1. Heard Sri Bharat Ji Agarwal, Senior Advocate, assisted by Sri Piyush Agarwal, Advocate for revisionist and learned Standing Counsel for the respondent.
2. This Trade Tax Revision under Section 11 of U.P. Trade Tax Act, 1948 (hereinafter referred to as "Act, 1948") has been preferred being aggrieved by the judgment dated 15.10.2004 passed by Trade Tax Tribunal, Bench-I, Agra, holding that Gutkha product, manufactured and sold by revisionist-assessee under the brand name "Gold Mohar Gutkha" is taxable as unclassified goods @ 10% in view of State Government Notification no.1947 dated 26.6.1997. The revisionist is also aggrieved by the view taken by Revenue that sale of generator, which was in working/running condition, was taxable @ 8% and not 5%.
3. The assessment year in dispute is 2001-2002. The dealer disclosed its taxable turn over of Rs.1,22,37,495.20 and admitted tax liability of Rs.12,13,795/-. The maintenance of accounts was not found irregular and, therefore, figures of sale, purchase and turn over, disclosed by revisionist-assessee, were believed by Assessing Authority. However, he found that dealer has disclosed sale of 'Gutkha' worth Rs.22,18,58,748.32 but no tax liability thereon was admitted. It was said that tax on sale of 'Gutkha' from 01.9.2001 to 31.3.2002 was abolished and for the period 1.4.2001 to 3.8.2011, in view of judgment of Supreme Court in M/s Kothari Products Ltd. Vs. Government of Andhra Pradesh, 2000 STC (119) 553, no trade tax was leviable since it is liable for additional excise duty under Central Excise Tariff Act @ 18%. The total sale of Gutkha for entire assessment year was Rs.22,18,58,748.32, out of that, sale during the period 1.4.2001 to 31.8.2001 was Rs.8,64,71,820.50. The Assessing Authority held that sale of 'Gutkha' during the period 1.4.2001 to 31.8.2001, was taxable as unclassified item i.e. 10% and therefore, dealer was liable to pay tax on sale of 'Gutkha' during aforesaid period to Rs.86,47,182/-. Similarly on sale of old generator, he impound tax at the rate of 10% which came to Rs.16,500/- and accordingly passed order dated 28.02.2004. There are some other items also with which this matter has no concerned.
4. Disputing imposition of tax on sale of 'Gutkha' and old generator, revisionist-assessee preferred appeal No.122 of 2004. The Joint Commissioner (Appeal)-4, Trade Tax, Agra upheld the view taken by Assessing Authority that 10% tax was leviable on sale of 'Gutkha' treating it as 'unclassified item'. However, in respect of tax liability on sale of generator, appellate authority held that instead of treating it as unclassified item, it was taxable in the category of machinery and therefore, 8% tax is leviable. Accordingly, it granted relief to the extent of 2% in tax rate on the sale of generator. In the total disputed tax liability, relief of Rs.3,300/- was given to assessee. Dissatisfied with this judgment, assessee took up the matter to Tribunal in Second Appeal No.473/2004 but here also lost as Tribunal has rejected appeal vide judgment dated 15.10.2004 giving rise to the present revision.
5. The questions of law, which have arisen in this revision are:
A. Whether in view of the decision of Supreme Court in Kothari Products Ltd. Vs. Government of Andhra Pradesh 2000 STC (119) 553, 'Gutkha' being covered under Central Excise Tariff Item No. 2404.11 and 2404.12, hence a declared goods, under Section 14(ix) of the Central Sales Tax Act, and, it cannot be subjected to tax as an 'unclassified item'?
B. Whether no notification having been issued in respect of declared goods, namely, 'Gutkha', falling under Section 14(ix) of Central Sales Tax Act, hence in view of decision of Hon'ble Supreme Court in Commissioner of Sales Tax, U.P. Vs. Agra Belting Works, 2001 (121) STC 396, no tax was payable by the applicant?
C. Whether in view of the facts and circumstances of the case, the Trade Tax Tribunal was justified in imposing tax on the sale of 'Gutkha' @ 10%?
D. Whether the Trade Tax Tribunal was justified in imposing tax on the sale of 'Generator' in running condition treating it as 'old discarded and unserviceable machinery'?
