TMI Blog2014 (7) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... the Deputy Commissioner, dated July 31, 1993, as confirmed by the Sales Tax Appellate Tribunal by order, dated January 30, 2009, are hereby set aside and the order passed by the Commercial Tax Officer, granting exemption under the heads, viz., depreciation on vehicle, maintenance expenses on tipper and consumables, is restored. - Decided in favour of assessee. - Tax Revision Case Nos. 181, 185,194 of 2009 - - - Dated:- 27-8-2011 - GOPAL REDDY A. AND RAJA ELANGO, JJ. ORDER:- The order of the court was made by A. GOPAL REDDY J. These revision petitions under section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 (for brevity, the Act ), by a dealer registered under the provisions of the Act, are directed against the orders of the Sales Tax Appellate Tribunal, Hyderabad, dated January 30, 2009, in T. A. Nos. 1272, 1273 and 1274 of 2003. The brief facts leading to the disposal of these revision cases are stated as follows: The petitioner was a dealer engaged in works contract and registered under the provisions of the Act and is an assessee under the rolls of Commercial Tax Officer I, Kadapa. In the course of its business activities, he undertakes vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri S. Dwarakanath, learned counsel for the petitioner, contends that the proviso to section 5(f) and Fourth Schedule to the Act deal with exemption of tax on the goods involved in the execution of the works contract. The entire controversy is how to determine the value of the goods. Relying upon rule 6(3)(ii) of the Rules, he contends that when the dealer is not maintaining accounts to determine the value of the goods, the assessing authority can decide the same. Rule 6(2) of the Rules is not exhaustive but it is only illustrative. It was further contended that though rule 6(2) of the Rules enumerates certain categories of amounts, that are to be deducted from the turnover, still the assessing authority, depending on the facts of each case can deduct the amounts which are similar to the categories mentioned in (a) to (i), though had different nomenclature. But the assessing authority must give detailed reasons. The directions issued under the sales tax manual are binding on the assessing authority as well as the Deputy Commissioner for granting exemption. The contractor has to spend certain amounts for maintenance of trippers owned and used in execution of contract and, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aler. (a) to (c) . . . (d) Charges for obtaining on hire or otherwise machinery and tools used for the execution of the works contract; (e) . . . (f) Cost of establishment of the contractor to the extent it is relatable to supply of labour and services; (g) to (i) . . . Para 11.2 of the sales tax manual on which reliance is placed, reads as follows: 11.2 Though rule 6(2) enumerates certain categories of amounts, that are to be deducted from the turnover, still the assessing authority, depending on the facts of each case can deduct the amounts which are similar to the categories mentioned in (a) to (i), though had different nomenclature. But detailed reasons must be given. It is the contention of the learned counsel for the petitioner that once the assessee is entitled to benefit, when he hired the machinery from the third parties, he cannot be in a disadvantageous position by using his own vehicles. Therefore, the expenditure incurred for maintenance of the vehicle can be treated as hire charges. Therefore, he is entitled to the benefit of exemption. In Gannon Dunkerley Co.'s case [1993] 88 STC 204 (SC), the Supreme Court after elaborately discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods sold can be taxed as sales tax. A similar question arose before the Karnataka High Court in Larsen Toubro Limited's case [2010] 34 VST 53 (Karn) , wherein on question No. 1 with regard to the deduction in respect of depreciation on plant and machinery owned and used by the petitioner therein for executing the works contract, while repelling the contention of the Government Pleader, the depreciation is conspicuously absent either in rule 6 particularly, Explanation 1 to sub-rule (4) of rule 6 the claimant is entitled to the deduction, held that even assuming that rule 6 when read in its entirety does not contain the word depreciation but nevertheless should necessarily take the hue from the permitted deductions as indicated by the Supreme Court in clause (d) occurring at page 235 of the judgment which reads as charges for obtaining on hire or otherwise, machinery and tools used for the execution of the works contract and examining the scope of Explanation 1 to sub-rule (4) of rule 6 of the Rules construed in the background and answered the question as under: We say so, for the reason that it is the goods of the assessee for the purpose of execution of the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rule 6(d), the Legislature or the rule-making authority used those words in all-inclusive sense, i.e., amount spent on machinery and tools in any form. The principle, which should govern such a case in my opinion, has been clearly set out in Randall on Cardinal Rules of Legal Interpretation, Third Edition, at page 355. They are in these words: General words in a statute are prima facie to be taken in their usual sense. General words following specific words in a statute are prima facie to be taken in their general sense unless the reasonable interpretation of the statute requires them to be used in a sense limited to things ejusdem generis with those which have been specifically mentioned before. If the particular words exhaust the whole genus the general word must refer to some larger genus. In Trade Links Limited, New Delhi v. State of Uttar Pradesh AIR 1982 SC 1137, while interpreting section 30(2) of the Uttar Pradesh Excise Act (4 of 1910) (as amended by U.P. Amending (Re-enactment and Validation) Act (5 of 1976), it was held that the sum payable under sub-section (1) may be determined either by auction or by calling tenders or otherwise. It was further hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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