DEPUTY COMMISSIONER OF COMMERCIAL TAXES COIMBATORE DIVISION COIMBATORE Vs. STANES MOTORS SOUTH INDIA LTD

JUDGEMENT

(1.) THE Deputy Commissioner of Commercial Taxes, Coimbatore Division, is the petitioner. THE petition prays for a revision of the order of the Appellate Tribunal, the finding of the Tribunal which is attracted as erroneous being that in respect of the sales of tractors by the assessee, M/s. Stanes Motors (South India) Limited to two tea estates, the turnover in respect of those sales was entitled to the benefit of the lower rate of taxation under section 8(1)(b) of the Central Sales Tax Act. THE facts in brief are these : THE assessee sold tractors to four factories in Kerala State between December, 1957, and February, 1958. THE assessee is a registered dealer; so also are the tea factories under the Central Sales Tax Act. THEse are admittedly inter-State sales. THE Joint Commercial Tax Officer who made the order of assessment conceded that the sales of these tractors to the four factories are converted by "C" forms so that, according to him, there was compliance with the relevant provisions of the Act to that extent. But he stated :- "It was however found that these sales cannot claim assessment at the concessional rate in view of the fact that the tractors were not for resale or used in the manufacture of goods for sale; this turnover was therefore proposed to be assessed at 2 per cent."

(2.) THE view was taken by the assessing authority that goods which are not directly relatable to the manufacturing process cannot get the concession. Observing that "tractors cannot by any stretch of imagination be construed to be directly related to tea manufacture", the relevant turnover was assessed at 2 per cent. THE assessee appealed to the Appellate Assistant Commissioner, before whom it contended that the view taken by the assessing authority was very narrow and that the use of the tractors for the purpose of transporting tea leaves from the tea garden to the factory and also labourers from one place to to another brought the tractors within the scope of the expression used "in the manufacture of goods for sale". Whatever validity that argument might or might not have, the Appellate Assistant Commissioner took the view that though the lower rate of taxation provided by section 8(1) of the Central Sales Tax Act would extend not only to raw materials but also machinery etc., intended for use in the manufacture of goods, in these cases the tractors were used only in the tea gardens and not actually in the tea factories and that therefore they cannot be deemed to be goods directly relatable to the process of manufacture of tea. He accordingly confirmed the order of assessment. On further appeal to the Tribunal, the Tribunal upheld the assessment in part in respect of the sale of tractors to two factories in which cases it took the view that tractors would not fall within the scope of the class of goods entered in the relevant certificates of registration of those factories. In the case of the sale of the tractors to Haileyburia Tea Estate Ltd., and to the Indian Bare Earths Ltd., it thought that the use of the tractor had direct relation to the manufacture of tea for sale. To the extent of that turnover of the goods sold of these factories, the Tribunal admitted the claim of the assessee to the lower rate of taxation. It is this order of the Tribunal that is canvassed in the present revision petition, the contention of the department being that in the circumstances of the case, the view of the Tribunal, that the tractors sold of these two tea factories should be treated as machinery intended for use in the manufacture or processing of tea, is incorrect.