2014 (2) TMI 1139 - HC - VAT and Sales Tax

Denial of exemption claim - whether PVC pipes used in pumping sets can be held as accessories of the pumps, if so, whether they are exempted from payment of commercial tax - Held that - In the case of Gaurav Agro Plast Pvt. Ltd. v. Assistant Commissioner of Sales Tax 2001 (7) TMI 1274 - MADHYA PRADESH HIGH COURT , it was held that PVC pipe used in the pumping set cannot be held to be a spare part, but an essential part of the set. - Thus once a finding is recorded that PVC pipe is an essential part of the pumping set, it cannot be said to be an accessory of pumping set. In the circumstances, we find no ground to take a different view than the view, which has been taken by the learned single judge on the basis of the judgment passed by this court in the case of Gaurav Agro Plast Private Limited v. Assistant Commissioner of Sales Tax 2001 (7) TMI 1274 - MADHYA PRADESH HIGH COURT upheld by the Division Bench - Decided against assessee.

Summary

Issues:
Interpretation of tax exemption for PVC pipes used in pumping sets.

Analysis:
The appellant challenged an order regarding the tax exemption on PVC pipes used in pumping sets. The main issue was whether PVC pipes can be considered accessories of pump sets and thus exempt from commercial tax. The commercial tax authorities contended that PVC pipes are not accessories of pump sets, leading to the filing of a writ petition.

The learned single judge, referencing the case law of Gaurav Agro Plast Pvt. Ltd., held that PVC pipes are essential parts of pumping sets, not spare parts. This interpretation was upheld by a Division Bench in a subsequent case, confirming that PVC pipes are integral components of pumping sets and not mere accessories. Therefore, the court found no reason to deviate from the established legal position and dismissed the writ petition.

Upon reviewing the arguments presented by both parties, the court reiterated the precedent set in previous cases, emphasizing that PVC pipes are essential components of pumping sets and not accessories. Consequently, the court upheld the decision of the learned single judge and dismissed the intra court appeal, affirming that PVC pipes used in pumping sets are not exempt from commercial tax.