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TMI Blog2015 (1) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... onic items. The assessee has claimed exemption from payment of entry tax under the Act. The assessing authority found that on verification of books of account, it has revealed that the assessee has received currency counting machines and bundling machines amounting to Rs. 22,50,950/- from its Head Office and also other branches outside the State. The assessee had not declared the said turnover and paid the entry tax thereon. According to the assessing authority, currency counting machines and bundling machines comes under the entry machinery (all kinds) and liable for tax @ 2% as per Notification No. FD 11-CET/2002, dated 30-3-2002, though the assessee had caused the scheduled goods into the local area. Therefore, he proposed to conclude the assessment to the best of his judgment under Section 5(4) of the KTEG Act. 3. A proposition notice was issued on 15-10-2005 which was served on the assessee on 27-10-2005. The assessee filed his objections contending that the currency counting machines and bundling machines are not liable for entry tax under the aforesaid Notification. Therefore, he sought for dropping of the proceedings. The assessing authority on consideration of his ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achines caused entry into the local area by the appellant. Therefore the appeal was allowed, and the assessment order was set aside. 5. The Additional Commissioner exercising his suo motu power of revision under Section 15(2) of the Act found that the order of the appellate authority is erroneous in so far as it is prejudicial to the interest of the Government revenue and therefore, initiated proceedings. Therefore, he issued a notice to the assessee calling upon the assessee to file his written objections within ten days from the receipt of the notice and also giving him an opportunity of being heard. After service of notice, the assessee entered appearance and filed written objections. After hearing the assessee and considering the objections filed by him, the Revisional Authority held that, the judgment relied upon by the appellate authority has no application to the facts of this case as the dispute involved therein is, whether the item involved was an electronic goods or a Computer? Whereas, in this case, the dispute is, whether the item is a "machinery" or an "electronic goods". He held, currency counting machine is not an electronic goods. It is a machine which falls u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency counting machines as machines only. The buyers as seen from the aforesaid documents are banks and financial institutions like Bank of India, Punjab National Bank, State Bank of Mysore, etc. It is clear that both the seller and buyer have traded in the goods on bargains as machinery. As per statements available in the assessment records like Profit and Loss account, purchase statements, stock statement etc., the goods in question is classified as machinery. It is in this background, the question for consideration is, is it a "machinery" or an "electronic goods?" The appellate authority was of the view that in commercial circles and in common parlance, a machinery is understood to be a mechanical contrivance which produces output when an input is fed into it either manually or any other means. But in the case of currency counting machine and bundling machine, no input could be induced so as to obtain an output instead it only displays the number of currencies counted and bundled with the operation of the said machines. When the currencies are placed in the box provided in these machines and when the button provided therein is pressed, the flow of electrons takes place within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of language, describe a particular thing as machinery? 11. The said judgment of the Privy Council has been followed subsequently by various Courts by this country. 12. A Division Bench of this Court following the said judgment of the Privy Council in the case of State of Mysore v. M.N.V. Rao reported in [1964] 15 S.T.C. page 540 held as under : "In simpler language 'machinery' is a contrivance whereby several things are put together to work in such a way that force may be applied at a most convenient point in a most convenient way to get a particular work or an item of work done or to produce a specific article or manufactured goods". "If this is the essential feature of a machinery which distinguishes it from other things, the mode or the manner in which power is fed into it or force is applied need not and should not make any difference. It is conceded, for example, that a machinery would be a machinery whether it is fed by electrical power or other form of power applied by steam or generated by burning combustible oils. If the mode or the manner in which the power is applied makes no difference in these specified cases, it should make no difference either if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense. A sales tax statute, being one levying a tax on goods, must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning ascribed to it in common parlance. Viewed from that angle, both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include "charcoal" in the term "coal". It is only when the question of the kind or variety of coal would arise that a distinction would be made between coal and charcoal; otherwise, both of them would in ordinary parlance as also in their commercial sense be spoken as coal". 16. The said legal position has been reiterated by this Court in the aforesaid Diebold Systems Private Limited case as under :- "It is also useful to refer to the meaning of the words "machinery" and "machine" given in Webster's Third New Internationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted a particular view, it is not open to the Revisional Authority to substitute his reasoning and interfere with the said orders. In this case, in the light of the aforesaid material, when it cannot be said that it is an electronic goods and the test prescribed by the appellate authority for coming to such conclusion is ex facie illegal, it cannot be said that two views are possible. As set out above, in the series of judgments, what a "machine" is? How it is to be understood is clearly explained. In none of the cases, no such finding of the appellate authority is found. In those circumstances, the finding recorded by the assessing authority is erroneous. It is not the case of two views being possible. Therefore, the Revisional Authority was justified in interfering with the order of the appellate authority and restoring the order of the assessing authority. POINT NO. 2 : 21. The assessing authority after noticing that the assessee has not reported to tax, the said turnover in respect of import of currency counting machines has levied tax @ 2%. Therefore, he was of the view though he has proposed a penalty of Rs. 40,000/- after hearing the assessee, he came to the concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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