- (1.)IN this case the determining question is whether the goods ID fan, heat exchanger, blower and FD fan, manufactured by the petitioner comes under Sl. No. 54B of Schedule C, Part I as plant and machinery and exigible to tax at the rate of four per cent.
(2.)THE petitioner here in the case is a private limited company registered under the Companies Act, 1956 and a dealer registered under both the Central and State Acts. The petitioner manufactures ID fans, heat exchanger, blower, FD fan, etc., which are used by engineering and other industries. The petitioner was served with a notice in form 20 under the West Bengal Value Added Tax Rules, 2005 ("the VAT Rules") dated April 16, 2008 issued by the Sales Tax Officer, Bhawanipore Charge (respondent No. 2) and thereby asking the petitioner to deposit a sum of Rs. 4,95,098 for the quarter ending December 31, 2007 as short -payment of tax. Being aggrieved, the petitioner preferred a revision being No. R -06/BH/08 -09 before the Joint Commissioner of Commercial Taxes (South Circle), West Bengal (respondent No. 1) on August 14, 2008, urging that the goods manufactured by the petitioner fall under Sl. No. 54B of Schedule C of Part I of the VAT Act, 2003 and exigible to tax at the rate of four per cent only as against 12.5 per cent intended to be charged by respondent No. 2 in assessment. By an order dated May 6, 2009, the then respondent No. 1 has disposed of the said revision No. R -06/BH/08/09 upholding the notice in form 20 issued by the Sales Tax Officer, BH on April 16, 2008 and hence the present application under section 8 of the West Bengal Taxation Tribunal Act, 1987 for cancellation or setting aside the order impugned dated May 6, 2009 and the demand notice in form 20 issued and for other consequential relief(s).
(3.)IT is contended in the application and submitted by Mrs. Chandrima Bhattacharjee, learned advocate for the petitioner that the goods manufactured by the petitioner -company, i.e., fans, blowers, heat exchangers, etc., are plant and machinery as per definition of the said goods and accordingly squarely comes under entry No. 54B of Part I of Schedule C of the VAT Act and exigible to tax at the rate of four per cent but without considering the nature of the said goods and the application thereof in the industries respondent No. 1 has passed impugned order dated May 6, 2009 in mechanical way upholding the notice in form 20 issued by respondent No. 2 and hence the order impugned is liable to be set aside. It is also contended in the application and submitted by Mrs. Bhattacharjee that a machine is an apparatus for applying mechanical power. It is further contended and submitted that machinery means a number of machines which are entities to act upon by applying external energy for example gravitational energy, wind power energy and other types of energies to perform some useful works on the system for which the same are installed. It is the further submission of Mrs. Bhattacharjee that from the various sales bills, orders and literatures of the subjected goods of the petitioner it will appear that the same are nothing but plant and machinery used for engineering and other industries for the aforesaid purposes and therefore squarely comes under the ambit of Sl. No. 54B of Schedule C, Part I of the Act and taxable at the rate of four per cent and therefore the impugned order contemplating to subject the goods taxable at the rate of 12.5 per cent suffers from material illegality and irregularity and is therefore liable to be set aside. Mrs. Bhattacharjee also draws our attention to the assessment order dated June 15, 2009 and the demand notice thereof in form 27 (annexures C and D) and submits that the above assessment made by the Deputy Commissioner of Commercial Taxes, Bhawanipur Charge, for the period 2006 -07 charging tax at 12.5 per cent has been challenged by the petitioner by filing appeal before respondent No. 1 and that is pending decision and hence adjudication of the present application is necessary.
At the time of hearing Mrs. Bhattacharjee however submits the appellate order passed by the Joint Commissioner of Sales Tax, Kolkata South Circle, on June 28, 2010 and relying thereon it is submitted that in the said appellate proceedings the concerned appellate authority has accepted the contentions of the appellant made therein and on consideration of the work orders and the operations and the nature of work of the goods manufactured and sold by the appellant therein has opined that induced draft fan (ID fan), forced draft fan (FD fan) and heat exchanger, etc., all are integral parts of the plant and machineries where those equipments are installed and therefore come under the purview of item No. XXVIII of entry SI. No. 54B of Schedule C, Part I under the VAT Act, 2003 and to be taxed at the rate of four per cent. In the said order the submission of the appellant in respect of Cyclone Separator and Multi Pronged Dust Collector was however found not sufficient to conclude that those two machineries also come under the purview of item No. 54B of Schedule C, Part I of the Act and to form an integral part of plant and machineries lie the aforesaid other goods and hence should be taxed as per Schedule CA goods of the VAT Act and accordingly the assessment order passed on June 15, 2009 for the period 2006 -07 was confirmed on these two goods. Mrs. Bhattacharjee accordingly prays for setting aside and/or modification of the impugned order and the demand notice relating to the period third quarter ending December 31, 2007.