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TMI Blog2023 (1) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... ically carves out exception. The goods tyres, tubes and flaps are excluded from the words Tractors, threshers, harvesters and attachments and parts thereof used in the said entry. It is stated in M/S. DEEPAK AGRO SOLUTION LTD VERSUS COMMISSIONER OF CUSTOMS, MAHARASHTRA [ 2008 (5) TMI 8 - SUPREME COURT] that what is not excluded would be held to be included - In COMMISSIONER OF CENTRAL EXCISE VERSUS SHREE BAIDYANATH AYURVED BHAWAN LTD. AND VICE VERSA [ 2009 (4) TMI 6 - SUPREME COURT] it is laid down that specific entry must prevail over a general entry. This Court in STATE OF ORISSA VERSUS BHARAT STORE [ 2002 (2) TMI 1299 - ORISSA HIGH COURT] held that it is a settled position of law that a taxing statute is to be strictly construed and the words used are to be given their natural meaning. It is also the settled position that entries in the Schedule are to be interpreted in their popular sense unless they are expressly defined in the enactment. In RAJ BROTHERS AGENCIES AND OTHERS VERSUS THE STATE OF TAMIL NADU [ 1976 (2) TMI 174 - MADRAS HIGH COURT] it has been stated that a special entry overrides a general provision. If main article to which the item in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion) JUDGMENT MURAHARI SRI RAMAN, J.- 1. Assailing Order dated 14th March, 2016 passed in S.A. No.73(V) of 2014-15 in the case of State of Odisha Vrs. Maa Santoshi Engineering, Jaipatna, Kalahandi and Order dated 16 th March, 2016 passed in S.A. No. 71(V) of 2014-15 in the case of State of Odisha Vrs. R.K. Engineering, Junagarh, Kalahandi by the learned Odisha Sales Tax Tribunal, Cuttack [Division Bench in Bhawanipatna Camp], the petitioners have raised the following questions of law: i) Whether on the facts and in the circumstances of the case, the Tribunal was legally justified to tax tyre, tube and flaps when sold along with tractor-trolley as a single unit to be taxed separately @ 12.5% and 13.5% and tractor-trolley without tyre, tube and flaps will be sold @ 4%? ii) Whether on the facts and in the circumstances of the case, the dispute being the rate of tax the confirmation of penalty by the Tribunal is correct in law? iii) Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in confirming the imposition of maximum penalty by the assessing officer without taking into consideration the decisions relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order dated 14 th March, 2016: 7. The answer to this question in our opinion rests in Sl. No.119 of Part-II goods taxable at the rate of 4% in the OVAT Act. It is very relevant here to quote Sl. No.119 which reads as follows: 119. Tractors, Threshers, harvesters, and attachments and parts thereof excluding tyres, tubes and flaps. 8. This Entry 119 makes it clear that tractors, threshers, harvesters and attachments and parts thereof are to be taxed @ 4%. As the said Entry specifically excluded tyres, tubes and flaps those are to be taxed @ 12.5% as unspecified goods. The statute in Sl. No.119 above has neither imposed nor pressed upon any conditions that the rate in the Sl. No. be applicable to traders and not to manufacturers when he sells his finished products. In the event of clarity in law in our considered opinion tractor-trailers are to be taxed @ 4% but not tyres, tubes and flaps etc. These goods (tyres, tubes, flaps) are to be taxed @ 12.5% in the tax rate schedule C of the OVAT Act. 2.3. Against this Order of the learned Tribunal the petitioner-dealer has approached this Court in revision invoking provisions under Section 80 for adjudication of ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -II of Schedule B does not warrant interference by this Court in the revision. Discussions as to question No.(i): 6. From the above, this Court is called upon to decide whether tyres and tubes used in tractor-trolley manufactured by the petitioner is liable to be taxed separately @ 12.5% for the tax periods up to 31.03.2011 and @ 13.5% after 01.04.2011 as per Part-III of Schedule B or @ 4% in terms of Entry 119 of Part-II of Schedule B appended to the OVAT Act. 6.1. It is not in dispute that Entry 119 of Part-II specifically carves out exception. The goods tyres, tubes and flaps are excluded from the words Tractors, threshers, harvesters and attachments and parts thereof used in the said entry. It is stated in Deepak Agro Solution Ltd. Vrs. Commissioner of Customs, (2008) 8 SCC 358 that what is not excluded would be held to be included. In CCE Vrs. Shree Baidyanath Ayurved Bhawan Ltd., (2010) 1 GSTR 1 (SC) it is laid down that specific entry must prevail over a general entry. This Court in State of Odisha Vrs. Bharat Store, (2002) 127 STC 333 (Ori) held that it is a settled position of law that a taxing statute is to be strictly construed and the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trailer were taxable as in Sl.2 from May 1, 1976 to August 31, 1978 and as in Sl.4 from September 1, 1978, till a specific entry as in Sl. 6 relating to spare parts and component parts of tractor and its trailer was prescribed to take effect from June 1, 1980. In other words, although with effect from May 1, 1976, tractor and its trailer became taxable as in Sl. 3 at a lower rate of 4 per cent their component parts continued to be taxed as in sl.2 at higher rate of 13 per cent from January 1, 1978, till the entry as in Sl.6 came into effect from June 1, 1980 prescribing rate of 4 per cent. Considering the above taxing history, it is apparent that component parts of tractor and its trailer were considered separate from tyres and tubes of tractor and its trailer, while carving out from sl. 2 automobile tyres and tubes as in Sl.5 with effect from September 1, 1978 and from Sl.4 component parts of tractor and its trailer as in Sl. 6 with effect from June 1, 1980. Consequently, the argument of the learned counsel for the dealer that tractor tyres and tubes are taxable as component parts of tractor is without any substance. (Emphasis supplied). 