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TMI Blog2016 (10) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this sense, it must be held to be an article which adds to the comfort for the use of the motor vehicle. In view of the above, whether the Court applies the comfort test or whether it applies the test of whether an article can be said to be available for sale in an automobile market, on both scores, the car stereo held as an accessory. The entry of "accessories" was placed specifically in the company of and under the heading of motor vehicles. The other competing entry upon which reliance was placed was of microwave ovens and all other electronic goods "not specified anywhere else". Even if a car stereo be viewed as "electronic goods", they would stand comprised in Entry 18 by virtue of being an accessory to a motor vehicle. They were in this sense,though electronic goods, but since specified elsewhere they would stand excluded and extracted from Entry 75 - car stereo held as accessory - revision application dismissed - decided in favor of Revenue. - Sales/Trade Tax Revision No. 901, 902 of 2012 - - - Dated:- 7-10-2016 - Hon'ble Yashwant Varma, J. For the Applicant : Amit Mahajan, Gaurav Mahajan For the Opposite Party : C.S.C. ORDER Heard Sri S.D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circuit board laminate, populated printed circuit boards, power supply devices, cabinet and plastic components, Microwave oven and all other electronic goods not specified anywhere else in the schedule or in any other notification. M or I 4 per cent (iii) M or I 8 per cent Notification dated 29 January 2001 In the aforesaid notification, at Serial Number 1, 18, 29, 59, and 69, the following entries shall column wise be substituted, namely Serial number Description of goods Point of tax Rate of tax percentage 1 2 3 4 18 (i) (a) Motor vehicles including chasis of motor vehicles, but excluding light commercial vehicles mentioned in subclause (b) below, two wheelers motor vehicles and tractors and harvester combines. Sales by dealer to consumer or, in this case of through a hire purchase company, to the hire purchase company financing this pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be electronic goods thus falling within Entry 75. Aggrieved by the view that was taken by the assessing authority the revisionist preferred a First Appeal. The first appellate authority was informed during the course of proceedings before it that the controversy raised, had been settled by the Tribunal itself while dealing with a similar issue pertaining to A.Y. 2004-05. The judgment of the Tribunal rendered for A.Y. 2005-05 dated 20 June 2009 was placed for consideration before the first appellate authority. The first appellate however proceeded to hold against the revisionist and it is submitted in this regard that it chose to ignore a binding verdict handed down by the Tribunal. Aggrieved by the decision so taken, a Second Appeal was carried to the Tribunal. In the course of consideration of the matter the Tribunal felt that the decision rendered in proceedings pertaining to A.Y. 2004-05 required reconsideration. Accordingly, the President of the Commercial Tax Tribunal on 1 September 2010 proceeded to constitute a Larger Bench. It is the judgment rendered by the Larger Bench of the Tribunal on 27 September 2010 which forms subject matter of challenge in the instant revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an affidavit of service stating that two copies of the application together with other papers or affidavit accompanying it have been served on the Standing Counsel authorised to receive notice on behalf of the department concerned, and further stating that the Standing Counsel has been intimated the date of filing in Court of the application. (2) An application made by the Commissioner of Income Tax shall normally be accompanied by an affidavit of service stating that a copy of the application together with other papers and affidavit accompanying it have been served on the assessee in accordance with the procedure prescribed therefor by the Income Tax Act, 1961 and also stating that the assessee has been intimated in writing the date of filing in Court and the date of hearing of the application: Provided that if due to lack of time or other sufficient reason the affidavit of service does not accompany the application filed by the Commissioner of Income Tax, the aforesaid affidavit must be filed within three weeks of the date of institution of the application. (3) A counter affidavit if any, may be filed within two weeks of the service of the application after servin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax under Entry 18. The view so taken represents a paradigm shift from the opinion which was formed by the Tribunal for A.Y. 2004-05, wherein it accepted the case of the assessee that Car Stereos were electronic goods and therefore liable to be charged to tax under Entry 75. The primary basis for the change in position as struck by the Tribunal is based upon a judgment rendered by the Supreme Court in Mehra Bros. Vs. The Joint Commercial Officer, Madras AIR 1991 Supreme Court 1017. The Supreme Court in Mehra Bros. was considering the question as to whether Car Seat Covers were liable to be classified and treated as accessories to a motor vehicle. Dealing with the said issue, the Supreme Court in paragraph 5 of the report held as follows: 5. In Supreme Motors v. State