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2015 (11) TMI 1390 - HC - VAT and Sales TaxRate of tax - Levy of tax on sale of Battery-parts - claim of the assessee was that rate of tax is to be levied treating it to be on the rate applicable on motor-parts - Held that - even if some parts of Battery or Battery-parts can be said to be sold for other purposes but primarily it is meant for motorcars. - general rate would not be applicable as Batery and its parts in common parlance is said to be fitted in motorcars. In the case of Commissioner of Sales Tax, Maharashtra State, Bombay v. Acme Mfg. Co. Ltd. 1990 (3) TMI 327 - BOMBAY HIGH COURT , the questions before the Bombay High Court was whether perkins inlet and exhaust valves sold by the assessee were components of diesel engine or not, and whether particular rate is applicable or not? The Bombay High Court, after analysing the material on record came to the conclusion and opined that the diesel engines of which valves were manufactured by the assessee are component parts used in the manufacture of trucks i.e. a motor-vehicles. - Further decision in the case of Bits & Bites 2011 (3) TMI 1516 - RAJASTHAN HIGH COURT followed. - Decided against Revenue.
Issues:
Challenge to the order of the Rajasthan Tax Board regarding the rate of sales tax applicable to the sale of Battery and its parts for the assessment years 1996-97 and 1997-98. Analysis: 1. The two petitions were filed against the order passed by the Rajasthan Tax Board, Ajmer, regarding the rate of sales tax applicable to the sale of Battery and its parts. The respondent-assessees contended that the rate of tax should be levied treating it to be on the rate applicable on motor-parts, while the Revenue argued for a higher rate. The Dy. Commissioner(Appeals) and the Tax Board upheld the contention of the respondent, leading to the Revenue filing appeals against the orders. However, only two petitions were filed by the Revenue, which were being disposed of as the issues were common. 2. The counsel for the petitioner argued that Battery and its parts should not be considered as motor-parts exclusively, as they are used for diverse purposes beyond motor-vehicles. The counsel contended that the findings of the appellate authorities were perverse and lacked acceptable evidence from the assessee. Despite service, no one appeared on behalf of the respondent. 3. The Court analyzed the arguments presented and perused the impugned order. It upheld the decision of the Tax Board, stating that the Battery and its parts are primarily meant for motorcars, and hence, the general rate applicable to motor-parts should be levied. The Court referred to previous judgments, including the case of Commissioner of Sales Tax, Maharashtra State, Bombay v. Acme Mfg. Co. Ltd., to support its conclusion. 4. Referring to the case law, the Court highlighted that if the goods are primarily used for a specific purpose, such as being installed in a motor-vehicle, the common parlance test should be applied to determine the applicable tax rate. The judgments in cases like Jupiter Battery Works v. Commissioner, Sales Tax, Uttar Pradesh and Vikas Traders v. The State of Gujarat were cited to emphasize the classification of Battery and its parts under the motor-vehicle category for tax purposes. 5. The Court dismissed the petitions, stating that no question of law arose from the impugned order. It emphasized that the findings were based on facts and material on record, without any perversity. The conclusion was drawn based on the common parlance test and the specific use of Battery and its parts in motor-vehicles. By considering the arguments, case law, and factual findings, the Court upheld the decision of the Tax Board, ruling that Battery and its parts are primarily meant for motorcars, justifying the application of the tax rate applicable to motor-parts.
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