E. Whether Trade Tax Tribunal was justified in imposing tax at the rate of 8% on the sale of 'Generator'?
6. Questions A, B and C can be considered together since they relate to taxability of 'Gutkha'.
7. Before dealing in detail of the matter, it would be appropriate to know, what 'Gutkha' is? Though, on record, nothing has been said about it, but learned counsel explain that it is a 'Pan Masala' which also contain 'tobacco'. To distinguish it from 'Pan Masala', which has no element of tobacco, when tobacco is added, it is commonly known as 'Gutka/Gutkha'. In general, Gutka is a dry mixture of crushed areca nut, tobacco, catechu, lime (calcium hydroxide), aromas and flavourings as well as other additives.
8. During course of argument it was sought to be argued that 'Gudaku', 'Gutka' and 'Gutkha' are all one and the same thing and for this purpose, my attention was drawn to first paragraph of judgment in M/s Kothari Products Ltd. (supra), where the Court has said as under:
"The appeal is filed against the judgment and order of a Full Bench of the High Court at Andhra Pradesh. The appeal in this Court is restricted to the product "gutka" (gudaku).
(emphasis added)
9. In my view, this impression, as given by learned senior counsel Sri Agarwal is not correct. The term 'gudaku and 'gutka' does not appear to be one and the same. Be that as it may, in the case of Andhra Pradesh, entry in the provincial statute was "pan masala including gutkha". The Court then referred to entries in Chapter 2404 of Additional Duties of Excise (Goods of Special Importance) Act, 1957, wherein the words "other manufactured tobacco" also include word "gudaku" and it was found that 'gutka' is a tobacco and was referred as 'gudaku' in that entry. The term 'gudaku' and 'gutka', were held synonymous since the contents thereof were found same. But it is not correct for all times to come. The reason being that there is a term 'gudakhu', which came to be considered before Apex Court in State of Orissa Vs. Radheshyam Gudakhu Factory, 1987 UPTC 1480. The Court has noticed findings of High Court there to the effect that 'gudakhu' was a form of smoking tobacco and it is also used as a paste for cleansing the gums of the teeth. The Court also refers to Calcutta High Court decision in Gulabchand Harekchand Vs. State of West Bengal, (1985) 59 STC 224, it was held that "gudakhu" is manufactured out of tobacco and that its essential character is that of a tobacco product even though molasses and other constituents are added to the tobacco and that it is commonly used for cleansing the teeth.
10. The mere fact that in first paragraph in judgment the term "gutka" has been shown in bracket as (gudaku), it cannot be said that the term "gudakhu" or "gudaku" would always be the same thing as "gutka". Moreso, that was not a dispute as such, up for consideration, before Apex Court. Therefore, it cannot be said that every observation or mention of a fact is a binding law upon this Court. When this Court is concerned with entries of various statutes, it cannot be said that were similarity in the name would mean that the items are also same. It would depend on the constituents. Different entries at different times have been considered and unless it can be shown that entries of all the times were same and have been specifically considered on this issue, it would be dangerous to blindly follow a decision given in respect to a particular entry, when entries in the statutes may be different. Particularly when a matter relates to fiscal statute, which normally go under change very frequently, the Court has to extra careful.
11. Now I come to real issue. The State Government issued a notification dated 31.1.1985 exempting certain goods from tax under Act, 1948 w.e.f. 1.2.1985. The said notification no.ST-II-7038/X-7(23)/83-UP Act XV/48-Order-85 dated 31.1.1985, contains an entry relevant for the purpose of present case at serial no.14, which reads as under:
"In exercise of the powers under clause (a) of section 4 of the Uttar Pradesh Sales Tax Act, 1948 (UP Act No.XV of 1948), read with section 21 of the Uttar Pradesh General Clauses Act, 1904 (UP Act No.1 of 1904) and in supersession of all previous notifications issued under aforesaid clause (a) of section 4, the Governor is pleased to exempt, with effect from February 1, 1985, the goods mentioned in column 2 of Schedule hereunder from payment of tax under the said Act of 1948, subject to the conditions, if any, specified in column 3 thereof :
S.No.
Description of goods Conditions 14 Cigars, Cigarettes, biris (both machine-made and hand-made) and tobacco in any form, whether cured or uncured and whether manufactured or not, including the leaf, stalk and stems of the tobacco plant and all products of tobacco, but including any part of a tobacco plant while still attached to earth.
