2023 (8) TMI 1543 - HC - VAT / Sales Tax

Classification of goods - electric motor - falling in capital goods under entry 27 of Schedule-IV or not - HELD THAT - Considering the fact that the electric motor(s) sold by the respondent-assessee are used only for the purpose of operating the plant and machinery; that the said fact qua the usage of the electric motor(s) is not disputed by the Revenue and that in M/s Gulab Art Handi Craft, Jodhpur, while dealing with the classification of electric motors, the learned Tax Board classified the same to be embracing the term part and accessory of the plant and machinery , it can be conclusively said that owing to their usage, the electric motor(s) sold by the respondent-assessee fell well within the ambit of Entry No. 27 of Schedule IV of the Rajasthan Value Added Tax Act, 2003. As a result, the question of law, is answered in favour of the respondent-assessee and against the petitioner-Revenue. The present Sales Tax Revision/Reference is dismissed.

Summary

Issues: Classification of electric motor(s) under the Rajasthan Value Added Tax Act, 2003.

In the present judgment delivered by the High Court, the Sales Tax Revision involved a dispute regarding the classification of electric motor(s) under the Rajasthan Value Added Tax Act, 2003. The key question was whether electric motors could be considered as capital goods falling under Entry 27 of Schedule IV of the Act. The Revenue contended that electric motors should be taxed under the residuary category as they did not specifically fall under any entry of Schedule IV. On the other hand, the respondent-assessee argued that the electric motors should be classified under Entry 27, citing a previous judgment by the Tax Board. The court analyzed the facts and arguments presented by both sides to reach a decision on the classification issue.

The court noted that the respondent-assessee was operating under the self-assessment scheme and that the electric motors sold ranged from 10 Horse Power to 1000 Horse Power, solely used for operating plant and machinery. The Revenue did not dispute the purpose of usage of the electric motors. Additionally, the court referred to a previous judgment by the Tax Board which classified electric motors under Entry 27 of Schedule IV, considering them as part and accessory of plant and machinery. Since there was no challenge to this judgment, it was deemed final and binding on the Revenue.

Based on the evidence and legal precedents, the court concluded that the electric motors sold by the respondent-assessee fell within the ambit of Entry 27 of Schedule IV of the Act. Therefore, the question of law was answered in favor of the respondent-assessee and against the petitioner-Revenue. Consequently, the Sales Tax Revision was dismissed, and any pending applications were disposed of accordingly.