2022 (12) TMI 717 - HC - VAT and Sales Tax

Levy of Entry tax - tractor trolly motor vehicle - Section 2 (h) of the Orissa Entry tax Act, 1999 (OET Act) - HELD THAT - It is evident from a comparison of both the definitions that while Section 2(h) of the OET Act adopts the definition of the Motor Vehicle as contained in Section 2(28) of the MV Act, it excludes from that definition any tractor, earth mover, excavator, bulldozer or road-roller . Interestingly, Section 2 (28) of the MV Act includes trailer whereas Section 2(h) of the OET Act does not. Section 2 (28) of the MV Act envisages trailer being attached to the vehicle. There is no exclusion of tractor from the definition of motor vehicle under the MV Act. However, there is such exclusion under Section 2(h) of the OET Act. A trailer attached to a tractor by itself cannot be classified as motor vehicle . It is nobody s case that the trolly has any motor so as to attract such a definition. The Court notes that the impugned order of the Tribunal while noticing Section 2(h) of the OET Act stops short of noticing what was excluded from the definition. The conclusion of the Tribunal that trolly is comprehended in the definition completely misses the point that the trolly cannot exist as a motor vehicle independent of the tractor to which it is supposed to be attached. In fact, the Tribunal notes that under Section 2(46) of the MV Act trailer has been separately defined to mean any vehicle drawn or intended to be drawn by a motor vehicle - As far as the OET Act is concerned, since the tractor itself is excluded from the definition of motor vehicle under Section 2(h) of the OET Act, the question of bringing trolly as a stand-alone vehicle within the purview of that definition does not arise. This Court answers the question framed in the negative i.e. in favour of the Petitioner Assessee and against the Department, sets aside the impugned order of the Tribunal and restores the order of the 1st Appellate Authority - the revision petition is allowed.

Summary

Issues:
Interpretation of the term 'motor vehicle' under the Orissa Entry Tax Act, 1999 (OET Act) for the purpose of entry tax liability on a 'tractor trolly'.

Analysis:
The revision petition by the Assessee stemmed from an order passed by the Orissa Sales Tax Tribunal, which allowed the State's appeal for the tax period under the OET Act. The Assessee, engaged in manufacturing and selling agricultural equipment, faced a tax demand for not discharging entry tax liability on scheduled goods and for selling 'tractor trolly' subjected to entry tax. The Tribunal reversed the order of the first appeal filed by the Assessee, increasing the tax demand. The main question for consideration was whether a 'tractor trolly' qualifies as a 'motor vehicle' under the OET Act.

The definition of 'motor vehicle' under the OET Act adopts the definition from the Motor Vehicles Act, 1988 but excludes 'tractor' from the definition. The Motor Vehicles Act includes 'trailer' in the definition of 'motor vehicle', which is not excluded under the OET Act. The Tribunal, however, interpreted the definition broadly, including 'trolly' as a 'motor vehicle'. The Court disagreed, emphasizing that a 'trolly' cannot exist as a motor vehicle independently of the 'tractor' to which it is attached. Legislative intent indicates that only a 'trailer' intended to be drawn by a motor vehicle falls under the definition of 'motor vehicle'. As the tractor is excluded from the definition under the OET Act, bringing the 'trolly' as a standalone vehicle within the purview of that definition was deemed unnecessary.

In conclusion, the Court ruled in favor of the Assessee, setting aside the Tribunal's order and restoring the first Appellate Authority's decision. The Court's interpretation favored a narrower understanding of the term 'motor vehicle' under the OET Act, excluding 'trolly' from the scope of entry tax liability.