12. By notification no. Ka.San.Vi.-2-1947/Gyarah-9(7)/97-U.P.Adhi.-15-48-Adesh-97 dated 26.6.1997, which was published in gazette on 1.7.1997, the aforesaid entry 14 was substituted as under:
d0la0fo&2&[email protected];kjg&9 ¼7½ @96&m0iz0 vf/k0&15&48&vkns'k&97 y[kuÅ % fnukad % 26 twu] 1997 ¼ Gazette dt. 1.7.1997 ½ mRrj izns'k lk/kkj.k [k.M vf/kfu;e] 1904 ¼mRrj izns'k vf/kfu;e la[;k 1 lu~ 1904½ dh /kkjk 21 ds lkFk ifBr mRrj izns'k O;kikj dj ,sDV] 1948 ¼mRrj izns'k ,sDV la[;k 15 lu~ 1948½ dh /kkjk 4&d ds v/khu vf/kdkjksa dk iz;ksx djds] jkT;iky foKfIr ds xtV esa izdkf'kr gksus ds fn0 ls le;≤ ij ;Fkkla'kksf/kr ljdkjh foKfIr la[;k&,l0Vh0 &2&[email protected]&7 ¼23½@83&m0iz0 vf/k0&15&48&vkns'k&85] fnukad 31 tuojh] 1985 ¼ SN04 ½ esa fuEufyf[kr la'kks/ku djrs gSa%& la'kks/ku mi;qZDr foKfIr dh vuqlwph esa] dze la[;k 14 dh izfof"V ds LFkku ij fuEufyf[kr izfof"V LrEHkokj j[k nh tk;sxh] vFkkZr dze la[;k Ekky dk fooj.k 'krsZa 14 flxkj] flxjsV] chMh ¼e'khu dh cuh vkSj gkFk dh cuh nksuks½] vkSj fdlh Hkh :i esa rEckdw] pkgs lalkf/kr ;k vlalkf/kr gks vkSj pkgs fufeZr dh xbZ gks ;k ugha] ftlds vUrxZr rEckdw ds ikS/ks dh iRrh] MUBy vkSj vxzHkkx gS] vkSj rEckdw ds lHkh mRikn] fdUrq blds vUrxZr tnkZ;qDr iku elkyk] tks fdlh uke ls tkuk tk;] rEckdw ds ikS/ks dk dksbZ ,slk Hkkx gS] tcfd og Hkwfe ij [kM+k gks] ugha gSA
13. It excluded, therefore, specifically "tobacco containing Pan Masala", with whatever name it is known.
14. Another amendment was made by notification no.T.I.F.-2-595/XI-9(4)/99-U.P. Act-15-48-Order-98 dated 6.4.1999 published in Gazette dated 10.4.1999 and entry 14 was substituted as under:
"In exercise of the powers under clause (a) of section 4 of the Uttar Pradesh Sales Tax Act, 1948 (UP Act No.XV of 1948), read with section 21 of the Uttar Pradesh General Clauses Act, 1904 (UP Act No.1 of 1904), the Governor is pleased to make, with effect from the date of publication of this notification in Gazette, the following amendment in Government Notification No. ST-II-7038/X-7 (23/83-U.P. Act-XV-48-Order-85, dated January 31, 1985 (Sno. 4) as amended from time to time :
Amendment In the Schedule to the aforesaid notification for entries at serial numbers 14, 27, 52 and 53, the following entries columnwise shall be substituted, namely:
Serial Number Description of goods Conditions 14 Cigars, Cigarettes, biris (both machine-made and hand-made), tobacco in any form whether cured or uncured and whether manufactured or not, including the leaf, stalk and stems of the tobacco plant and all products of tobacco excluding pan masala containing tobacco by whatever name called, any part of tobacco plant while still attached to earth and also excluding, such Cigars, Cigarettes, tobacco and its products as are imported from outside India.
15. For our purpose, it is sufficient to notice that "Pan Masala containing tobacco" by whatever name called, continued to be excluded from the term "all products of tobacco" vide notification dated 10.4.1999. Meaning thereby, exemption specifically withdrawn in respect to "pan masala containing tobacco", by whatever name called, by notification dated 26.6.1997, continued even after issuance of notification dated 6.4.1999.
16. In view of above notifications, it can be little doubted that in assessment year 2001-02, product of revisionist assessee was taxable. Since it was not otherwise covered by any specific entry, it could have been taxed by treating it as 'unclassified goods'.
