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TMI Blog1977 (9) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under the Local Act, it would be wrong to assessee the sale of fuel injection equipment which are spare parts of diesel engines at a higher rate of 10 per cent. 3. Notification No. S.R.O. 2717 (No. 15th March, 1957 Delhi) dt. 23rd Aug., was issued under s. 8(5) of the Central ST Act, 1956, according to which the Central Government directed that in respect of sales made from the Union Territory on or after the 1st day of July in the course of inter-State trade or commerce by any dealer having his place of business in that Union Territory of any goods to which sub-s. (1) of the said section applies (other than goods specified in the First Schedule to he Bengal Finance (ST) Act, 1941 as applicable to the Union Territory of Delhi, the tax payable under the said sub-s. (1) shall subject to the condition specified be calculated at the rate of half per cent (later amended to one per cent) on the turnover of the dealer. The conditions attached are:— (1) The sale are made to a registered dealer having his place of business outside the Union Territory of Delhi. (2) The sales relate to goods which are proved to the satisfaction of the appropriate ST authority to have been importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale. He added:— "If the article is sold as an article belonging to one category it must be treated as of that category for rate purposes, though it may answer the description of another category also. How the sale was treated by the vendor would thus decide the category. The laws of Sales Tax and assessment thereunder are intended for dealers engaged in the trade. The Court cannot dissociate the meaning which a particular commodity has acquired in the market for the purpose of identifying the commodity for levy of sales tax. The proper rule in such a case will be to give the commodity the particular meaning which the buyer and the seller in the market usually given to it, unless the statutes has taken case to prescribe any special marks of description of identification." 7. In view of the above observation, the learned Assessing Authority proceeded to examine as to how the company was itself treating the various parts sold by Mico Bosch Division. The company's conduct in the past as well as during the year under assessment had been to treat these items as covered by entry I of the First Schedule. As and when they effected the sale to a consumer, the dealer charged tax at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith whom the dealer had been dealing), which not only deals in motor parts, but also deals in various other items like Burshane Gas and electrical goods etc. It is significant to note that the dealer did not state that Allied Motors (P) Ltd. was dealing exclusively in diesel engines. It was also not stated that other motor parts dealers to whom the appellant sold equipments carried on business other than that of motor vehicles parts. It was also not denied that the dealer sells these equipments to various State Roadways Undertakings which run buses for their citizens. 11. The same question had been raised by the dealer during the asst. yrs. 1966-67 and 1967-68 also. The learned Financial Commissioner by his order dt. 31st March, 1975 in Revision No. 574 to 576/73 held that the fuel injection equipment/component sold by the dealer was an item falling under entry I of the First Schedule of the Local Act and taxable at the rate of 10 per cent. The Financial Commissioner exercised the delegated powers of the Lt. Governor and was the highest authority under the ST Act. His decision, is, therefore, entitled to highest respect. That decision should, in my opinion, be followed unless th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as made to the High Court for determination of the following question : "Whether diesel engines under these circumstances are to be regarded as component parts of motor vehicles so as to be covered by item No. 1 of the Notification No. 369/X-923-48 dt. 1st July, 1948 as aforesaid chargeable under s. 3A or whether these diesel engines are unclassified items chargeable under s. 3 of the Act." The High Court started with the emphasis that they were concerned in that case with the particular diesel engines sold by the petitioner diesel engines sold by the petitioner and not concerned with diesel engines which were so constituted or adapted already that they could be used in motor vehicles. Admittedly the diesel engines sold by the petitioner could not be used for driving motor vehicles unless they were charged and converted to such purpose. For that, conversion kits were required. It was with the assistance of conversion kits that they were suitably, converted or adapted for the purpose of driving motor vehicles. Apparently, in their unchnaged or original condition they could not be used for that purpose. The question was whether the diesel engine sold by the petitioner was capab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th case of Kamal Industries (1976 CTR (All) : 1976 39 STC 348 45), it was held by the Allahabad High Court that under the notification issued under s 3-A of the U.P. ST Act, 1948, spare parts of motor vehicles had been split up into two parts—one which are used for purpose other than as parts of motor vehicles viz., those which are used both as spare motor parts and which can be used otherwise as well. The High Court held that in every case it shall have to be affirmatively established by the assessee if he desires not to be covered by the notification that the goods are such that they are also used for purposes other than as parts of motor vehicles. It was further held that where the assessee manufacturing motor parts did not lead any evidence that the spare parts of motor vehicles, the Department would be justified in treating the assessee as manufacturer of spare motor parts and assessing his turnover at the rate of 10 per cent. This decision also does not help the dealer. 19. Taking into consideration all the facts and circumstances of the case, I find no sufficient ground to interfere with the decision of the authorities below. It appears to me that although the dealer had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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