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2011 DIGILAW 428 (MAD)

VENKATESWARA INDUSTRIES v. STATE OF TAMIL NADU.

2011-01-27

FAKKIR MOHAMED IBRAHIM KALIFULLA, N.KIRUBAKARAN

body2011
ORDER F. M. Ibrahim Kalifulla - The assessee is the review petitioner. Challenge is to the order of the Tribunal dated October 17, 2005 passed in S.T.A. Nos. 1490 and 1693 of 2001. The assessment years are 1996-97 and 1998-99. The common questions of law raised in these revisions are : "Whether, in the facts and circumstances of the case, the Appellate Tribunal is right in holding that 'grease gun' supplied by the petitioner will not fall under entry 79(i) of Part B of the First Schedule to the TNGST Act, but falls under the residuary entry ?" The facts are that the revision petitioner is engaged in the manufacture of spares and accessories and tools for tractors, in particular as per the specifications given by the major tractor manufacturers, namely, M/s. Tractors and Farm Equipments Ltd., hereinafter referred to as TAFE, of the various spares and tools supplied by the petitioner, "grease gun" is one such item which, according to the petitioner, is one of the important tractor accessory/tool. It is also the case of the petitioner that "grease gun" was specifically designed by M/s. TAFE, to suit its use for the tractors manufactured by it. It is the further case of the petitioner that "grease gun" manufactured and supplied by the petitioner to M/s. TAFE, cannot be used by any other manufacturer of tractors. The petitioner also stated before the lower authorities that M/s. TAFE, used to supply the "grease gun" as one of the essential tools along with other tools kept in the tool box fitted in the tractors supplied by it to its customers. In the instruction book supplied to the customers by M/s. TAPE, it has explained the use of "grease gun" and the requirement of the application of grease to the various parts of the engine of the tractor at periodical intervals for longer life of the bearings fitted to the various tractor aggregates. In the said instruction book M/s. TAFE, is stated to have identified the various greasing points where the customer is required to apply grease with the aid of the "grease gun". In the said instruction book M/s. TAFE, is stated to have identified the various greasing points where the customer is required to apply grease with the aid of the "grease gun". When the assessing officer issued notice to the assessee in respect of the sale of "grease gun" up to July 16, 1996 and from July 17, 1996 for the assessment year 1996-97, the petitioner, in its objections, claimed that the sale of "grease gun" to M/s. TAFE, would attract the levy of four per cent tax only as the said item falls under tools/accessories as specified in item No. 79(i) of the First Schedule to the Tamil Nadu General Sales Tax Act, hereinafter referred to as the TNGST Act. The assessing officer, by stating that the dealer themselves charged tax at eight per cent on the sale of "grease gun" unto July 16, 1996 and as according to him the "grease guns" sold by them were not exclusive spare parts for tractors and can be used for other tractors also, it will fall under the residuary clause and consequential rate of tax to be applied was eight per cent and 11 per cent, respectively. The Appellate Assistant Commissioner, however, noted that the "grease guns" were sold by the petitioner only to M/s. TAFE, which were manufactured based on the specifications and drawings given by them, and not to any other dealer. The Appellate Assistant Commissioner has also noted that the "grease gun" cannot be used by any other tractor dealers and, therefore, the assessing officer's order cannot be sustained. The Tribunal, however, took the view that since "grease gun" is not normally fitted with the tractor, it cannot be taken as an accessory or a part of the tractor in order to apply Sl. No. 79(i) of Part B of the First Schedule. We heard Mr. P. Raj Kumar, learned counsel appearing for the petitioner and Mr. K. Radha Krishnan, learned Government Advocate (Taxes), for the respondent. Having perused the materials which were placed before the lower authorities, namely, the write-up, the description contained in the instruction book, the certificate issued by M/s. TAFE and the further fact that the petitioner was exclusively supplying "grease gun" only to M/s. TAFE, we are convinced that the stand of the petitioner merits acceptance. Having perused the materials which were placed before the lower authorities, namely, the write-up, the description contained in the instruction book, the certificate issued by M/s. TAFE and the further fact that the petitioner was exclusively supplying "grease gun" only to M/s. TAFE, we are convinced that the stand of the petitioner merits acceptance. The above materials disclose that the "grease gun" was being supplied along with the tractors to the customers by keeping it in a tool box, with the instruction book supplied to the customers specifically giving a description as to the necessity for using the "grease gun" at periodical intervals at different points specified as applied points in order to ensure proper maintenance of the operation of the engine and smooth running of the vehicle. When we read the specific entry contained in Sl. No. 79 of Part B of the First Schedule, we find that the description mentioned therein specifically states among other things "tools and implements" used therewith in relation to tractors of all kinds. In this context when we refer to the Oxford Dictionary of English the meaning of the word "tools" is given as "a device or implement, a special one held in the hand, a thing used to carry out a particular function". The word "implement" has been defined to mean "a tool, utensil or other piece of equipment especially used for a particular purpose". Therefore, going by the ordinary meaning of the word "tool" we find that "an implement which is used to carry out a particular function" and when we apply the said meaning, there can be no difficulty in stating that the said "grease gun" supplied by the petitioner to M/s. TAFE, for their exclusive use for being kept in the tool box attached with the tractor supplied by them is a tool. The nature of use as described in the instruction book of M/s. TAFE, discloses that with the help of the "grease gun" the lubricant-grease, can be applied in different specific parts of the vehicle noted in the instruction book for proper upkeep and maintenance of the tractor by using the said implement at periodical intervals. By virtue of the nature of its usage "grease gun" can be used as a device for application of grease into the bearings and other parts of the vehicle, namely, the tractor manufactured by M/s. TAFE. By virtue of the nature of its usage "grease gun" can be used as a device for application of grease into the bearings and other parts of the vehicle, namely, the tractor manufactured by M/s. TAFE. The further fact that the manufacture of such "grease gun" by the petitioner is according to the specifications of M/s. TAFE, and that it cannot be freely used by the other brand of tractors is one other relevant factor to support the stand of the petitioner that it is a part of an implement of the tractor manufactured by M/s. TAFE. On a conspectus construction of all the above factors which can be gathered from the materials available on record, it can be safely concluded that the "grease gun" supplied by the petitioner to M/s. TAFE, for being kept in the tool box of the tractor manufactured by M/s. TAFE, would squarely fall within the said expression "tool/implements" of a tractor. The conclusion of the Tribunal that the "grease gun" is not fitted with the tractor, in our considered opinion, is wholly irrelevant inasmuch as even going by common knowledge it cannot be said that the "grease gun" can be attached with the tractor or for that matter with any other automobile vehicle. In fact, a tool is never attached permanently in a vehicle. A tool is always an equipment kept in a vehicle and used for carrying out some repairs or carrying out other mechanical operations. Therefore, the said reasoning of the Tribunal in order to interfere with the order of the Appellate Assistant Commissioner was wholly unjustified. For all the abovestated reasons, we hold that the "grease gun" is a tool/implement as described in Sl. No. 79(i) of Part B of the First Schedule to the TNGST Act and consequentially, the rate of tax applicable is only four per cent as held by the Appellate Assistant Commissioner in its order dated March 6, 2000. The order of the Tribunal is, therefore, set aside. The question of law raised is accordingly answered in favour of the petitioner. The revisions are allowed.