17. Then comes the effect of provisions of Central Excise Tariff Act, 1985 (hereinafter referred to as "CET Act, 1985"). This Act came into force on 28.2.1986 by notification issued under Section 1(3) thereof. Section 2 of CET Act, 1985 provides:
"Duties specified in the Schedule and the Second Schedule to be levied- The rates at which duties of excise shall be levied under the Central Excise Act, 1944 are specified in the First Schedule and the Second Schedule." (emphasis added)
18. It is worthy to mention that earlier, only the word "the Schedule" was mentioned in Section 2, which has now been substituted by the word "First Schedule and Second Schedule" by Finance Act, 27 of 1999, Section 134 w.e.f. 11.5.1999. The First Schedule of CET Act, 1985, Chapter 24, deals with "Tobacco and Manufactured Tobacco Substitutes". This Chapter 24 has four headings 24.01 to 24.04. These headings as substituted by Finance Act, 33 of 1996 vide Section 82, Third Schedule, Part II, and came on the statute-book, read as under:
Heading No. Sub-heading No. Description of goods 24.01 24.02 24.03 24.04 2401.10 2401.90 2402.00 2403.11 2403.12 2403.13 2403.14 2403.15 2403.19 2403.20 2403.31 2403.32 2404.10 2404.20 2404.31 2404.39 2404.41 2404.49 2404.50 2404.91 2404.99 UNMANUFACTURED TOBACCO; TOBACCO REFUSE
- Not bearing a brand name
-Other CIGARS AND CHEROOTS OF TOBACCO OR OF TOBACCO SUBSTITUTES CIGARETTES AND CIGARILLOS OF TOBACCO OR OF TOBACCO SUBSTITUTES
- Cigarettes of tobacco :
- Other than filter cigarettes, of length not exceeding 60 millimetres
- Other than filter cigarettes, of length exceeding 60 millimetres but not exceeding 70 millimetres
- Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) not exceeding 70 millimetres
- Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 70 millimetres but not exceeding 75 millimetres
- Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 70 millimetres but not exceeding 85 millimetres
- Other
- Cigarettes of tobacco substitutes
- Cigarillos :
- Of tobacco
- Of tobacco substitutes OTHER MANUFACTURED TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES; HOMOGENISED OR 'RECONSTITUTES' TOBACCO; TOBACCO EXTRACTS AND ESSENCES
- Smoking mixtures for pipes and cigarettes
- Cut tobacco
-Biris :
- Other than paper rolled biris, manufactured without the aid of machines
- Other Chewing tobacco and preparations containing chewing tobacco; pan masala containing tobacco :
Chewing tobacco and preparations containing chewing tobacco Pan masala containing tobacco
- Snuff of tobacco and preparations containing snuff of tobacco in any proportion Other :
- Not bearing a brand name
- Other (emphasis added) (The Court is excluding rate of duty, mentioned in Column (4) since that is not relevant for the present purpose.)
19. It is worthy to notice at this stage that entries after sub-heading 2404.39, rest have been substituted/inserted for the sub-heading 2404.40 by Finance Act 14 of 2001 and the entry 'Pan Masala containing tobacco' has been inserted for the first time by aforesaid Act w.e.f. 11th May, 2001.
20. At this stage, this Court is not concerned with rate of excise duty imposed on the aforesaid items. If any of the items under heading no.2404 is bearing a brand name, it would also be governed by sub heading no.2404.99. It may not be disputed that product of assessee, in the case in hand, may be covered by entry 2404 under CET Act, 1985 but in order to claim that only by virtue thereof such item would not be subjected to tax under provincial trade tax statute, there has to be some provision in the provincial statute.
21. Sri Bharatji Agarwal, learned counsel for the assessee, however, relied on Apex Court's decision in Kothari Products Ltd. Vs. Government of Andhra Pradesh (2000)9 SCC 263, which deals with provisions contained in Andhra Pradesh General Sales Tax Act, 1957 and in particular, Entry 194 in the first Schedule thereof.
22. I have gone through the aforesaid judgment carefully and finds that in Section 8 of Andhra Pradesh General Sales Tax Act, 1957, there was a provision that a dealer, who deals in the goods specified in the Fourth Schedule thereto, shall be exempt from tax thereunder in respect of such goods. Therefore, all the goods, which were specified in Fourth Schedule of the Andhra Pradesh State statute, levying tax on sales of goods in the State of Andhra Pradesh, were exempted from tax by virtue of a specific provision contained in that statute i.e. Section 8 of Andhra Pradesh General Sales Tax Act. There was an entry no.7 in Fourth Schedule of Andhra Pradesh statute, which mention the word "tobacco". There was an explanation also therein, which says that goods mentioned in Entry 7 "shall be goods included in the relevant heads and sub-heads of the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957, but does not include goods where no additional duties of excise are levied under that Schedule". The Court found that Additional Duties of Excise (Goods of Special Importance) Act, 1957, in Entry 2404, under sub-heading "other manufactured tobacco" refers to "gudaku" and was an entry contained therein. It is in this view of specific provision, contained in Andhra Pradesh Act, that, the Court held that Gutka (Gudaku) being an entry under first schedule to Additional Duties of Excise (Goods of Special Importance) Act, 1957, therefore, is exempted from tax under Andhra Pradesh General Sales Tax Act, 1957.
