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TMI Blog2007 (2) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... lusively from M/s. Escorts JCB Limited, Poona and Ballabgarh in Haryana and mostly effects sales of those goods locally. In the annual returns filed, the assessee-company had classified the sales of JCB 3D and its parts and accessories and had admitted the liability of gross turnover on their sale at one per cent. The return so filed is not accepted by the assessing authority and therefore, had issued a proposition notice, proposing to levy tax on the goods sold by the assessee-company under entry 1(i)(a) of Part "M" of the Second Schedule appended to the KST Act and not under entry 1(ii)(e) of Part "M" of the Second Schedule to the KST Act as claimed by the assessee-company. The assessee-company had objected to the proposal made by filing its detailed objections. The assessing authority after considering the objections so filed, has confirmed the proposal made by him in the proposition notice and in that, has concluded that the goods sold by the assessee-company, namely, JCB 3D, its parts and accessories thereof are nothing but earthmovers and therefore, they would fall under specific entry 1(i)(a) of Part "M" of the Second Schedule appended to the KS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the appeal. In the revision petition filed before this court, the assessee-company calls in question the correctness or otherwise of the order passed by the Karnataka Appellate Tribunal in S.T.A. No. 596 of 2003, dated January 29, 2004. In the memorandum of revision petition, the assessee-company has raised the following substantial questions of law for our consideration and decision. They are: "(a) Whether, on the facts of the petition, the Joint Commissioner under revisional jurisdiction can exercise jurisdiction by invoking section 21(2) of the KST Act, 1957? (b) Whether the commodity that is sold by the petitioner, namely, JCB 3D tractor falls within entry 1(i)(a) of Part 'M' of the Second Schedule as held by the Joint Commissioner and the Appellate Tribunal or under entry 1(ii)(e) of Part 'M' of the Second Schedule as contended by the petitioner? (c) Whether when two views are possible, is it not a settled position of law that the entry which is more beneficial to the tax payer will have to be adopted? " We have heard Sri Sarangan, learned Senior Counsel for the assesseecompany and Smt. Sujatha, the learned Additional Government Advocate for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n remand and had not tied the assessing authority to tread on the path carved out by him in his order. Under the Act, the revisional authority is empowered to revise an order passed by the assessing authority, if for any reason, the order passed is erroneous and prejudicial to the interest of the Revenue. In the present case, the assessing authority had passed an order after the remand order passed by the first appellate authority by taking into consideration the nature of goods sold by the assessee-company. The order so made in the opinion of the revisional authority is improper, illegal and erroneous order and thereby prejudicial to the interest of the Revenue and therefore, requires to be revised. To arrive at this conclusion, the revisional authority has assigned more than one reason and those reasons prima facie do not appear to be either arbitrary or unreasonable. Therefore, this thinking and reasoning of the revisional authority cannot be said to be one without jurisdiction or without authority of law. Therefore, the first question of law framed by the assessee-company requires to be answered in the negative, i.e., in favour of the Revenue and against the assessee-company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on Wikipaedia Encyclopaedia, the learned Additional Government Advocate would submit, that JCB 3D is a engineering vehicle or construction equipment (sometimes referred to as earthmovers) are heavy duty vehicles, specially designed for executing engineering and construction tasks. This is so far JCB 3D machines are concerned. Now coming to the "tractor", the same is not defined under the Act. The dictionary meaning is, a self-propelled power unit, which is used to pull loads, to carry and operate tillage, cultivating and harvesting machinery, and to provide power through a suitable belt pulley, power take off or other power outlet, to drive stationary and draw implements and machines. Tractors are powered with internal combustion engines. The word "tractor" was coined by combining parts of the word "traction" and "motor". The tractors are of different varieties. Farm or agricultural tractors, which are used in factories for handling freight and baggage at the terminals and warehouse, road tractors used for road building and some times for carrying load and military tractors or tanks used in military operations and warfare. This is with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "that is to say" is used to include machineries like earthmovers. In the engineering field, there are various types of machineries used for the purpose of digging and transporting the earth. In order to include the various types of earthmovers, the Legislature then again uses the expression "such as". In the context, in which it is used, it can only mean, any type of earthmovers and saves all species or classes of earthmovers and by way of