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2016 (7) TMI 627 - GUJARAT HIGH COURT

2016 (7) TMI 627 - GUJARAT HIGH COURT - [2016] 95 VST 35 (Guj) - Rate of tax - Classification - nature of machinery used for works contract - motor vehicle - oil cooler for backho loader / oil cooler for wheel loader / oil cooler for soil compactors - scope of entry No.35 of notification issued under section 5(2) of the Gujarat Value Added Tax Act? - various types of oil coolers were principally used in chain mounted equipments and other equipments used for cutting of iron and steel sheets etc. .....

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e hither to included in the term 'machinery' for the purpose of entry no.35, would automatically stand ejected out of such entry. Post 15.2.2010 therefore, the assessee's claim for inclusion of its oil coolers which are used for the purpose of motor vehicle must fail. To that extent the judgement of the Tribunal is reversed. The questions are answered accordingly. Tax appeal is dismissed. - Decided against the revenue. - TAX APPEAL NO. 257 of 2015 - Dated:- 7-7-2016 - MR. AKIL KURESHI AND MR. A. .....

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Tax Act? [B] Whether the Honble Tribunal has erred in holding that oil cooler for wheel loader is covered by entry No.35 of notification issued under section 5(2) of the Gujarat Value Added Tax Act? [C] Whether the Honble Tribunal has erred in holding that oil cooler for soil compactors is covered by entry No.35 of notification issued under section 5(2) of the Gujarat Value Added Tax Act? 2. Briefly stated the facts are that the respondent assessee had filed an application before the competent a .....

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arious types of oil coolers which were principally used in chain mounted equipments and other equipments used for cutting of iron and steel sheets etc. However, the request of assessee was rejected when such oil coolers were being used in loaders which were tyre mounted vehicles required to be registered under the Motor Vehicles Act. In the opinion of the authority, since these were motor vehicles, they would not be included within the expression 'machinery' used for execution of works c .....

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, wherein following observations were made : 9. Having thus heard learned counsel for the parties and having perused documents on record, we may notice that term sale has been defined under section 2(23) of the VAT Act which provides that sale means the sale of goods made within the State for cash or deferred payment or other valuable consideration and includes inter alia in clause (b) transfer of property in goods whether as goods or in some other form involved in execution of a works contract. .....

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ct. Here also, it does not appear to be the case of the Government that the equipments are not in the nature of machines. Whatever doubt one may have with respect to this aspect of the matter would disappear when one peruses the judgment of the Tribunal challenged in the appeal. In such judgment, the Tribunal bestowed detailed consideration to the nature of equipments and its different uses. The appellant had produced extensive materials to establish before the Tribunal that equipments were in t .....

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must exist, namely; a complete and integrated collection of several objects or articles; these objects or articles should interact in unison upon or with each other; this interaction is promoted by application of force which may be manual or motive power; and the movement should be with a view to do some specific activity or to obtain specific or definite result. These observations were based on the Privy Council judgment of Cossipore and Chitpore Municipality reported in AIR 1922 P.C. 27. Likew .....

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ctor is capable of being put. 10. Bearing in mind said principles and considering the nature of construction equipments, we have no hesitation in upholding the Tribunal's view that these were machineries used for the purpose of works contract. 11. The main question therefore, arises is whether these machines being motor vehicles, would be covered by residuary entry. The fact that these vehicles are motor vehicles and were registered or compulsorily registerable under the Motor Vehicles Act i .....

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ipment satisfies description of being a machinery used in execution of works contract, the fact that it also happens to be a motor vehicle, would not change this fundamental feature which would be sufficient to bring the equipment within the purview of entry 35. In absence of any specific entry pertaining to motor vehicle, merely because a certain equipment satisfies description of being a motor vehicle, in addition to being a machinery used in execution of works contract, cannot carry it to the .....

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ther as declaratory or clarificatory, its significance would be that till these words were added in the statute, any motor vehicle which otherwise fulfilled description of being machinery used in execution of works contract, would be covered under entry 35. This amendment in plain terms is neither declaratory nor clarificatory; nor is given retrospective effect either specifically or by necessary implication. This would be one more ground to reinforce our belief that prior to 15.2.2010, any cons .....

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means that were it not for the exception, the specific processed minerals and ores would have been covered by the words minerals and ores, it also indicates that only the minerals and ores subjected to the process of cutting and polishing would be entitled to the benefit of Section 80HHC meaning thereby that all other species of processed minerals and ores would continue to be covered by the general exclusion applicable to the generic class. The 1991 Amendment to Section 80HHC thus conclusively .....

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kind of mineral and was introduced for the first time in 199. If we were to hold that the word minerals in Subsection 2(b) never included processed minerals then the 1991 Amendment excepting processed minerals from the exclusionary effect of the sub section would be rendered meaningless and an exercise in futility. 14. Every statute if prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation [See: Keshavan v. State of Bombay MANU/SC/0020/19 .....

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discussion, the view of the authority that the accessory being used in a motor vehicle would therefore, not fall within entry no.35 cannot stand. However, there is an additional element to this appeal. We may record that by notification dated 15.2.2010, entry no.35 has been amended to include the following addition but excluding the machinery in form of a motor vehicle or attached or mounted to a motor vehicle . With effect from 15.2.2010, therefore, entry 35 would read as under : Machinery inc .....

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