23. The assessment period of dispute in Andhra case is not clear from the judgment. No corresponding provision in Act, 1948 has been shown in the present case. Earlier notification of 1985, obviously, was much wider and included tobacco products like Gutka, Pan Masala containing tobacco. This was exempted by virtue Section 4(1) itself and by not with reference to any statute like Central Excise Act etc. The mere fact that something has been included in CET Act, 1985, that would stand exempted from tax is not correct unless specific provision is contained in the provincial statute.
24. Now, it is to be seen whether there is any provision under Central Sales Tax Act, 1956 (hereinafter referred to as "CST, 1956"), read with Act, 1948 which may come to rescue the assessee.
25. Section 14 of CST Act, 1956 contains declaration of certain goods of special importance in inter-State Trade or Commerce. There was an entry (ix), which has now been omitted by Taxation Laws (Amendment) Act, 2007 (Act No. 16 of 2007), w.e.f. 1.4.2007, but since it existed during the relevant assessment year in question, i.e. 2001-02, it would be appropriate to reproduce relevant extract of Section 14 along with item (ix), as it was at the relevant time, hereunder:
"Section 14 - Certain goods to be of special importance in inter-State trade or commerce- It is hereby declared that the following goods are of special importance in inter-State trade or commerce:--
(ix) unmanufactured tobacco and tobacco refuse covered under sub-heading No. 2401.00, cigars and cheroots of tobacco covered under heading No. 24.02, cigarettes and cigarillos of tobacco covered under sub-heading Nos. 2403.11 and 2403.21 and other manufactured tobacco covered under sub-heading Nos. 2404.11, 2404.12, 2404.13, 2404.19, 2404.21, 2404.29, 2404.31, 2404.39, 2404.41, 2404.50 and 2404.60 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)"
26. It is worthy to mention that Section 14(ix) does not mention sub-heading number 2404.49. Even erstwhile sub-heading 2404.40 is not mentioned in Section 14(ix). Similarly, entry 2404.99 is also not mentioned in Section 14(ix).
27. Section 15(a) of CST Act, 1956 provides that Sales Tax Law of State shall not impose tax on sale and purchase of declared goods exceeding 5%. Section 15 of CST Act, 1956, as it stood during relevant period of assessment, reads as under:
"Restrictions and conditions in regard to tax on sales or purchases of declared goods within a State- Every sales tax law of a State shall, insofar as it imposes or authorises the imposition of a tax on the sale or purchase of a tax on the sale or purchase of declared goods, be subject to the following Restrictions and conditions, namely:-
(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed 8[five per cent.] of the sale or purchase price thereof and such tax shall not be levied at more than one stage,"
28. Learned counsel for the revisionist has tried to rely on decision of Apex Court in Kothari Products Ltd. (supra), but it is evident that entries of statute, as were up for consideration therein are not the same, as would be applicable in the case in hand. Since period of assessment in dispute is 2001-02, therefore, this Court has to look into various entries, as existed in various statutes at the time for which dispute is up for consideration and not to earlier entries, which are of no relevance at all.
29. Under Section 14(ix), heading and sub-heading of CET Act, 1985, which relates to Pan Masala containg tobacco and any other, which could have been relevant in the case in hand, are not shown to be a declared goods of special importance. The tobacco and its other products, covered under specific sub-headings are mentioned specifically in Section 14(ix). The sub-headings, as were available in the assessment year 2001-02 did not include sub-heading, which could have applied to 'Pan Masala containing tobacco', whether with a brand name or otherwise. That be so, it cannot be held to be a declared goods and therefore, restriction of rate of tax by virtue of Section 15 would also not come into picture. In view thereof, it cannot be said that product of assessee, in the case in hand, is exempted from tax altogether or taxable with lessor rate of tax under the provisions of CET Act, 1985 read with CST Act, 1956. There is not even otherwise any notification available under Act, 1948 to come to the rescue of assessee for claiming exemption from tax on its above product in the disputed period.
