Rajasthan Value Added Tax Act, 2003:
Schedule IV, Entry 155; Schedule V, Residuary Entry – Mobile Crane Wire Ropes – Tax rate applicable – Whether chargeable to tax at the rate of 4% under Entry 155 of Schedule IV or at the rate of 12.5% under the Residuary Entry of Schedule V of the Act – Revenue’s submission was that since the goods in question are not specified in any of the Entries in Schedule IV and Schedule V nor they are the parts of the Mobile Cranes, the only Entry under which they can be taxed is the Residuary Entry of Schedule V of the VAT Act – Held: Mere reading of Entry 155 shows that Hydraulic excavators (earth moving and mining machinery), Mobile Cranes and Hydraulic Dumpers (including parts thereof) are chargeable to tax at the rate of 4% – A thing is a part of the other, if the other cannot function without it – Mere perusal of the literature shows that the Mobile Cranes are not complete without the wire ropes – Therefore, the Mobile Crane Wire Rope is an essential part of the Mobile Crane and would fall in Entry 155 of Schedule IV of the VAT Act and chargeable to 4% tax.
Dismissing the appeals, the Court
HELD: 1.1 Mere reading of Entry 155 would go to show that the goods called Hydraulic excavators (earth moving and mining machinery), Mobile Cranes and Hydraulic Dumpers (including parts thereof) are chargeable to tax at the rate of 4%. The expression “including parts thereof” was inserted in the Entry
155 by an amendment w.e.f. 09.05.2006. It, therefore, indicates that the parts of the goods specified in the Entry were not chargeable to tax at the rate of 4% prior to 09.05.2006 but became chargeable at the rate of 4% only on and after 09.05.2006. [Paras 25, 26][1052-E-G]
1.2 The test as to whether a particular item is a part of other is “a thing is a part of the other if the other is incomplete without it”. In other words, “a thing is a part of the other, if the other cannot function without it”. Applying this principle to the facts of the case at hand, the wire ropes used in the Mobile Cranes are a part of the Mobile Cranes and thus fall in Entry 155 of Schedule IV of the VAT Act. A fortiori, it is taxable at the rate of 4%. [Para 27-29][1052-G, H; 1053-A-B]
M/s Annapurna Carbon Industries v. State of Andhra Pradesh (1976) 2 SCC 273 : [1976] 3 SCR 561 ; Commissioner of Central Excise, Delhi v. Insulation Electrical Private Limited (2008) 12 SCC 45 : [2008] 5 SCR 625 – relied on
1.3 Mere perusal of the literature filed by the respondent to show as to how the Mobile cranes are designed, structured, built and operated in the field when it put to its ultimate use by the consumer depict that the Mobile Cranes are not complete without the wire ropes. It is for this reason, the Mobile Crane Wire Rope is an essential part of the Mobile Crane and, therefore, falls in Entry 155 of Schedule IV of the VAT Act. It is, therefore, taxable at the rates prescribed for the goods specified in Entry
155. [Paras 31 and 32][1053-D-F]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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