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Agarwala Brothers Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case Number S.T.R. No. 133 of 1964
Judge
Reported in[1969]23STC306(All)
AppellantAgarwala Brothers
RespondentCommissioner of Sales Tax
Appellant Advocate B.L. Gupta and ; Ashoke Gupta, Advs.
Respondent Advocate The Standing Counsel
Excerpt:
- r.s. pathak, j.1. the petitioner deals in motor vehicles, motor parts, motor oils, diesel engines and other goods at kanpur. in the assessment proceedings under the u.p. sales tax act for the assessment year 1955-56, the petitioner claimed that diesel engines sold by him were liable to be taxed at three pies per rupee under section 3 of the act. the sales tax officer, however, held that the diesel engines were used for driving motor vehicles and were, therefore, motor parts taxable at the rate of six pies per rupee under notification no. st-369/x-923-48, dated 1st july, 1948. item no. 1 of that notification mentions :-motor vehicles, including motor-cars, motor taxi-cabs, motor cycles and cycle combinations, motor scooters, motorettes, motor omnibuses, motor vans and motor lorries.chassis.....
Judgment:

R.S. Pathak, J.

1. The petitioner deals in motor vehicles, motor parts, motor oils, diesel engines and other goods at Kanpur. In the assessment proceedings under the U.P. Sales Tax Act for the assessment year 1955-56, the petitioner claimed that diesel engines sold by him were liable to be taxed at three pies per rupee under Section 3 of the Act. The Sales Tax Officer, however, held that the diesel engines were used for driving motor vehicles and were, therefore, motor parts taxable at the rate of six pies per rupee under Notification No. ST-369/X-923-48, dated 1st July, 1948. Item No. 1 of that notification mentions :-

Motor vehicles, including motor-cars, motor taxi-cabs, motor cycles and cycle combinations, motor scooters, motorettes, motor omnibuses, motor vans and motor lorries.

Chassis of motor vehicles.

Component parts of motor vehicles.

Articles (including rubber and other tyres and tubes and batteries) adapted for use as parts and accessories of motor vehicles, not being such articles, as are ordinarily also used for other purposes than as parts or accessories of motor vehicles.

2. The petitioner appealed against the assessment and in appeal the Judge (Appeals) Sales Tax held that the diesel engines sold by the petitioner could be used in motor vehicles only with the assistance of conversion kits and that without the conversion kits they would ordinarily be used for other purposes. The Commissioner applied in revision and the Judge (Revisions) Sales Tax allowed the revision application holding that diesel engines were ordinarily used in motors and motor lorries and were, therefore, component parts of motor vehicles. At the instance of the petitioner this reference has been made for the opinion of this Court on the following question :

Whether diesel engines under these circumstances are to be regarded as component parts of motor vehicles so as to be covered by item No. 1 of the Notification No. 369/X-923-48 dated 1st July, 1948, as aforesaid chargeable under Section 3-A or whether these diesel engines are unclassified items chargeable under Section 3 of the Act.

3. Now, what we are concerned with in this case are the particular diesel engines sold by the petitioner. We are not concerned with diesel engines which are so constituted or adapted already that they are ready for use in motor vehicles. Admittedly, the diesel engines sold by the petitioner could not be used for driving motor vehicles unless they were changed and converted to such purpose. For that, conversion kits were required. It was with the assistance of conversion kits that they were suitably converted or adapted for the purpose of driving motor vehicles. Apparently, in their unchanged or original condition they could not be used for that purpose. It is also not shown what is the degree of conversion which was necessary in order to make the diesel engines sold by the petitioner capable of use for driving motor vehicles. There is a complete absence of material in that regard. The Judge (Revisions) has expressed the view that diesel engines are ordinarily used in motors and motor lorries. That may be so, but the question here is whether the diesel engine sold by the petitioner was capable of use in a motor vehicle and was a component part of a motor vehicle. In the Commissioner of Sales Tax v. Pritam Singh (Sales Tax Reference No. 486 of 1965 decided by this Bench on August 6, 1968) [1968] 22 S.T.C. 414 we held that an article is a component of another when it forms a constituent part of that other and is essential for completing it. That presumes necessarily that the article as such must in its condition and functioning be capable of use in that other. The Judge (Appeals) has held that the diesel engines sold by the petitioner could ordinarily be used for other purposes, and that it was with the assistance of the conversion kits that they could be used in motor vehicles. This aspect of the matter has not been considered by the Judge (Revisions).

4. In our judgment, the diesel engines sold by the petitioner cannot be said to be components of motor vehicles. We, therefore, answer the question referred in the negative. There is no order as to costs.


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