6.6. This Court while dealing w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by item 15. Item 17 deals with only cycles, their accessories and parts and not tyres and tubes referred to in item 15. 6.8. As such there cannot be any different set of rate of tax for same commodity. Same rate of tax is applicable to the manufacturer as also the trader. In Plasmac Machine Manufacturing Vrs. Collector of Central Excise, AIR 1991 SC 999 it has been rendered with regard to classification of commodity vis- -vis use of such commodity as follows: 7. *** In Bhor Industries Ltd., Bombay Vrs. CCE, (1989) 1 SCC 602 , the crude PVC films as produced by the appellants were not known in the market nor could they be sold in the market. Sabyasachi Mukharji, J., as he then was, while considering the submission that it was only the goods as specified in the schedule to the Act that could be subjected to the duty in para 6 observed: (SCC p. 607, para 6) For articles to be goods these must be known in the market as such or these must be capable of being sold in the market as goods. Actual sale in the market is not necessary, user in the captive consumption is not determinative but the articles must be capable of being sold in the market or known in the mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the OVAT Act. The observations of this Court in the said decision, which are relevant in the present context, were as under: 31. VAT is indirect tax on consumption of goods. It is the form of collecting sales tax under which tax is collected in each stage on the value added to the goods. The basic object of VAT Scheme is to provide voluntary and self compliance. It goes without saying that to plug the leakage of revenue, the Legislature enacted law authorizing imposition of penalty for infraction of any statutory provision. We are conscious that generally penalty proceedings are quasi judicial in nature. Therefore, before imposing penalty, opportunity of hearing should be provided to the affected assessee- dealer. In the OVAT Act, various Sections provide for imposition of penalty for infraction of statutory provisions. In most of those Sections opportunity of being heard is provided to a dealer before imposition of penalty. Those Sections are Section 28(1), Section 31(9), Section 34(3), Section 54(6), Section 61(5), Section 62(6), 65(2), Section 73(10), Section 73(12)(e), Section 73(13), Section 76(3), Section 76(8), Section 101(4) and Section 107(4). The present position is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of doubt that the assessment was as a result of the AVR and was made under Section 42(4) of the OVAT Act. The consequence of the penalty attracted under Section 42(5) of the OVAT Act was automatic. For ready reference, Section 42 of the OVAT Act reads as under: 42. Audit assessment.- (1) Where the tax audit conducted under sub-section (3) of section 41 results in the detection of suppression of purchases or sales or both, erroneous claims of deductions including input tax credit evasion of tax or contravention of any provision of this Act affecting the tax liability of the dealer, the assessing authority may, notwithstanding the fact that the dealer may have been assessed under Section 39 or Section 40, serve on such dealer a notice in the form and manner prescribed along with a copy of the Audit Visit Report, requiring him to appear in person or through his authorized representative on a date and place specified therein and produce or cause to be produced such books of account and documents relying on which he intends to rebut the findings and estimated loss of revenue in respect of any tax period or periods as determined on such audit and incorporated in the Audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis supplied] 7.1. With regard to applicability of ratio of decision in Union of India Vrs. Rajasthan Spinning Weaving Mills reported in (2010) 1 GSTR 66 (SC), which has been relied on by the Hon ble Supreme Court in the case of Commissioner of Central Excise, Chandigarh Vrs. Pepsi Foods Ltd., 2010 (260) ELT 481 (SC), needless to say that since they are rendered in different context and under different statutory setting of words, the reliance placed by the petitioner is misplaced. 7.2. It may be worthwhile to keep in mind the following dicta of the Hon ble Supreme Court vide Union of India Vrs. Arulmozhi Iniarasu, (2011) 7 SCC 397: 14. Before examining the first limb of the question, formulated above, it would be instructive to note, as a preface, the well-settled principle of law in the matter of applying precedents that the Court should not place reliance on decisions without discussing as to how the fact situation of the case before it fits in with the fact situation of the decision on which reliance is placed. The observations of the courts are neither to be read as Euclid's theorems nor as provisions of statute and that too taken out of their context. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and against the petitioner-dealer. Conclusion and decision: 8. For the discussions made in the foregoing paragraphs and the reasons enumerated supra, it is held as under: A. The question whether the Tribunal was legally justified to tax tyre, tube and flaps when sold along with tractor-trolley as a single unit to be taxed separately @ 12.5% [up to 31.03.2011] and 13.5% [after 01.04.2011] and tractor-trolley without tyre, tube and flaps will be sold @ 4% is answered in the positive, i.e., in favour of the opposite party-Revenue and against the petitioner-dealer. B. The question whether the dispute being the rate of tax the confirmation of penalty by the Tribunal is correct in law is answered in the positive inasmuch as the penalty is imposed on the tax assessed invoking Section 42(5) of the OVAT Act, i.e., in favour of the opposite party-Revenue and against the petitioner-dealer. C. The question whether the Tribunal was correct in confirming the imposition of maximum penalty by the assessing officer without taking into consideration the decisions relied on by the petitioner rendered in the case of Union of India Vrs. Rajasthan Spinning Weaving Mills, (2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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