TMI Blog2007 (2) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... s of those goods locally. In the annual returns filed, the assessee-company had classified the sales of JCB 3D and its parts and accessories and had admitted the liability of gross turnover on their sale at one per cent. The return so filed is not accepted by the assessing authority and therefore, had issued a proposition notice, proposing to levy tax on the goods sold by the assessee-company under entry 1(i)(a) of Part M of the Second Schedule appended to the KST Act and not under entry 1(ii)(e) of Part M of the Second Schedule to the KST Act as claimed by the assessee-company. The assessee-company had objected to the proposal made by filing its detailed objections. The assessing authority after considering the objections so filed, has confirmed the proposal made by him in the proposition notice and in that, has concluded that the goods sold by the assessee-company, namely, JCB 3D, its parts and accessories thereof are nothing but earthmovers and therefore, they would fall under specific entry 1(i)(a) of Part M of the Second Schedule appended to the KST Act. The assessee-company being aggrieved by the order of assessment so passed by the assessing authority, had filed fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Karnataka Appellate Tribunal in S.T.A. No. 596 of 2003, dated January 29, 2004. In the memorandum of revision petition, the assessee-company has raised the following substantial questions of law for our consideration and decision. They are: (a) Whether, on the facts of the petition, the Joint Commissioner under revisional jurisdiction can exercise jurisdiction by invoking section 21(2) of the KST Act, 1957? (b) Whether the commodity that is sold by the petitioner, namely, JCB 3D tractor falls within entry 1(i)(a) of Part 'M' of the Second Schedule as held by the Joint Commissioner and the Appellate Tribunal or under entry 1(ii)(e) of Part 'M' of the Second Schedule as contended by the petitioner? (c) Whether when two views are possible, is it not a settled position of law that the entry which is more beneficial to the tax payer will have to be adopted? We have heard Sri Sarangan, learned Senior Counsel for the assesseecompany and Smt. Sujatha, the learned Additional Government Advocate for the Revenue. Both the learned counsel have projected their case very ably, which has made our task a little difficult to answer the questions of aw raised i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing authority, if for any reason, the order passed is erroneous and prejudicial to the interest of the Revenue. In the present case, the assessing authority had passed an order after the remand order passed by the first appellate authority by taking into consideration the nature of goods sold by the assessee-company. The order so made in the opinion of the revisional authority is improper, illegal and erroneous order and thereby prejudicial to the interest of the Revenue and therefore, requires to be revised. To arrive at this conclusion, the revisional authority has assigned more than one reason and those reasons prima facie do not appear to be either arbitrary or unreasonable. Therefore, this thinking and reasoning of the revisional authority cannot be said to be one without jurisdiction or without authority of law. Therefore, the first question of law framed by the assessee-company requires to be answered in the negative, i.e., in favour of the Revenue and against the assessee-company. To answer the second question of law raised by the assessee-company, it is appropriate to refer to the literature produced by both the learned counsel in justification of the claims and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty vehicles, specially designed for executing engineering and construction tasks. This is so far JCB 3D machines are concerned. Now coming to the tractor , the same is not defined under the Act. The dictionary meaning is, a self-propelled power unit, which is used to pull loads, to carry and operate tillage, cultivating and harvesting machinery, and to provide power through a suitable belt pulley, power take off or other power outlet, to drive stationary and draw implements and machines. Tractors are powered with internal combustion engines. The word tractor was coined by combining parts of the word traction and motor . The tractors are of different varieties. Farm or agricultural tractors, which are used in factories for handling freight and baggage at the terminals and warehouse, road tractors used for road building and some times for carrying load and military tractors or tanks used in military operations and warfare. This is with regard to tractors. The entries, which are relevant for the purpose of this case are entry 1(i)(a) and entry 1(ii)(e) and (ee) of Part M of the Second Schedule appended to the KST Act. Entry 1 is as under: Entry 1: Machinery that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is used, it can only mean, any type of earthmovers and saves all species or classes of earthmovers and by way of illustration, it speaks of dumpers, dippers, bulldozers and anything akin to those machineries. Therefore, by this entry, the Legislature intends to rope in such machineries, which are mainly used for the purpose of earthmoving for the purpose of taxation under the KST Act. The other entry, which we are concerned in this revision petition, is agricultural machinery . The entry speaks of machinery which are used for agricultural purpose. The expression agriculture