IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.3198 OF 2019
(Arising out of S.L.P.(C) No.11937 of 2017)
CTO, Anti Evasion, Circle III,
Rajasthan, Jaipur ….Appellant(s)
M/s Prasoon Enterprises, Jaipur ….Respondent(s)
CIVIL APPEAL Nos.31993200 OF 2019
(Arising out of S.L.P.(C) Nos.48374838 of 2017)
CIVIL APPEAL Nos.32013202 OF 2019
(Arising out of S.L.P.(C) Nos.48394840 of 2017)
CIVIL APPEAL No.3203 OF 2019
(Arising out of S.L.P.(C) No.5981 of 2017)
J U D G M E N T
Abhay Manohar Sapre, J.
In C.A. @ S.L.P.(c) No.11937/2017
- Leave granted.
- This appeal is filed against the final judgment
and order dated 05.01.2017 passed by the High
Court of judicature for Rajasthan at Jaipur Bench,
Jaipur in S.B. Sales Tax Revision Petition No.114 of
2016 whereby the High Court dismissed the revision
petition filed by the appellant herein.
- The appeal involves a short point as would be
clear from the undisputed facts stated infra.
- The appellant hereinState of Rajasthan
(Commercial Tax Department) is the revision
petitioner whereas the respondent herein is the
respondent of the revision petition before the High
Court out of which this appeal arises.
- The respondent is engaged in the business of
trading of spare parts of mining machinery, steel
wire ropes, standard wires, wire rods etc. These
goods are subjected to payment of Value Added Tax
(VAT) under the Rajasthan Value Added Tax Act,
2003 (hereinafter referred to as “VAT Act”). The
respondent is a registered dealer under the VAT Act.
- The Commercial Tax Officer (AE) [hereinafter
referred to as “CTO”] conducted a survey in the
respondent’s business premises on 16.03.2009 and
it was noticed therein that the respondent was
charging VAT at the rate of 4% on “Mobile Crane
- It is with this background fact, the question
arose before the taxing authorities under the VAT
Act as to which is the proper Entry under the VAT
Act for charging tax on “Mobile Crane Wire Ropes”.
- The aforementioned question arose before the
CTO in the assessment proceedings, which were
initiated against the respondent in their business
premises as a result of the survey conducted by the
CTO and also arose before the Deputy
Commissioner, Commercial Tax Department to seek
his advance ruling on the aforementioned question.
- The CTO and the Deputy Commissioner were
of the view that the rate of tax chargeable to the
goods in question is 12.5% as prescribed in the
Residuary Entry in Schedule V under the Act and
not 4% as prescribed in Entry 155 of Schedule IV of
the VAT Act.
- In other words, both the taxing authorities
were of the view that the proper Entry for payment
of tax on these goods is the Residuary Entry of
Schedule V, which prescribes the rate of tax as
- The CTO accordingly initiated the assessment
proceedings against the respondent for the
Assessment Year 20072008. By assessment order
dated 16.03.2009, it was held that the respondent
was liable to pay VAT at the rate of 12.5% under the
Residuary Entry of Schedule V of the VAT Act.
Since the respondent had deposited the tax at the
rate of 4% treating the goods in question as falling
in Entry 155 of Schedule IV, the notice was issued
to the respondent to pay the difference amount of
VAT along with penalty and the interest payable
under the VAT Act.
- The respondent felt aggrieved and filed appeal
before the Deputy Commissioner (Appeals). By order
dated 02.12.2010, the Appellate Authority allowed
the appeal and set aside the order of the CTO (AE).
The Appellate Authority held that the ropes in
question were essentially used in Mobile Cranes as
part of the Mobile Cranes. It was held that a Mobile
Crane is not complete and nor it can effectively
function without the use of the rope. It was,
therefore, held that the rope is a part of a Mobile
Crane and chargeable to VAT in accordance with
rates prescribed in the Entry 155 of Schedule IV of
- The State (CTO) felt aggrieved and filed appeal
before the Rajasthan Tax Board under Section 83 of
the VAT Act. By order dated 06.01.2016, the Board
dismissed the appeal and affirmed the order of the
Deputy Commissioner. The State (CTO) felt
aggrieved and filed revision petition in the High
Court of Rajasthan Bench at Jaipur.
- By impugned order, the High Court dismissed
the revision and upheld the order of the Board,
which has given rise to filing of this appeal by way
of special leave by the State (CTO) in this Court.