30. In the result, I have no hesitation in holding that tax imposed upon sale of Gutkha in the case in hand treating it to be 'unclassified item' and imposing tax at the rate of 10% is absolutely valid and correct. Questions A, B & C are accordingly answered in favour of Revenue and against assessee.
31. Coming to questions D and E, it is evident from record that used generator was sold but that was not in "discarded and unserviceable condition". It also cannot be said to be "obsolete" since it was in running condition. But if it is an old machinery even then it is covered by item 29 of notification no.KA.NI.-2-101/XI-9(231)/94-U.P.Act-15-48-Order-2000 dated 15.1.2000, which reads as under:
"In exercise of the powers under clause (e) of sub-section (1) of section 3-A of the Uttar Pradesh Trade Tax Act, 1948 (UP Act No.XV of 1948), read with section 21 of the Uttar Pradesh General Clauses Act, 1904 (UP Act No.1 of 1904) and in supersession of all previous notifications issued in this behalf, the Governor is pleased to declare that, with effect from January 17, 2000, the turnover in respect of the goods mentioned in column 2 of the List below shall be liable to tax at the point of sale specified in column 3 of said List at the rate specified against each in column 4 thereof:
Serial Number Description of goods Points of tax Rate of tax percentage 29 Old, discarded, unserviceable or obsolete machinery, stores or vehicles including waste products, except cinder, coal ash and such items as are included in any other notification issued under the Act.
Sale to consumer 8%
32. It would also be brought on record that item 29 of notification dated 15.01.2000 has been amended by substitution w.e.f. 17.2.2000 vide notification no. KA.NI.-2-523/XI-9(231)/94-U.P.Act-15-48-Order-2000 dated 17.2.2000, published in Gazette dated 18.2.2000 and amended provision reads as under:
"WHEREAS, the State Government is satisfied that it is necessary so to do in public interest:
NOW, THEREFORE, in exercise of the powers under clause (e) of sub-section (1) of section 3-A read with section 25 of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No.15 of 1948), and section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904), the Governor is pleased to make, with effect from January 17, 2000, the following amendment in Government Notification No. KA.NI.-2-101/XI-9(231)/94-U.P.Act-15-48-Order-2000, dated January 15, 2000 [Sno 427], as amended from time to time :
AMENDMENT In the List to the aforesaid notification,-
(1) the entries at serial number 69, 72, 73 and 74 shall be omitted ;
(2) for entries at serial number 17, 23(i), 24, 29, 31(ii), 34, 39(i), 44, 53, 59, 60 and 64 the following entries respectively shall, column wise be substituted, namely :-
Serial Number Description of goods Points of tax Rate of tax percentage 29 Old, discarded, unserviceable or obsolete machinery, stores or vehicles including waste products, except cinder, coal ash and such items as are included in any other notification issued under the Act.
Sale to consumer 5%
33. The cumulative reading of both the notifications would show that notification dated 15.1.2000 was given effect from 17.1.2000 and therefore, amendment made by notification dated 17.2.2000 is from the same date. In the contents of item no.29, column 2, virtually there is no difference but real difference lies in the rate mentioned in column 4, which instead of 8% has been made 5%.
34. It is contended that words "discarded, unserviceable, obsolete" should be read ejusdem generis with the word "old" so as to apply aforesaid notification to such machineries which are virtually unusable, unworkable or unfunctional. However, I do not find any reason to read all these terms ejusdem generis since all these terms have a distinct meaning. Moreover, use of the word "or" between "unserviceable" and "obsolete" clearly shows intention of State that all these words have been used to cover different situations. If an old machinery is sold even if it is in running and usable condition, in my view, it would be covered by entry 29. Therefore, question D is answered in favour of Revenue by holding that sale of generator is covered by entry 29 of notification dated 15.1.2000 as amended by notification dated 17.02.2000 w.e.f. 17.1.2000 but question no.E is answered in favour of assessee by holding that rate of tax would be only 5% and not 8%.
35. In the result, the revision is partly allowed and the impugned order dated 15.10.2004 passed by Tribunal shall stand modified accordingly.
36. A copy of this order should be sent to the Tribunal forthwith so as to enable it to pass consequential order in the light of answer given herein on the questions formulated above.
37. There shall be no order as to costs.
Order Date :- 25.4.2014 KA