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2011 DIGILAW 1379 (RAJ)

ACTO v. M/s. Sem Construction Company

2011-07-14

VINEET KOTHARI

body2011
JUDGMENT 1. - This revision petition has been filed by the Revenue against the order of Tax Board dated 25.3.2003 whereby dismissing the appeal of the Revenue and upholding the order of the first appellate authority, namely, Dy. Commissioner (Appeals) dated 19.8.1999, the learned Tax Board held that rate of tax applicable on cable and switches used by the assessee - Contractor in execution of a works contract was taxable in his hands at the rate of 6% under Entry 55 under the relevant notification no.F.4(4)FDBGr.IV/89-12 dated 23.3.1989, whereas the Assessing Authority had imposed difference tax of 6% holding these items to be taxable under Entry No.87 at the rate of 12% per annum for the assessment year 1988-89 by passing reassessment order under Section 12 of the Act on 10.3.1997. 2. The learned counsel for the petitioner - Revenue urged that since cables and switches used by the contractor -assessee were not used for generating, transmitting or distribution of electricity power as it was not power generating company, therefore, the goods in question, namely, cables and switches have been rightly taxed by the Assessing Authority at the rate of 12% and the learned authorities below including the Tax Board have erred in reducing the rate of tax to 6% under Entry 55. He submitted that Entry 87 covers all kind of electrical goods including casings, electric fans, lighting bulbs, electric earthenware, and electrical porcelain ware and therefore, the revision petition filed by the Revenue deserves to be allowed. 3. No body has appeared on behalf of the respondent - assessee to oppose these contentions despite service. 4. The learned counsel for the petitioner - Revenue also relied upon the decision of Madras High Court in the case of State of Tamil Nadu v. Vinyl Cable Industries decided on 26.2.1991,a print out of which downloaded from the website of Indiankanoon.org/doc/1760589 has been produced before this Court, in which Madras High Court held that a particular use to which a single article is put alone is not conclusive to know real nature and character of the article. That will determine how to identify it for tax purposes. 5. There is no quarrel on the proposition propounded by Madras High Court in the decision cited at the Bar. That will determine how to identify it for tax purposes. 5. There is no quarrel on the proposition propounded by Madras High Court in the decision cited at the Bar. However, this Court is of the considered and clear opinion that the goods in question, namely, cables and switches used by the contractor in works contract can certainly be said to be falling within the scope and ambit of Entry 55 taxable at 6%. Entry No.55 reads as under "55. All plans and equipments and their accessories (including service meters) required for exclusive use in generation, transmission, or distribution of electric power." 6. As against this, the competing entry relied upon by the Revenue viz. Entry No.87 reads as under: "All kinds of electrical goods including casings, electric fans, lighting bulbs, electric earthenware, electrical porcelain ware and other accessories excluding goods mentioned at item No. 55." 7. A close perusal of these entries would reveal that cables and switches, namely, the commodities in question can certainly be said to be all plants and equipments and they are required for exclusive use in generation, transmission and distribution of electric power more particularly, these are used for distribution of electric power. Whether they are sold in the course of execution of works contract by the contractor or by the electricity generating company does not make any difference. Since the commodity in question can be held to be used for distribution of electric power, Entry No.55 is clearly applicable to the same. Entry No.87 shows that the said entry covers domestic appliances and not the goods used for transmission or distribution of electric power. 8. Therefore, in the opinion of this Court, the learned Assessing Authority was in error in invoking entry No.87 for imposing difference tax of 6% and the learned Appellate Authority as well as the Tax Board have rightly held in favour of the assessee that goods in question will be taxable at the rate of 6% under entry No.55 quoted above. 9. Consequently, there is no force in the present revision petition filed by the Revenue and the same is accordingly dismissed. A copy of this order be sent to the assessee and the Tax Board.Revision Dismissed. *******