A.D. Kannappan, Sree Cheran vs State of Kerala

H.L. Dattu, C.J.—The short question that arises for our consideration and decision in this Tax Revision Case is, whether the Tractor Trailers and Power Tiller Trailers are exigible to tax under Entry 157 of the Ist Schedule to the Kerala General Sales Tax Act (for short, the Act) or under Entry 94 of Ist Schedule to the Act?

The assessee is a dealer registered under the Act. He is engaged in trading of Tractor Trailers and Power Tiller Trailers. For the assessment year 2003-2004, the assessee while filing annual returns, has classified the Tractor Trailers and Power Tiller Trailers as an item which will fall under Entry 157 of the Ist Schedule to the Act and had paid tax at 4%.

The assessing authority being of the opinion that the annual returns filed by the assessee was incorrect and irregular, after rejecting the returns filed had issued a proposition notice to the assessee, stating that the Tractor Trailers and Power Tiller Trailers are neither component parts or accessories of the Tractor and, therefore, proposed to levy tax under Entry 94 of the Ist schedule to the Act at 12%. After considering the reply filed, the assessing authority has confirmed the proposal made in the proposition notice.

The order passed by the assessing authority is confirmed by both the First Appellate Authority as well by the Tribunal in T.A. No. 47/07. Aggrieved by these orders, the assessee is before us in this Tax Revision Case. The assessee has framed the following questions of law for our consideration:

A. Whether on the facts and in the circumstances of the case, has not the Appellate Tribunal failed to consider the variou contentions raised before it as evidenced by Annexure E written submissions ?

B. Is not the order of the Appellate Tribunal a non-speaking order and hence illegal ?

C. Whether on the facts and in the circumstances of the case, has not the appellate tribunal gone wrong in failing to note that the Trailers which can be used only with tractor or power or power tiller can be classified only under entry 157 of the first schedule to the KGST Act ?

D. Whether on the facts and in the circumstances of the case, has not the Appellate Tribunal failed to take note of the fact that when trailers which can only be used with tractors/power tillers are classified in the entry relating to motor vehicles, the said classification leads to a situation where tractors/power tillers are taxable at 4% and its trailer becomes assemble at 12% and this interpretation is to be avoided ?

Shri Harisankar V. Menon, learned Counsel appearing for the assessee would submit, that the Tractor Trailers and Power Tiller Trailers are nothing but component parts and accessories of the Tractor and, therefore, requires to be taxed only under Sub-entry (ii) of Entry 157 of the Ist Schedule of the Act, and not under Entry 94 of the Ist Schedule of the Act which speaks of only Motor Vehicles, chasis etc. Therefore, the learned Counsel would submit that the Authorities under the Act and the Tribunal were not justified in passing the impugned orders.

Shri Muhammed Rafiq, learned senior Government Pleader appearing for the Revenue justifies the orders passed by the Authorities under the Act and as well as the Tribunal.

The answer to the questions of law raised by the assessee requires to be answered with reference to the Entries in the Ist Schedule to the Act. Entry 157 and Entry 94 of Ist Schedule to the Act read as under:

Sl. Description of Goods Point of levy Rate of Tax No. 157. (i) Tractor and Power tiller At the point of first sale 4% in the State by a dealer who is liable to tax u/s 5

(ii) Truck mounted articulated Cranes, pick and carry cranes, bulldozers, escavators and other Do. 4% earth moving machinery, vibratory compactors, pavers, pneumatic tyre rollers, their components, spare parts and accessories" 94. Motor vehicles, chassis of At the point of first sale motor vehicles, motor cycles, in the State by a dealer motor cycle combinations, who is liable to tax under motor, scooter, mopeds, Section 5. 12% motorettes three wheelers, motor vessels, motor engines, trailers, motor bodies built on chassis of motor vehicles and bodies built on motor vessels. Explanation - When a tax has been levied on chassis of motorvehicle or on body built on such chassis within the State, the tax payable on the motor vehicle produced out of such chassis shall bereduced by the amount of tax paid on such chassisor body built on such chassis.

Sub Entry (i) of Entry 157 of the Ist Schedule to the Act speaks of Tractor and Power Tiller. The point of levy is the first sale point in the State by a dealer who is liable to tax u/s 5 of the Act and the rate of tax is 4%. Sub-entry (ii) speaks of truck mounted articulated Cranes, bulldozers, etc. and their components and accessories. Entry 94 of the Ist Schedule to the Act speaks of Motor Vehicles, chasis of motor vehicle, Trailers etc. and the point of levy is at the point of first sale in the State by a dealer who is liable to tax u/s 5 of the Act, and the rate of tax is at 12%.

Shri Harisankar V. Menon, learned Counsel appearing for the assessee would submit that the component parts and accessories in Sub-Entry (ii) should apply to Sub-Entry (i) as well, and if it is done in that manner, the tractor trailer and power tiller trailer are component parts of Tractor and Power Tiller and therefore liable to tax only at 4%.

Though the submission of the learned Counsel for the assessee, at the first blush is attractive, on a deeper consideration of the matter, in our opinion, has no merit.

It is well settled rule of construction that where a statute contains both a general provision as well as a specific provision, the latter must prevail. Sub-entry (i) speaks of only Tractor and Power tiller and not its component parts of accessories. Sub-entry (ii) of Entry 157 of the Ist Schedule to the Act speaks of Truck mounted articulated cranes, pick and carry cranes, bulldozers, escavators and other earth moving machinery vibratory compactors, etc. and thereafter the legislature has specifically indicated components, spare parts and accessories, and in our view, component parts and accessories can go along with the truck mounted articulated cranes, pick and carry cranes, bulldozers etc. and it cannot be read with sub entry (i) of Entry 157 of the Ist schedule to the Act. If it is done, we will be literally violating the intention of the legislature which, in our opinion, is impermissible and therefore, we cannot accept the contention of Shri Harisankar V. Menon. Entry 94 of First Schedule to the Act apart from mentioning Motor Vehicles, chasis of motor vehicles, motor cycles, etc., specifically mention trailers. It is not in dispute that the assessee in the instant case effects sale of tractor trailers/trailers of power tillers, and therefore, the assessing authority was justified in treating trailers as an item falling under Entry 94 of First Schedule to K.G.S.T Act. Accordingly, while rejecting the Tax Revision Case, we uphold the orders passed by the Authorities under the Act and the Tribunal. Further, we answer the legal issues canvassed by the revision petitioner in the negative and in favour of the Revenue.

Ordered accordingly.