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TMI Blog1993 (7) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the contention of the assessee that the vehicle sold by the assessee was not to be taxed again, because tax had been paid on the chassis frame-cum-engine when it was purchased on June 20, 1980, under the aforesaid entry 70. This order of the assessing authority was revised by the Deputy Commissioner, who held that the earlier purchase by the assessee was a "chassis" and it became motor vehicle only after body was built by the assessee. This order was upheld by the Karnataka Appellate Tribunal. Hence the assessee has come up in revision. In the three writ petitions filed by another assessee also an identical question arises. A clarification issued by the Commissioner on August 8, 1989, is under challenge in these writ petitions. In the said clarification, the Commissioner has stated that the truck plus chassis-frame, without the platform or the body built on the chassis-frame, is liable to be taxed under entry 71 of the Second Schedule and if the body is built subsequently thereon, it becomes motor vehicle and then when the said motor vehicle is sold, entry 70 would be attracted. This entry 70, has now become item 13 of Part M to the new Second Schedule to the Act, with effect fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 31, 1986, rate was 15 per cent. Under entry 71, for the period April 1, 1974 to March 31, 1983, rate was 15 per cent and thereafter during April 1, 1983 to March 31, 1986 it was 12 per cent, subsequently this rate under entry 71 was reduced to 4 per cent. The fact remains that during April 1, 1974 to March 31, 1983 rate of tax was the same under both the entries 70 and 71. Entire Second Schedule was recast and a new Second Schedule was substituted from April 1, 1988. The goods were alphabetically arranged, by dividing the said Schedule into several parts. Part "M " covers goods of the description starting with the letter "M". Part M, serial No. 13 covers motor vehicles; it has sub-items (i) to (vii). Serial No. 14 covers motor vehicles parts and accessories; it has sub-items (i) to (iii). "Chassis of motor vehicles" is in item 14(ii) of Part M. While serial No. 13(i) to (vii) refer to specific items of motor vehicles, sub-item (vii), ropes in "any other motor vehicle not covered by items above". The question is whether TPC frame is a motor vehicle, or is only a chassis. If it is a chassis, then, the Revenue is justified in demanding a tax under entry 70 on the sale of the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1968] 22 STC 414 (All.), the question was: whether the body of the motor vehicle is a component part of it? In that connection, the Bench observed as follows, at page 415: "..........To decide that question it is necessary to determine first what is a motor vehicle. A motor vehicle is a carriage propelled by a motor. It is a vehicle intended ordinarily for conveying passengers or goods. Now, a component part of an article is one of the parts constituting it. It is an integral part necessary to the constitution of the whole article. Without it, it would not be possible to conceive of the entire article as a whole. Can it be said that the body of a motor vehicle is a necessary part of the motor vehicle? Learned counsel for the respondent seeks to persuade us that the motor vehicle is a complete unit when it consists of a motor and chassis on wheels and that the body mounted on the chassis is not a necessary part of the motor vehicle. We are unable to accept the contention. To function as a conveyance, the motor vehicle must be capable of accommodating the passengers or carrying the goods intended to be conveyed. If it functions as a stage carriage, it must have a body designed to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch also pointed out that there is no absolute principle of law that the meaning given in one statute to a word cannot be relied upon while construing another legislation. The decision of the Supreme Court in Porritts Spencer (Asia) Ltd. v. State of Haryana [1978] 42 STC 433 reiterates the principle that in a taxing statute words of everyday use must be construed not in their scientific or technical sense, but as understood in common parlance. In other words, the sense which people, conversant with the subject-matter with which a statute is dealing, would attribute to the subject, should have to be accepted as the true meaning. At page 437, the court also pointed out that the use to which the subjectmatter may be put is immaterial. The said decision was considering whether "dryer felts" was a textile? It is unnecessary to multiply the citations, because, the relevant principle has been stated in Porritts' case [1978] 42 STC 433 (SC) which has been reiterated in other subsequent decisions. The problem if at all is the problem of applying the principle to the particular set of facts. Shenbaga Nadar and P.V.P. Balasubramania Nadar v. State of Madras [1973] 31 STC 81 (Mad.) