TMI Blog2007 (9) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the orders passed by the assessing officers for the years 1982-83 to 1996-97 is not only erroneous but the same are prejudicial to the Revenue as held by the Supreme Court in a catena of cases. Reliance placed by the learned Senior Counsel upon the decision of the Supreme Court with reference to the earlier assessment orders and the order of the KAT had not been followed by the Revenue. Therefore questions at "1" and "3" do not arise to answer the same in favour of the assessee. In view of the aforesaid reasons recorded in this judgment, on the basis of the decisions of the Supreme Court and two decisions of this court referred to supra, we answer the questions referred to supra against the assessee. Revision dismissed. - - - - - Dated:- 14-9-2007 - GOPALA GOWDA V. AND ARALI NAGARAJ, JJ. ORDER:- The order of the court was made by V. GOPALA GOWDA J. This revision petition is filed by the assessee questioning the correctness of the order dated August 31, 2005 passed in S.T.A. No. 2375 of 2004 in dismissing the appeal and confirming the order of the assessing authority by framing the following three questions of law and urging various grounds in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment years 1982-83 to 1996-97 has not considered these goods as machinery parts or accessories in order to levy entry tax. But after due consideration, the respondent, in the course of assessment held that the small machine tools dealt by the assessee are not parts and accessories of machinery and not liable to entry tax. Therefore, the assessee has not effected any purchases of scheduled goods liable to tax under the Karnataka Tax on Entry of Goods Act, 1979. It is further stated that the Commissioner of Commercial Taxes clarified through its circulars with regard to the above factual position. It is the further case of the assessee that contrary to the assessment orders passed by various assessing officers for the years 1982-83 and 1996-97, the assessing officer proposed to record the goods of the assessee as machinery parts or accessories and levied tax at two per cent under the provisions of the KTEG Act, which was objected by the assessee by producing aforesaid earlier assessment orders, the same was not taken into consideration by them at the time of passing assessment order. Aggrieved by the said order, the assessee filed appeals before the Joint Commissioner of Commercial T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consumables and not parts of machinery as per entry No. 52 of the KTEG Act and therefore, they are not liable to pay entry tax to the department. It is further contended that, that being the legal position, again the assessing officer for the assessment years 2000-01 proposed to refer the same goods as machinery parts and levied tax at two per cent. The petitioners filed their objection statements to the proposed entry tax on September 27, 2002 vide its letter dated September 26, 2002 raising the aforesaid legal contentions and they requested the respondent not to levy the entry tax in respect of the goods in question and requested to drop the proceedings. It is the case of the assessee that despite the order of the Tribunal and objections filed by the assessee, the assessing officer, without application of mind confirmed the proposal for levy of tax by two per cent in respect of the goods vide its order dated October 31, 2002 for the assessment year 2000-01. The same is contrary to the law and practice adopted by the Revenue for a long number of years. Therefore, it had filed an appeal before the Joint Commissioner of Appeals. He has also affirmed the order without referring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82-83 to 1996-97 and 1998-99 has taken a particular view on the point that the goods of the assessee are not covered by word accessories mentioned in entry 52 of the Schedule to the KTEG Act. He further contended that if the members of the Bench differ from the previous order of the Tribunal, the matter should have been referred to the Chairman of the KAT for placing it before a Full Bench and it is impermissible to the Bench to suo motu differ from the other Bench's order on the same legal question and decide any matter in a manner as to create a conflict between the orders of co-ordinate benches of the Tribunal. It is contended by the learned Senior Counsel that, that has not been done by it in the instant case. Therefore, the learned Senior Counsel submits that question No. 2 also arises for our consideration and requires to be answered in favour of the assessee. The learned Senior Counsel submits that having regard to the factual position that over a period of 20 years, the Revenue has accepted that the goods in question are not accessories and they do not fall under entry 52 of the Schedule to the KTEG Act, therefore, it did not collect tax from the purchasers for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s vitiated in law. That order of the KAT should have been challenged earlier by the Revenue. No doubt, the same has not been challenged by it, but that cannot be used as a res judicata by the assessee as it causes prejudice and loss to the Revenue. Therefore, she submits that the question Nos. 1 and 3 framed in this revision petition has to be answered against the Revenue. Learned A.G.A. has elaborated her submissions by placing strong reliance upon the observations made by this court in unreported decision in Writ Petition Nos. 12450 to 12453 of 1988 and 7046 of 1989 disposed of on July 23, 1992, wherein this court while examining the demand notice and assessment order for the assessment years 1982-83, 1983-84 and 1984-85, granting the relief in favour of the assessee, who is the petitioner in the said writ petitions after referring to the legal contentions as has been urged in this case that the goods are not accessories as they did not form part of machinery. With reference to the abovesaid contention this court made observations at para 3 which relevant portion will be referred to in the reasoning portion. Placing strong reliance on the same, the learned AGA contends