Components of motor vehicles include components of components of motor vehicles.

The judgment of the court was delivered by

T. D. SUGLA, J. - This reference is at the instance of the assessee. It raises only one question of law which reads thus :

"On the facts of this case and the evidence produced and on a true and proper interpretation of entry 58(2) of Schedule C to the Bombay Sales Tax Act, 1959, whether the Tribunal was correct in holding that perkins inlet and exhaust valves and TMB inlet and exhaust valves sold by the opponent company under its two sales invoices, were not covered by the said entry ?"

2. The assessee is a company. It, inter alia, manufactures valves which are used in the manufacture of the diesel engines. By an application dated 26th March, 1973, under section 52 of the Bombay Sales Tax Act, 1959 (for short "the Act"), it requested the Commissioner of Sales Tax to determine the rate of tax applicable to two sales made by it. The particulars of sale were :

1. Bill No. 2349 dated 23rd January, 1973 for Rs. 4,603.92 in respect of the sale of perkins inlet and exhaust valves.

and

2. Bill No. 2222 dated 11th January, 1973 for Rs. 11,409.13 in respect of the sale of TMB inlet and exhaust valves.

It was stated in the application that the valves sold were components of diesel engines manufactured by M/s. Simpson and Co. Ltd., Madras, and that though the valves were generally used as components of diesel engines which were fitted into the trucks, they were interchangeable and could be used for various purposes such as to run launches, tractors, earth-moving machinery, etc. By his reply dated 29th May, 1973, the Commissioner informed the assessee of his views in the matter, viz., the question of alternative use of the valves in some other engines, would not arise because the said question would arise only in respect of other articles which are neither components nor spare parts of motor vehicles. Taking into account the assessee's further submissions vide application dated 25th June, 1973, the Commissioner, by his order dated 26th March, 1974, held that inlet and exhaust valves (part PI-001, PE-002, TI-201 and TE-205) fell within entry 58(2) of Schedule C to the Act so much so that sale of those parts was liable to sales tax at the rate of 12 per cent under section 8 of the Act. The assessee's appeal there against succeeded before the Sales Tax Tribunal.

The reason for the decision is found in paragraph 4 of the order which reads as under :

"It is clear to us that the valves in question were used in diesel engines. These diesel engines are used in Tata mercedes trucks and other trucks. But the question is whether from that it can be said that the valves are spare parts or components of the motor vehicles. We do not think that they can be said to be spare parts or components of motor vehicles. The appellant has produced the bills issued to other dealers. The learned Commissioner after referring to these sales invoices has observed that 'the same in no way support the applicants' case, because the valves bear different part numbers'. It is true that they bear different numbers. We, however, find that these valves are used in the case of diesel engines, which engines can be used to the trucks and also to launches, tractors, etc. It is difficult to say how they can be said to be covered by entry 58(2) of Schedule C. We, therefore, find that they are liable to sales tax at 3 per cent and general sales tax at 3 per cent."

3. The facts found by the Tribunal may briefly be stated once again. The valves manufactured by the assessee are components of diesel engines which are ordinarily used or fitted in the trucks. The diesel engines are also capable of being used in launches, tractors and/or earth-moving machinery. The relevant portion of entry 58 of Schedule C reads as under :

Entry 58 of Schedule C

Column (2) : Description of goods :

"(1) Motor vehicles including motor cars, motor taxi-cabs, motor cycles, motor cycle combinations, motor scooters, motorettes, motor omnibuses, motor vans and