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TMI Blog1999 (11) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a wire known as PVC covered insulated winding wire (hereinafter referred to as wire ) which is used in making the submersible pump. According to respondent, this wire is essentially a spare part of submersible pump as defined in entry 12 of Part IV of Schedule II of the Act and was, therefore, exigible to tax at the rates applicable to entry 12, i.e., 3 per cent. The respondent was accordingly making the payment of sales tax on this wire treating it to be a spare part of submersible pump. The assessing authorities under the Act accepted the same and allowed the respondent to pay tax as per rates applicable to entry 12 referred supra. However, since there were some doubts as to what rate should be applicable to this wire namely whether it be treated as spare part of submersible pump as per entry 12 or it be treated as electrical goods as defined under entry 15 (i.e., residuary entry) of Part III of Schedule II of the Act, the respondent invoked the jurisdiction of Commissioner under section 42-B ibid and requested the Commissioner to decide as to whether wire in question falls in entry 12 of Part IV of Schedule II or in entry 15 of Part III of Schedule II. The learned Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Board sought reference for answer, by this Court. By common order dated September 15, 1997, the Board was pleased to make a common reference under section 70(1) of the Madhya Pradesh Commercial Tax Act. Since, in the meantime, the earlier Act had been repealed as prayed by the State in all the cases arising out of different periods of assessment. By the order of reference at the instance of State, following common questions of law which arose out of the order of the Board have been referred for answer to this Court. (1) Whether under the facts and circumstances of the case, the PVC covered insulated winding wire was a spare part of the submersible pump sets, and thus chargeable under entry 12, Part IV, Schedule II? (2) Whether under the facts and circumstances of the case, the Tribunal was justified in setting aside the penalty under section 43(1) of the M.P. General Sales Tax Act, 1958. 5.. We have heard Shri Bharat Chitale, learned Government Advocate for the State and Shri G.M. Chaphekar, learned Senior Advocate with Shri C.B. Pancholia, for the respondent. 6.. Shri Bharat Chitale, learned Government Advocate, assailing the view taken by the Board, contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e classified in the category of general electrical goods because according to him, the wire is specially adapted for the use in the pump and is not capable of being used as an ordinary wire for any other purpose. He submitted that the use of such wire not being general but specific and vital one in submersible pump it makes wire, spare part of pump. In support of his submission, learned counsel relied on decisions reported in Parekh Electric Wire Industries Pvt. Ltd. v. State of Gujarat [1992] 85 STC 464 (Guj) and in Triveni Conductors Ltd. v. Commissioner of Commercial Tax [1998] 109 STC 19 (MP). 8.. Before we proceed to examine the issue it is necessary to refer to relevant entries of the Schedule. These entries are: Part IV /Entry 12 Tractors, tractor trailers, pumping sets 3 and spare parts and accessories thereof. Part III /Entry 15 All kinds of electrical goods excluding 12 articles specified in entry 37 of this Part. Plain reading of the entry 12 would show that 3 per cent of sales tax is leviable on tractors, tractor trailers, pumping sets as also on their spare parts and accessories. The words spare parts and accessories have not been defined under the Act. In such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and loudspeaker cabinets do not fall within the expression spare parts. The learned Judge while interpreting the meaning of the words spare parts held that the words spare part connotes a part which requires replacement in the ordinary course on account of wear and tear and as an extra item for use in an emergency. In our considered opinion even this case does not support the submission made by the counsel for the State. Yet another submission of the counsel for the State that no definite finding regarding the use of wire in pump is recorded for want of material filed by the respondent before the authorities has no substance as we find that this aspect was dealt with by the Board in para 6 of its order dated March 22, 1996 wherein the Board in clear terms after taking into account the factual material filed by the respondent before the lower authorities as also before the Board recorded a finding in favour of the respondent. 12.. We are of the view that the question whether the wire in question falls in entry 15 of Part III of Schedule II cannot be examined by us for the simple reason that this question is not referred to us. It is a settled principle of law that the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded as a distinguishable part of stator which is an integral part of electric motor. It being neither a raw material used in the manufacture or reparation of electric motor, nor an article of general use, it will have to be held that it is an article having a distinct commercial identity and is a distinguishable part of electric motor. For these reasons, it will have to be held that SECW wires sold by the assessees were spare part of an electric motor and sales thereof fell under entry 16(2) of Schedule II, Part A to the Act and not under entry 41 of that Schedule. The Tribunal was, therefore, wrong in taking a contrary view. We, therefore, answer the question referred to us in the negative, that is, in favour of the assessees and against the department. There shall be no order as to costs in these references. 14.. We are in full agreement with the view taken by the Gujarat High Court referred to supra. Similar is the view taken by one of us (Verma, J.) in a case reported in [1998] 109 STC 19 (MP) (Triveni Conductors Ltd. v. Commissioner of Commercial Tax), wherein it is held that enamelled wire is a spare part to motors and machinery under the new M.P. Vanijyik Kar Adhiniy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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