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nea expositio. Hence, it is unnecessary to refer to the several decisions cited in connection with the said doctrine. A few decisions were cited to show that dictionaries cannot dictate always the meaning to be given to the words and the meaning of the word should be understood having regard to the context of the particular legislation or the context in which the particular words are used. There can be no two opinion about this proposition. A decision of this High Court in Sri Veerarajendra. Corporation v. State of Karnataka [1985] 58 STC 199 was cited to contend that assessment orders accepted as correct for several years, should not be allowed to be interfered with. In the instant cases before us, the assessment orders are sought to be revised within the period of limitation and there is no scope to apply the aforesaid principle. The learned counsel for the assessees referred to a few more dictionaries including a different edition of Websters Dictionary. But in the circumstances of this case, we do not think it necessary to burden this judgment by referring to them. The meaning of a term used in the sales tax law, describing the subject of the levy, is to be, understood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the Schedule because the Legislature thought it fit to levy tax on the "hire charges" of certain goods, which are normally leased out; when "chassis-frame" is not a subject of lease, item 2 could not have been thought of describing the said non-leased article. Entry 71 of the old Second Schedule mentions "chassis of motor vehicles" while entry 71-A refers to "bodies built on motor vehicle chassis". Bodies are not built on the mere chassis-frames; body is built only on TPC frame. If the said article is already a motor vehicle, Legislature would have referred to "bodies built on a motor vehicle" in entry 71-A. Entry 73 of this Schedule refers to "articles used generally as parts and accessories of motor vehicles". A chassisframe by itself will be a part of the motor vehicle. Argument based on the expansive language of entry 70, does not advance a conclusive test. It is true that entry 70 mentions-"motor vehicles including motor cars, motor taxi cabs, motor cycles and cycle combinations, motor scooters, motorettes, motor omnibuses, motor vans and motor lorries". Here expansive phraseology adopted by using the word "including" in entry 70 was an unnecessary exercise; because, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticular use to which an article can be applied in the hands of a special consumer is not determinative of the nature of goods"-vide: Mukesh Kumar Aggarwal Co. v. State of Madhya Pradesh [1988] 68 STC 324 (SC) at 329; AIR 1988 SC 563 at 566. In the said case of Mukeshkumar Aggarwal Co. [1988] 68 STC 324 (SC); AIR 1988 SC 563 the Supreme Court pointed out the distinction between "timber" as understood in its popular sense and distinguished it from "wood-heaps", because, "timber" is meant or is to be fit for building purposes, though earlier, at one stage, the court pointed out that the " 'user test' is logical; but is again inconclusive". Having regard to the entries in several Schedules to the Act we are of the view that the term "chassis of motor vehicle" has to be understood so as to include TPC frames. TPC frames are not meant to convey men or carry goods; they are not used as means of transport and, therefore, they cannot be considered as "motor vehicles". It was contended that if "TPC frame" is not considered as a "motor vehicle", the subsequent sales by the assessees in these cases (of motor vehicles with bodies built on the TPC frame) should be bifurcated into as sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the vehicles for their own purposes. The vehicles sold by the assessees were, all old vehicles. In the very nature of these vehicles, their different parts may not have distinct, usable, independent identities. The theoretical possibility that the vehicle could have been dismantled into (i) "TPC frame" and (ii) "the body" before selling them ignores the commercial realities. A purchaser very rarely 'purchases a vehicle treating it as a federation of two articles; the purchaser purchases the vehicle, as a single, integrated, identifiable article. The assessees had the benefit of using the vehicles in their business; admittedly the price fetched by each of the motor vehicle, when sold, was much lower than the cost of acquiring the TPC frame and the body built thereon. There is not a single instance of a higher price being fetched in these cases, on sales of those old vehicles. The alleged hardship is of short duration; Legislature has obviously taken note of the need to levy a lower rate of tax on the chassis from April 1, 1983. The rate of tax was far lower than the rates under entries 70 and 71. If the Legislature intended to give due credit to the tax levied on the cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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