IMPORTANT POINT
Wire ropes used in the Mobile Cranes held a part of Mobile Cranes and thus fall in Entry 155.

JUDGMENT :

Abhay Manohar Sapre, J.

In C.A. @ S.L.P.(C) No. 11937 of 2017

1. Leave granted.

2. 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.

3. The appeal involves a short point as would be clear from the undisputed facts stated infra.

4. The appellant herein-State 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.

5. 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.

6. 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 Wire Ropes".

7. 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".

8. 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.

9. 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.

10. 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 12.5%.

11. The CTO accordingly initiated the assessment proceedings against the respondent for the Assessment Year 2007-2008. 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.

12. 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 Act.

13. 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.

14. By impugned order, the High Court dismissed the revision and upheld the order of the Board, which has given ris