means, the science and the art of cultivating the soil; including the gathering in of the crops and the rearing of livestock; farming, etc. It is the central idea of either tillage of the land or sowing of seeds or planting or similar work on the land which invests the operation with the characteristic of agricultural operations. Agriculture is the basic idea underlying the expression agricultural machinery . The basic operations would require tilling of the land, sowing of the seeds, planting and similar operations on the land and such other operations requires to be performed for harvesting and ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery sold by the assesseecompany is a tractor falling under entry 1(ii)(e) of Part M of the Second Schedule appended to the KST Act. The learned Senior Counsel would further submit that even in common parlance, JCB 3D is known as tractor and therefore, the revisional authority was not justified in invoking his revisional powers to upset a wholly justified, proper and legal order. In aid of his submission, the learned Senior Counsel strongly relies on the observations made by a Full Bench of the Madhya Pradesh High Court in the case of RME Works v. Commissioner of Sales Tax [1976] 38 STC 310. In the said decision, the court was considering entry 44 of Part II of the Second Schedule to the Madhya Pradesh General Sales Tax Act, 1958, which speaks of all machineries or machines worked by electricity, diesel or petrol and spare parts and accessories thereof excepting agricultural machinery and implements and parts thereof. The issue before the court was, whether a tractor can fit into the entry and to be treated as agricultural machinery. The court after a detailed discussion, had come to the conclusion that the tractors sold by the assessee were designed and manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference between a tractor and other vehicles is that the tractor merely pulls another item of machinery. Rear dumper as well as pay loader are self-moving machineries with wheels. As they do not pull any other item, it is not possible to accept the contention that these fall within the scope of the word tractor and in that event independent of item 55A they cannot be brought within the scope of the First Schedule. In our opinion, the observations made by the Madras High Court in no way would assist the learned Senior Counsel for the assessee-company. The competing entries which the court was considering was entirely different from the one we are concerned with in this revision petition. Secondly, the issue before the Madras High Court was entirely different from the one we are asked to decide in this revision petition. The only similarity, at the most, between these two cases is the expression tractor , which has been used in the decision in extenso . It is true that a tractor is merely a mechanical device, which draws or pulls something. It is that machine the Legislature recognises as agricultural machinery in the entry appended to the Act. The assessee-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, ideas and outlook. We really appreciate the idea mooted by the learned Senior Counsel, but this suggestion cannot be accepted, when the Legislature has taken all precautions and care to treat different machines constructed for different purposes to fall under different entries and exigible for different rate of tax. Though this was our thinking, the learned Senior Counsel to change our mindset did bring to our notice, the note made by learned author in Kanga and Palkivala (Ninth Edition), wherein the learned author has commented that it is presumed that Parliament intends the court to apply to an ongoing Act a construction that continuously updates its wording to allow for changes. The interpretation must keep pace with changing concepts and values and should undergo adjustments to meet the requirements of the developments in the economy, law, technology and the fast changing social conditions . The learned Senior Counsel would tell us further, that this progressive interpretation is now adopted by the apex court, by relying on the decision of the apex court in the case of Commissioner of Income-tax v. Podar Cement Pvt. Ltd. [1997] 226 ITR 625, wherein the court has obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to presume that Parliament intended the Act to be applied at any future time in such a way as to give effect to the true original intention. Accordingly the interpreter is to make allowances for any relevant changes that have occurred, since the Act's passing, in law, social conditions, technology, the meaning of words, and other matters. Just as the US Constitution is regarded as 'a living Constitution', so an ongoing British Act is regarded as 'a living Act'. That today's construction involves the supposition that Parliament was catering long ago for a state of affairs that did not then exist is no argument against that construction. Parliament, in the wording of an enactment, is expected to anticipate temporal developments. The drafter will try to foresee the future, and allow for it in the wording. An enactment of former days is thus to be read today, in the light of dynamic processing received over the years, with such modification of the current meaning of its language as will now give effect to the original legislative intention. The reality and effect of dynamic processing provides the gradual adjustment. It is constituted by judicial interpreta ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
