KHAITAN ELECTRICALS LTD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THE petitioner M/s. Khaitan Electricals Ltd. is a manufacturer of Water-Pump-sets used in water coolers, which has filed this revision petition challenging the order of the Rajasthan Tax Board dated 16. 2. 99 by which it has upheld the order of the Deputy Commissioner of appeals as also the assessing authority who had imposed 2% further sales tax on water pump sets used in water coolers as it was held that 10% of sales tax which was paid by the petitioner was not correct as it should be paid at the rate of 12%. THE controversy therefore which been raised in this revision petition is whether 12% sales tax is leviable on water pumps used in water coolers as per item 87 of the notification issued under Section 5 of the Rajasthan Sales Tax Act 1954 or it should be 10% as per item No. 105 which envisages 10% sales tax as general rate on all goods that are not covered by any other item in that notification which are given out from serial No. 1 to 104.

(2.) LEARNED counsel for the petitioner Mrs. Madhuri Singh first of all submitted that the sales tax was paid by the petitioner on water pumps used in water coolers at the rate of 10% which was accepted by the Department of Commercial Taxes all through and for the first time in the year 1995-96 an objection was raised for the assessment year 1992-93 by the assessing authority on the ground that 12% sales tax is leviable on the aforesaid item and since the petitioner was paying sales tax at the rate of 10% only, 2% was ordered to be realised. It was further submitted that this controversy was raised earlier also before the Rajasthan Tax Board in four appeals bearing Appeal No. 71/97 ST Jaipur, Appeal No. 72/97 ST Jaipur, Appeal No. 73/97 ST Jaipur and Appeal No. 74/97 ST Jaipur which were decided by two Members of the Rajasthan Tax Board on 16. 2. 99 and it was held therein that 2% above 10% making it 12% was not fit to be leviable as the petitioner had been realising the sales tax at the rate of 10% only. The Tax Board had relied upon the notification issued by the State Government bearing No. F4 (69) FD/tax/divn/95-V-74 dated 23. 7. 96 wherein it was laid down that in exercise of the powers conferred by Section 15, RST Act 1994 the State Government hereby exempts from tax the sale or purchase of water pump sets with motor having capacity up to one horse power, for the period from 23. 3. 89 to 6. 3. 94 to the extent to which the rate of tax in respect thereof exceeds 10% on condition that the tax charged or collected on the sale of said goods shall be paid to the State Government and that the tax already paid to the State Government if any, shall not be refunded. The fall out of the order was that the tax on water pump sets used in water coolers by virtue of this notification was to be taxed at the rate of 10% only and not 12% as insisted by the Department of Commercial Taxes since it was held therein that there was no material on record to gather that the petitioner assessee had realised sale tax at the rate of 12%. It was further held that the extra 2% tax alongwith interest was not fit to be sustained and hence the order imposing sales tax at the rate of 12% was set aside by the Board.