are not industrial machinery and therefore entry tax is not attracted as held by this court in the case of Assistant Commissioner of Entry Tax (Assessment-I) v. Mysore Sales Corporation [1992] 84 STC 461. In so far as the first contention canvassed, in our view, it is no more res integra, in view of the law declared by the apex court in the case of Widia (India) Ltd. v. State of Karnataka [2003] 132 STC 360. In the said decision, the Supreme Court has observed as under: Establishment of industrial areas under the Karnataka Industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existed, was pleased to observe that the taxable event for the imposition of octroi or entry tax is the entry of goods within the municipal limits or local areas, and the nature and type of the goods at the point of entry are the relevant factors in determining the rate of duty and not how the goods are used thereafter. Proceeding further, the court has observed as under: Sewing machines are not industrial machinery, and cannot be taxed under entry 7 of the Schedule to the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1979. Whether after entry they are used in garment factories or domestically will have no bearing on the exigibility of entry tax thereon. The precise question before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a machine, which when they are assembled, form complete machine. Reference can be made to the decision of the Gujarat High Court in the case of State of Gujarat v. Minu Chemical Pvt. Ltd. [1982] 50 STC 339. If this test is applied to the present case, sewing machines would definitely fall under Sl. No. 1 of the notification dated September 23, 1998, which provides for machinery (all kinds) . In the present case, the assessee is engaged in the manufacture of export readymade garments. For its business activity during the assessment year 1994-95, the assessee had caused entry of sewing machines into local area. The assessing authority while concluding the assessments under section 5(4) of the Act, had levied entry tax at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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