9911796707
TMI Blog1995 (9) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 10-A of the Central Sales Tax Act, 1956 (hereinafter referred to as "the CST Act") and levied penalty holding that the assessee had committed an offence under section 10(b) of the CST Act. Aggrieved by that order, the assessee preferred appeals before the Appellate Assistant Commissioner. He pointed out that Luna mopeds and spares would come under the broad classification of "machinery" and there was no false representation by the assessee in the purchase of those items by the issue of C forms and in that view, he allowed the appeals in respect of the purchase of mopeds and spares. In respect of transformers, he confirmed the levy of penalty, since the transformers, cannot be brought into the broad classification of "machinery". Likewise, he confirmed the levy of penalty in respect of the purchase of folding chairs and cables. Aggrieved by this, the assessee preferred appeals before the Tribunal. When those appeals were pending, the State filed enhancement petitions before the Tribunal to restore the levy of penalty in respect of the purchase of moped, moped spares also. The assessee filed a counter before the Tribunal reiterating the arguments, as advanced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the assessment years under consideration, "mopeds" were not taken note of under the provisions of the Act; but only from September 1, 1987 onwards, mopeds were included as "motor vehicles" under entry 3 to the First Schedule and that, therefore, "mopeds" should be taken within the broad classification of "machinery" for which, registration certificate was issued by the department. It was also submitted that on the basis of the various decisions cited by the assessee, before the Tribunal, the levy of penalty under section 10(b) of the CST Act is not exigible. 3.. In reply, learned Additional Government Pleader would submit that the fact that the assessee later applied for amendment of the certificate of registration, to include Luna mopeds, moped spares and transformers therein, would go to show that the assessee could not have entertained any bona fide belief that the definition "machinery" also take in "Luna mopeds" and "transformers". However, according to the learned counsel for the assessee, the transformers should be taken as a "machinery", because the assessee, after purchasing the transformers, fitted them in panels and sold them as control boards. It was pointed ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) of the CST Act? 6.. Taking up the "Luna mopeds" and "moped spares", in item 81 of the First Schedule to the TNGST Act, under the caption "machineries", mopeds and moped spares do not find a place and subsequently, "mopeds" were included under the caption "motor vehicles" under item 3(ii) in the First Schedule to the TNGST Act, and so, mopeds and moped spares could not be considered as "machinery" as contended by the department, cannot be accepted, because the classification of goods were made in the First Schedule to the TNGST Act for the purpose of levying tax at a particular rate. Hence, the classification of goods contained in the First Schedule to the TNGST Act would not determine the true nature of the goods dealt with by the assessee. The word "machinery" is not defined under the Act. Therefore, we have got to depend upon the various sources to understand the meaning of the word "machinery". In the case of D.B. Bhandari v. State of Mysore [1967] 20 STC 25, while considering the meaning of the word "machinery", the Mysore High Court at Bangalore held that " 'machinery' is a contrivance whereby several things are put together to work in such a way that force may be applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 276 (Kar), while considering the meaning of the word "machinery", in relation to tractor-trailer, it was held that a tractor is a machinery and a trailer is not a machinery. In Commissioner of Income-tax v. Mir Mohammad Ali [1964] 53 ITR 165, the Supreme Court, while considering the meaning of the word "machinery installed" as occurring in section 10(2)(vi), (via), (5) of the Indian Income-tax Act, 1922, adopted the definition of the word "machinery" in the decision of the Privy Council in Corporation of Calcutta v. Chairman of the Cossipore and Chitpore Municipality AIR 1922 PC 27; ILR 49 Cal 190 (referred to supra) and held that although it was not given in a tax case, it should prevail under the Income-tax Act also, as the word "machinery" was an ordinary and not a technical word. In that case, a diesel engine was held to be a machinery. On the basis of the ratio laid down in the above decisions, if we apply the meaning of the word "machinery" to "Luna moped" which is a motorised bicycle, it would be seen that "Luna moped" would also come within the purview of the definition "machinery". The assessee is a registered dealer in Luna mopeds and its spares. In the certificate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10(b) of the CST Act. 8.. Now coming to "transformers", the assessee has purchased transformers and fixed them in panels and resold the said articles. According to the assessee, the word "machinery" would also include "transformers". According to the assessee, since transformers are enumerated separately in the First Schedule of the TNGST Act for the purpose of ascertaining the rate of tax, it would not have any bearing in the matter of deciding whether transformers would fall under the category "machinery". By relying upon the decisions cited supra, counsel for the assessee submitted that transformers would also come under the category of machinery. Transformers are used for converting electric voltage from high voltage to low voltage and vice versa. In the present case, the assessee is purchasing transformers and by fitting them in panels and selling them as control boards. The Appellate Assistant Commissioner pointed out that even if the transformers are considered as a machinery, the authorisation was for the purchase of "machinery" only for resale and not for using them in the manufacture of some other item and then sell them off and that therefore, there is a violation ..... 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