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STATE OF GUJARAT THROUGH COMMISSIONER OF Versus GMM CO. LTD C/O MANIBHAI & BROTHERS ESTATE

2016 (7) TMI 790 - GUJARAT HIGH COURT

Classification of Loader - Rate of VAT - whether loader will fall under expression machinery, thereby falling within Entry No.35 of notification, dealing with machinery used in excavation in works contract and not under Entry No.87 of ScheduleII of the Gujarat Value Added Tax Act, 2003? - Held that:- the equipments involved are in the nature of loader used in execution of works contract and, therefore, would not be part of entry 35. - Decided in favor of assessee. - TAX APPEAL NO. 496 of 2013 - .....

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ssion machinery, thereby falling within Entry No.35 of notification, dealing with machinery used in excavation in works contract and not under Entry No.87 of ScheduleII of the Gujarat Value Added Tax Act, 2003? (B) Whether the Tribunal has erred in not giving an independent finding that, all the items under consideration were actually used for the purpose of execution of works contract as required by Entry 35 of notification issued under section 5(2) of the Gujarat Value Added Tax Act, 2003? 2. .....

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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. Term works contract is explained in explanation clause (ii) which provides that for the purpose of clause (b) expression works .....

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ver 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 the nature of machines. Quite apart from the equipments being used for the purpose of construction related activities, we may us .....

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act 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. Likewise, in the case of Vicas Tractors (supra), Division Bench of this Court considered the question whether a tractor can be consi .....

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e 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 is not dispute. However, in our opinion, this would be of no consequence. Entry 35, we may recall, pertains to machinery includi .....

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tor 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 residuary clause. 12. Quite apart from these features of the case, we may recall, with effect from 15.2.2010, entry 35 now inc .....

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cle 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 construction equipment which was a machinery used for execution of works contract even if it happened to be a vehicle would fall wi .....

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