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The Commissioner Trade Tax U.P.Lucknow v. S/S Chawla Trading Co. Delhi Road Meerut - SALES/TRADE TAX REVISION No. 493 of 1999  RD-AH 20789 (8 December 2006)
TRADE TAX REVISION NO.493 OF 1999
The Commissioner, Trade Tax U.P., Lucknow. ....Applicant
S/S Chawla Trading Co., Delhi Road, Meerut. ....Opp.party
Hon'ble Rajes Kumar, J.
Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 11.05.1999 relating to the assessment year 1996-97.
Dealer/opposite party (hereinafter referred to as "Dealer") was engaged in the business of purchases and sales of old diesel engine and their parts. The old and used diesel generating sets and their parts had been purchased from the dealer of outside the State of U.P. and had been sold as such within the State of U.P. Dealer claimed that the sale of such old and used diesel generating sets and their parts were liable to tax @ 4% + 1% surcharge under the Entry "Old, discarded, obsolete unserviceable....." of the notification no.ST-II-1225/XI-9(94)-U.P. Act 15/48-Order-92, dated 31.03.1992. Assessing authority however, had levied the tax on such old and used diesel generating sets and their parts Under the Entry "Machinery and their parts" of notification no.ST-TT-2-3402/XI-9(116)/94-U.P. Act-15/48-Order-94, dated 01.10.1994 @ 7.5%. First appeal filed by the dealer was dismissed. Dealer filed second appeal before the Tribunal. Tribunal allowed the appeal and held that such diesel generating sets had been obtained after dismantling of old ships, which could not be used in the ships again in the same form. It has also been observed that the dealer had sold old and used diesel generating set and their parts as such without any repair etc.
Heard learned counsel for the parties.
On the direction of this Court, dealer filed counter affidavit annexing the copy of the bills.
Learned Standing Counsel submitted that perusal of the purchase bills shows that diesel generating sets were old and used and not obsolete or discarded and non-useable except one of the purchase made from M/s R.B. Jodhamal & Co. Limited against bill no.1/96-97 dated 10.02.1997 for Rs.3.12 lacs, which finds place at page no.13 of the counter affidavit. He submitted that the diesel generating sets may be old but they were not obsolete and discarded and thus, they are not covered under the Entry "Old, discarded, obsolete, unserviceable........" He submitted that the aforesaid Entry has been interpretated by the Apex Court in the case of Rainbow Steel Limited, Meerut Road Muzaffarnagar through its Managing Director and another Vs. Commissioner of Sales Tax, U.P., Lucknow and another, reported in 1981 UPTC, 400 in which it has been held that the word "Old" should be read alongwith the word "Obsolete, discarded, discarded, unserviceable...." and if the goods is useable, it does not fall under the Entry "Old, obsolete and discarded....." merely because it is old. Learned counsel for the dealer submitted that the dealer had sold diesel-generating sets in the same form in which they were purchased. He submitted that the diesel generating sets, which the dealer purchased were obtained after dismantling the ships and were old, used and not workable and, therefore, Tribunal has rightly held that these diesel generating sets and their parts were liable to tax under the Entry "Old, discarded, obsolete, unserviceable...." @ 4% + 1% surcharge.
I have given my anxious consideration to be the rival submissions made by the parties and perused the order of the Tribunal and also copy of the bills filed by learned counsel for the dealer alongwith the counter affidavit.
Perusal of the bills show that except one bill no.1/96-97 dated 10.02.1997 of M/s R.B. Jodhamal & Co. Limited which finds place at page no.13 of the counter affidavit, which relates to old, unserviceable diesel generating sets in all other bills only old and used diesel generating bills are mentioned. In the bills, it is not disclosed that the said diesel generating sets were not non-useable and non functional. Diesel generating sets may have been obtained after dismantling the ships/vessels and same may not be used in the ships/vessels but it can not be said that they can not be used elsewhere. Unless diesel generating sets are obsolete, discarded and nonuseable they may not fall under the Entry "Old discarded and obsolete....." as held by the Apex Court in the case of Rainbow Steel Limited, Meerut Road Muzaffarnagar through its Managing Director and another Vs. Commissioner of Sales Tax, U.P., Lucknow and another (Supra). There is no dispute that diesel generating sets is machinery. It has been held as machinery in the case of Commissioner of Trade Tax Vs. M/s Elmech Engineers, Kanpur, reported in 2005 UPTC, 1030. SLP against the said order has been dismissed by the Apex Court. Thus, in my view except one diesel generating set, purchased from M/s R.B. Jodhamal & Co. Limited for Rs.3.12 lacs, which is said to be obsolete and unserviceable and rest of the diesel generating sets and their parts may be liable to tax as machinery and its parts @ 7.5%.
In the result, revision is allowed in part. Order of the Tribunal is seta side. Tribunal is directed to pass appropriate order under section 11 (8) of the Act.
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