- So, the short question, which arises for
consideration in this appeal, is whether the High
Court was justified in dismissing the appellant’s
(State/CTO) revision and thereby justified in
upholding the view taken by the Board that the
“Mobile Crane Wire Ropes” are chargeable to tax @
4% under Entry 155 of Schedule IV of the VAT Act.
- Heard Dr. Manish Singhvi, learned AAG for the
appellant and Ms. Jyoti Mendiratta, learned counsel
for the respondent.
- Learned counsel for the appellant (CTO) while
assailing the legality and correctness of the
impugned order reiterated the same submissions,
which were urged before the High Court.
- In substance, his submission was that the
goods in question are chargeable to tax at the rate
of 12.5%, which is the rate prescribed in the
Residuary Entry of Schedule V of VAT Act because,
according to the learned counsel, there is no specific
Entry under which the goods in question fall for
being taxed at a specified rate.
- In other words, the submission was that since
the goods in question are not specified in any of the
Entries in Schedule IV and Schedule V of the VAT
Act and 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.
- In reply, the learned counsel for the
respondent (dealer) supported the impugned order
and contended that it does not call for any
- Having heard the learned counsel for the
parties and on perusal of the record of the case
including the written submissions, we find no merit
in this appeal.
- As taken note of supra, the question, which
arises for consideration in this case, is whether the
“Mobile Cranes Wire Ropes” are chargeable to tax at
the rate of 4% or 12.5% under the VAT Act.
- In other words, the question arises is whether
the goods “Mobile Cranes Wire Ropes” fall under
Entry 155 of Schedule IV or under the Residuary
Entry of Schedule V of the VAT Act.
- At the relevant time, there were two relevant
Entries which read as under:
[See section 4]
Goods Taxable at 4%
S.No. Description of Goods Rate of
Conditions, if any
- 2. 3. 4.
- Hydraulic excavators
(earth moving and mining
cranes and hydraulic
dumpers (including parts
Bracketed portion was inserted by
08.05.2006 vide S.O. No.99 dated
[See section 4]
Goods Taxable at 12.5%
S.No Description of Goods Rate of Tax %Conditions, if any
1 2 3 4
- Goods not covered in any other
Schedule under the Act or under
any notification issued under
section 4 of the Act.
- Mere reading of Entry 155 quoted above 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
- It may be mentioned here that 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
- This Court has laid down the test as to how
the Court should decide the question as to whether
a particular item is a part of other. The test 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”. [See M/s Annapurna
Carbon Industries vs. State of Andhra Pradesh
[(1976) 2 SCC 273 and Commissioner of Central
Excise, Delhi vs. Insulation Electrical Private
Limited (2008) 12 SCC 45)]
- When we apply this principle to the facts of the
case at hand then we find no difficulty in holding
that 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%. The
reasons are not far to seek.
- The respondent has filed (Annexure R1), the
complete literature with a view 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. They have also filed the
details of the specification issued by the Bureau of
Indian Standards specifying therein the strength of
each wire rod/rope, which is used in the
manufacture of different kind of Cranes.
- Mere perusal of the literature would go to show
that the Mobile Cranes are not complete without the
wire ropes. In other words, in order to use the
Mobile Cranes and make them operational, the use
of wire ropes is essential. If wire ropes are not fitted
in the Mobile Cranes, they will not function much
- It is for this reason, we are of the considered
opinion that 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.
- We, however, make it clear that we have
examined only the question of taxability of the “wire
ropes” in the context of its use in Mobile Cranes as
would be clear from the question posed by the High
Court in Para one of the impugned order.
- In view of the foregoing discussion, the appeal
is found to be devoid of any merit and it thus fails
and is accordingly dismissed.
In C.A.Nos. @ S.L.P.(c) Nos.48374838/2017,
48394840/2017 and 5981/2017
- Leave granted.
- These appeals are directed against the
common final judgment and order dated 07.10.2016
passed by the High Court of Judicature for
Rajasthan, Jaipur Bench at Jaipur in S.B. Sales Tax
Revision Petition Nos.106, 101, 99, 100/2013 and
449/2011 whereby the High Court dismissed the
revision petitions filed by the appellant herein.
- In view of the order passed above in C.A. @
S.L.P.(C) No.11937/2017, these appeals are
[ABHAY MANOHAR SAPRE] ……………………………………….J.
March 26, 2019