of Karnataka case (supra), the Karnataka High Court has taken different view. It held that the car seat covers, at best could make the seat more comfortable, but do not serve as aids to the vehicle as a whole, and therefore, they must fall outside the ambit of entry 73 of the Second Schedule to the Karnataka Sales Tax Act, 1957 and was not exigible to sales tax at 13 per cent. Undoubtedly this ratio would help th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Allahabad High Court held that cycle covers, Rexine Saddle Cover whether part or accessory of vehicle under item 34 of the notification dated April 5, 1961 issued by the State of U.P. under Sections, of the U.P. Sales Tax Act (15 of 1948) with the same reasoning, as was given by the Karnataka High Court to be not accessories. We express that the Allahabad High Court also has not laid down the test correctly. (emphasis supplied) It has further been pointed out that the aforesaid judgment was subsequently followed by the Supreme Court in Pragati Silicons (P) Ltd. Vs. Commissioner of Central Excise, Delhi (2007) 9 SCC 470, which was considering the issue as to whether plastic name plates were liable to be treated as accessories to a motor vehicle. The said issue was answered by the Supreme Court in paragraph 21, in the following terms: 21. It is evident therefore, that an 'accessory' by its very definition is something supplementary or subordinate in nature and need not be essential for the actual functioning of the product. Applying the test laid down in Mehra Bros. case (supra), it cannot be denied that name plates add to the convenient use of the motor vehicle. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the revision of the Department on 6 September 2014. Referring to what the learned Single Judge recorded at that stage he submits that the same clearly amounts to an affirmation of the view taken by the Tribunal in A.Y. 2004-05. In view of the above, Sri Singh would submit, the issue stands settled in favour of the assessee and against the revenue and therefore binds the respondents to hold that a car stereo is not an accessory to a motor vehicle. Sri Pandey, learned Standing Counsel, on the other hand, has taken the Court through the detailed judgment rendered by the Tribunal and submits that the view taken by the Larger Bench is in consonance with the principles laid down by the Supreme Court in Mehra Bros. He submits that a car stereo is liable to be treated as an accessory by virtue of it being an article which aids in the comfort and use of the vehicle even though, it may be of a supplementary or secondary character. He has further placed reliance upon what stands noted in the judgment of the Tribunal to the effect that on occasions a car stereo is sold along with the car and sometimes fitted separately. This circumstance, he submits, is also an indicator of a car ster ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding to the effect that car stereos were not liable to be treated as accessories. All that can be deduced from the said order is that in the facts of that case, the learned Single Judge came to hold that no question of law arose from the order of the Tribunal. The judgment of the learned Single Judge, in the opinion of this Court, was not an affirmation of the view taken by the Tribunal in A.Y. 2004-05 to the effect that a car stereo is not an accessory to a motor vehicle. This, in the opinion of this Court, is not a declaration of the law by the learned Single Judge that a Car Stereo is not an accessory to a motor vehicle and is liable to be taxed as falling under Entry 75. More importantly, the Court notes that the learned Single Judge neither notes nor considers Mehra Bros. or Pragati Silicons (P) Ltd. The issue, in the considered view of this Court as to whether a Car Stereo is liable to be treated as an accessory to a motor vehicle, is liable to be judged and answered on the basis of the principles and tests as enunciated by the Supreme Court in the two judgments mentioned above. In the absence of consideration of the said two precedents by the learned Single Judge, the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnificance which flows from Mehra Bros. is where the Supreme Court specifically refers to stereos and air conditioners and holds that when they are fitted to the vehicle they indeed add to the comfort and enjoyment to the use of the vehicle. Significantly, the test which was laid down by the Supreme Court in Mehra Bros. thereafter was whether a particular article or a particular part could be said to be available for sale in an automobile market or shop or a place of manufacture. Their Lordships, then further proceeded to hold that if a dealer were to state that the same is available as an article or part which was manufactured or kept for sale only as an accessory for the use in motor vehicles, the same would also be indicative that it was liable to be treated as an accessory. It however must be noted that Their Lordships did observe that the above may or may not be a conclusive test and was given only by way of illustration. A car stereo is undoubtedly available as an article in an automobile market or shop or a place of manufacture. The Tribunal noted that in many cases a car stereo is either pre-fitted in a motor vehicle and in other instances fitted subsequently. A car ster ..... X X X X Extracts X X X X X X X X Extracts X X X X
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