REPORTABLE

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)

VERSUS

M/s Prasoon Enterprises, Jaipur            ….Respondent(s)

WITH 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)

AND  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

1. Leave granted.

1 1

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 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.  

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,

2 2

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

3 3

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 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

4 4

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

5 5

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 rise to filing of this appeal by way

of special leave by the State (CTO) in this Court.

15. 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

6 6

"Mobile Crane Wire Ropes" are chargeable to tax @

4% under Entry 155 of Schedule IV of the VAT Act.

16. Heard Dr. Manish Singhvi, learned AAG for the

appellant and Ms. Jyoti Mendiratta, learned counsel

for the respondent.

17. 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.  

18. 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.   

19. In other words, the submission was that since

the goods in question are not specified in any of the

7 7

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.  

20. In reply, the learned counsel for the

respondent  (dealer)  supported the impugned order

and contended that it does not call for any

interference.

21. 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.

22. 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.  

23. In other words, the question arises is whether

the goods "Mobile  Cranes  Wire  Ropes" fall  under

8 8

Entry 155 of Schedule IV or under the Residuary

Entry of Schedule V of the  VAT Act.

24. At the relevant time, there were two relevant

Entries which read as under:  

SCHEDULE IV [See section 4]

Goods Taxable at 4% S.No. Description of Goods Rate of

Tax % Conditions, if any

1. 2. 3. 4. 155. Hydraulic excavators  

(earth moving and mining machinery), mobile  cranes and hydraulic  dumpers (including parts  thereof). Bracketed portion was inserted by  Notification  No.F.12(63)FD/Tax/2005­51 dated  08.05.2006 vide S.O. No.99 dated  09.05.2006

4

SCHEDULE V [See section 4]

Goods Taxable at 12.5% S.No Description of Goods Rate of Tax %Conditions, if any 1 2 3 4 1. Goods not covered in any other  

Schedule under the Act or under any notification issued under  section 4 of the Act.

12.5

25. Mere reading of Entry 155 quoted above would

go to show that the goods called Hydraulic

9 9

excavators (earth  moving  and  mining  machinery),

Mobile  Cranes  and  Hydraulic  Dumpers (including

parts thereof)  are chargeable to tax at the rate of

4%.  

26. 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

09.05.2006.

27. 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

10 10

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)]

28. 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.  

29. A fortiori, it is taxable at the rate of 4%. The

reasons are not far to seek.

30. 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

11 11

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.     

31. 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

less effectively.  

32. 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.

12 12

33. 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.

34. 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

1. Leave granted.

2. 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.

13 13

3. In view of the order passed above  in C.A.  @

S.L.P.(C) No.11937/2017, these appeals are

dismissed.       

                                    .………...................................J.                                    [ABHAY MANOHAR SAPRE]                                       

    …...……..................................J.              [DINESH MAHESHWARI]

New Delhi; March 26, 2019

14 14