illustration, it speaks of dumpers, dippers, bulldozers and anything akin to those machineries. Therefore, by this entry, the Legislature intends to rope in such machineries, which are mainly used for the purpose of "earthmoving" for the purpose of taxation under the KST Act. The other entry, which we are concerned in this revision petition, is "agricultural machinery". The entry speaks of machinery which are used for agricultural purpose. The expression "agriculture" means, the science and the art of cultivating the soil; including the gathering in of the crops and the rearing of livestock; farming, etc. It is the central idea of either tillage of the land or sowing of seeds or planting or simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the parties on this issue. Sri Sarangan, learned Senior Counsel for the assessee-company, would contend "JCB 3D" machines are modern era of tractors and they are now extensively used in the agricultural operations by farmers having large tracts of land. The design, construction and the use to which it is put has all the features of a tractor and therefore, the first appellate authority was justified in coming to the conclusion that the machinery sold by the assesseecompany is a "tractor" falling under entry 1(ii)(e) of Part "M" of the Second Schedule appended to the KST Act. The learned Senior Counsel would further submit that even in common parlance, JCB 3D is known as "tractor" and therefore, the revisional authority was not justified in invoking his revisional powers to upset a wholly justified, proper and legal order. In aid of his submission, the learned Senior Counsel strongly relies on the observations made by a Full Bench of the Madhya Pradesh High Court in the case of RME Works v. Commissioner of Sales Tax [1976] 38 STC 310. In the said decision, the court was considering entry 44 of Part II of the Second Schedule to the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms an integral part, tyres (including pneumatic tyres) and tubes ordinarily used for the above (whether or not such tyres and tubes are also used for other vehicles) and articles (excluding batteries) adapted for use generally as parts and accessories of the above. While considering these two entries, the court has observed that in the light of the meaning given to the word "tractor", in these dictionaries, it would be clear that rear dumper and pay loader sold by the assessee-company cannot be called a "tractor". The difference between a tractor and other vehicles is that the tractor merely pulls another item of machinery. Rear dumper as well as pay loader are self-moving machineries with wheels. As they do not pull any other item, it is not possible to accept the contention that these fall within the scope of the word "tractor" and in that event independent of item 55A they cannot be brought within the scope of the First Schedule. In our opinion, the observations made by the Madras High Court in no way would assist the learned Senior Counsel for the assessee-company. The competing entries which the court was considering was entirely different from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, etc., akin to earthmovers and therefore, in our view, the revisional authority was justified in treating the machinery sold by the assesseecompany as an earthmoving equipment by rejecting the claim of the assessee-company that it is an agricultural machinery. Nextly, the learned Senior Counsel would ask us to adopt progressive interpretation of the statute and the entries and then hold JCB-3D as agricultural machinery since they have some, which we doubt very much, characteristics of a tractor. The suggestion appears to be, to have a modern outlook rather than grandma's perceptions, ideas and outlook. We really appreciate the idea mooted by the learned Senior Counsel, but this suggestion cannot be accepted, when the Legislature has taken all precautions and care to treat different machines constructed for different purposes to fall under different entries and exigible for different rate of tax. Though this was our thinking, the learned Senior Counsel to change our mindset did bring to our notice, the note made by learned author in Kanga and Palkivala (Ninth Edition), wherein the learned author has commented that "it is presumed that Parliament intends the court to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking. This means that in its application on any date, the language of the Act, though necessarily embedded in its own time, is nevertheless to be construed in accordance with the need to treat it as current law." In the comments that follow it is pointed out that an ongoing Act is taken to be always speaking. It is also, further, stated thus (pp. 618-19): "In construing an ongoing Act, the interpreter is to presume that Parliament intended the Act to be applied at any future time in such a way as to give effect to the true original intention. Accordingly the interpreter is to make allowances for any relevant changes that have occurred, since the Act's passing, in law, social conditions, technology, the meaning of words, and other matters. Just as the US Constitution is regarded as 'a living Constitution', so an ongoing British Act is regarded as 'a living Act'. That today's construction involves the supposition that Parliament was catering lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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