9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1991 (9) TMI 316 - HC - VAT and Sales Tax
Issues:
Whether sewing machines could be subject to entry tax under entry 7 of the Karnataka Tax on Entry of Goods into Local Areas for Consumption Use or Sale Therein Act, 1979. Analysis: The judgment dealt with the issue of whether sewing machines could be considered industrial machinery and thus be subject to entry tax under entry 7 of the Karnataka Tax on Entry of Goods into Local Areas for Consumption Use or Sale Therein Act, 1979. The learned single Judge had previously held that sewing machines do not fit the definition of 'industrial machinery' under entry 7 and, therefore, are not liable to tax under the Act. The Revenue contended that if sewing machines could be used in a garment factory, they should be considered industrial machinery. However, the court emphasized that the nature of the goods at the time of entry alone is material for taxation, not their subsequent use. The court cited precedents to support this view, emphasizing that the use of the machinery is not the dominant factor for taxation. The Act provides for the levy of tax on the entry of scheduled goods into a local area for consumption, use, or sale therein. Scheduled goods are those specified in the Act's Schedule, which includes 'industrial machinery and parts and accessories thereof.' Although sewing machines were not initially included, a clarification issued by the Commissioner directed authorities to levy tax on sewing machines. An explanation was later inserted to define 'industrial machinery' for the purpose of entry 7. The court analyzed whether sewing machines could be considered industrial machinery under this entry and concluded that the use of a sewing machine, whether in a factory or domestically, does not impact its taxability. The court held that sewing machines are not liable to entry tax as industrial machinery under entry 7. Regarding costs, the court found that the matter primarily revolved around interpretation and, therefore, was not a suitable case for the award of costs. The court set aside the judgment relating to costs but upheld the decision on the merits, dismissing the appeal.
|
