1975 (8) TMI 113 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of entry 44 of Part II of Schedule II to the M.P. General Sales Tax Act, 1958 regarding exemption for agricultural machinery.
2. Determination of the period of limitation for revision proceedings under section 39(2) of the M.P. General Sales Tax Act, 1958.

Interpretation of Entry 44 - Agricultural Machinery Exemption:
The case involved references under section 44(1) of the M.P. General Sales Tax Act, 1958, regarding the classification of tractors as agricultural machinery for exemption under entry 44 of Schedule II. The primary issue was whether tractors sold for agricultural purposes but occasionally used for non-agricultural purposes could be considered agricultural machinery. The Board of Revenue held that tractors sold to non-agriculturists for non-agricultural purposes could not be covered by the exemption. The court noted previous decisions categorizing tractors into farm, industrial, and highway tractors, with only farm tractors considered as agricultural machinery. However, the court emphasized that structurally, tractors do not differ based on purpose but on usage. The court referred the matter to a Full Bench for further examination to determine if tractors as a class fall within the taxable entry or the exempted category based on structural differences or usage.

Period of Limitation for Revision Proceedings:
The second issue addressed the period of limitation for revision proceedings under section 39(2) of the Act. The court referred to a Division Bench decision of the Nagpur High Court, concluding that the period runs from the date of issue of notice by the Commissioner, not the date of service on the assessee. The court upheld this interpretation, stating that the exercise of revisional powers by the Sales Tax Commissioner would be within limitation if the notice is issued within three years from the date of the assessment order. The court dismissed the contention that the relevant date should be the date of service of notice, affirming that the correct view aligns with the Nagpur High Court decision.

In conclusion, the judgment highlighted the need for further examination regarding the classification of tractors as agricultural machinery based on structural differences or usage patterns. Additionally, the court clarified the period of limitation for revision proceedings under the Act, emphasizing that the date of issue of notice by the Commissioner marks the starting point for calculating the limitation period.