1992 (5) TMI 184 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to levy of tax on sale of tractor tyres and tubes at rates applicable to "automobile tyres and tubes" under the Orissa Sales Tax Act, 1947.

Analysis:
The judgment concerns the challenge against the levy of tax on tractor tyres and tubes at rates applicable to "automobile tyres and tubes" under the Orissa Sales Tax Act, 1947. The petitioner argued that since tractor tyres and tubes are components of tractors, they should be taxed at the same rate as tractors. The petitioner contended that the specific entry relating to component parts of tractors fixed the same tax rate as tractors from June 1, 1980. The argument was also made that "automobile tyres and tubes" taxed at a higher rate than tractors would not typically include tractor tyres and tubes. The court noted the need for a detailed examination of this issue.

The court analyzed the historical tax entries related to motor vehicles, tractors, their tyres, tubes, spare parts, components, and accessories. It was observed that the term "automobile" was used in the same sense as "motor vehicle" in the tax entries. The court highlighted that motor vehicles and automobiles are generally understood to have the same meaning in common parlance, supporting the interpretation that all tyres and tubes of such vehicles were taxed at the same rate both before and after September 1, 1978.

Further, the court clarified that spare parts and components of tractors were taxed separately from tyres and tubes of tractors. The taxing history indicated that component parts of tractors were considered distinct from tyres and tubes, leading to the separate tax treatment of automobile tyres and tubes from tractor components. The court rejected the argument that tractor tyres and tubes should be taxed as component parts of tractors.

The court delved into the meaning of the term "automobile" based on dictionary definitions. It was concluded that the term "automobile" includes vehicles like tractors that are propelled by an internal-combustion engine using sources of energy such as petrol or diesel. Therefore, tractor tyres and tubes were deemed taxable at 10 percent during the relevant years, and the petitioner's assessment was upheld. Consequently, both writ applications challenging the tax levy were dismissed by the court.