1977 (1) TMI 139 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of statutory provisions regarding classification of goods for sales tax purposes.

Analysis:
The judgment by the Bombay High Court pertains to a reference under section 61(1) of the Bombay Sales Tax Act, 1959. The issue at hand was whether an electric powered fork-lift truck sold by the respondent should be classified under entry 22 of Schedule E or entry 58 of Schedule C to the said Act. The respondent contended that the fork-lift truck fell under the residuary entry, entry 22 of Schedule E, while the Commissioner of Sales Tax classified it under entry 58 of Schedule C. The Sales Tax Tribunal held that the fork-lift truck did not fall within entry 58 of Schedule C, which pertains to vehicles meant for long-distance transport, and concluded that it should be classified under the residuary entry 22 of Schedule E. The Court was tasked with determining the correctness of this conclusion.

Upon analyzing the relevant provisions of entry 58 of Schedule C, the Court considered whether the fork-lift truck could be deemed a motor vehicle as per the statutory definition. The Tribunal highlighted that the fork-lift truck primarily focused on stacking goods within limited premises, unlike traditional motor vehicles designed for long-distance transportation. The Court concurred with the Tribunal's reasoning, emphasizing that the primary purpose of a motor vehicle is to transport goods or persons over significant distances, which differs from the function of a fork-lift truck aimed at vertical movement for stacking. Drawing parallels to a previous case involving a gasoline-operated crane, the Court determined that the fork-lift truck did not meet the criteria to be classified under entry 58 of Schedule C.

Ultimately, the Court held that the fork-lift truck did not fall within entry 58 of Schedule C and should be classified under the residuary entry 22 of Schedule E. The judgment favored the respondent, directing the applicant to bear the costs of the reference. The reference was answered in the affirmative, affirming the classification of the electric powered fork-lift truck under entry 22 of Schedule E.