that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KAT, by the members of the Bench with a request to refer the matter to a larger Bench as they have substantially departed from previous decisions of the Tribunal in Appeal Nos. 1258-1259/2001 dated August 13, 2002, in view of the Division Bench decisions of this court wherein this court followed the decision of the Supreme Court and held that the accessories in those goods are held to be the machinery which decisions are applicable to the facts and circumstances of the case. Therefore, she submits that on the basis of the judgment of the Supreme Court and this court the earlier order of KAT is bad in law. Therefore, reliance placed upon regulation 54A, clause (1) of the Regulations, the contention urged on behalf of the petitioner that the question of law framed at 2 in this revision petition would arise for our consideration is only untenable in law. After hearing the learned Senior Counsel and AGA on behalf of the parties at length, we have carefully examined the above rival legal contentions urged on behalf of the parties with a view to consider and answer the above questions and we answer the same against the assessee for the following reasons: The learned AGA Smt. Suj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appeals before the Karnataka Appellate Tribunal. The KAT has considered the rival legal contentions urged on behalf of the parties with reference to the entry No. 1 clause (iii)(a) and (iii)(e) of the KST Act, without placing reliance upon the specific entry in relation to the goods in question in the Schedule to the KTEG Act and passed the judgment in favour of the assessee holding that small tools are not machineries as they are consumables. That the judgment is not challenged by the Revenue before this court is an undisputed fact. In this regard, the Commissioner has filed an affidavit as per our direction. The relevant paragraphs 5, 6 and 7 are extracted as under as they are very relevant for our purpose: 5. The order passed by the Tribunal in S.T.A. Nos. 1258-59/2001 dated August 13, 2002 was reviewed by the then Joint Commissioner (Legal) Sri. Venkataswamy (retired) who opined on March 28, 2003 that the findings given by the K.A.T. are in order and no interference is justified. This file along with the opinion of the then Joint Commissioner of Commercial Taxes (Legal) (retired) was submitted to Sri. D.V. Shivaram, the then Additional Commissioner of Commercial Taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is erroneous and prejudicial to the interest of Revenue. In the backdrop of the factual aspects of this case and the legal position laid down by the apex court and this court in the cases referred to supra, we have examined the rival legal contentions urged on behalf of the parties to answer the aforesaid questions Nos. 1 and 3 with reference to the decisions cited by both learned Senior Counsel and AGA in support of their respective submissions. For this purpose it is necessary for us to extract the entry 52 of the First Schedule to the KTEG Act which reads thus: 52. Machinery (all kinds) and parts and accessories thereof but excluding agricultural machinery. The Division Bench of this court in Pioneer Enterprises case [2004] 134 STC 138 with reference to the phrase accessories , examining the entries in the KST Act, 1957 and notifications dated March 26, 1996 and March 29, 1997 has examined the factual aspect regarding whether T.V. antenna is an accessory for the purpose of sales tax under the provisions of the KST Act, with reference to the decisions of the Supreme Court in the case of Annapurna Carbon Industries Co. v. State of Andhra Pradesh reported in [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Joint Commercial Tax Officer reported in [1991] 80 STC 233 has examined the question whether car seat covers are articles adapted generally as parts and accessories of the motor vehicle and after referring to the Webster's Comprehensive Dictionary International, held that the word accessory is part of sprinkler system. After referring to the judgments of the Supreme Court in Annapurna Carbon Industries Company's case [1976] 37 STC 373 and Mehra Brothers' case [1991] 80 STC 233, the Division Bench of this court has with reference to the relevant portions of Mehra Brothers' case [1991] 80 STC 233 extracted the meaning of accessory from Webster's Comprehensive Dictionary International, which relevant portion extracted in the Division Bench in the case of Premier Irrigation Equipments Pvt. Ltd. [1993] 88 STC 468 is extracted in this judgment which reads as hereunder: In Webster's Comprehensive Dictionary International, Vol. 1, the word 'accessory' has been defined as a thing that aids subordinately; an adjunct; appurtenance; accompaniment such items of apparel as complete an outfit, (2) aiding the principal design, or assisting subordinately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent years unless there is some material change in the facts. The said principle is not applicable to the fact-situation. The officers of the Revenue did not interpret the word accessory whether it is a machinery as mentioned in entry 52 of the First Schedule to the Act as directed by this court in writ petition orders referred to supra, which order was passed in the case of the assessee and further, as could be seen from the two Division Bench decisions referred to supra of this court, the word accessory used in the Schedule to the KST Act was examined by the KAT with reference to the interpretation made by the Supreme Court way back in the years 1976 and 1990. The Division Bench of this court in the case of Pioneer Enterprises [2004] 134 STC 138 has held that to determine accessory or a component, it is essential for us to see whether the product is an essential ingredient or part of the final product and without which the final product is not capable of use and further with reference to the car seat covers in the case of Mehra Bros. [1991] 80 STC 233 the Supreme Court has held that the articles are adapted generally as parts and accessories of the motor vehicles and f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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