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PETITIONER:

M/S UNITED COPIEX (INDIA) PVT. LTD.

Vs.

RESPONDENT:

COMMISSIONER OF SALES TAX

DATE OF JUDGMENT: 25/03/1996

BENCH:

SEN, S.C. (J)

BENCH:

SEN, S.C. (J)

JEEVAN REDDY, B.P. (J)

CITATION:

JT 1996 (3) 658 1996 SCALE (3)181

ACT:

HEADNOTE:

JUDGMENT:

[With Civil Appeals Nos. 4822-25 of 1996 (Arising out of

S.L.Ps. (C) Nos. 11306, 11307, 11308 and 11309 of 1994)].

J U D G M E N T

SEN, J.

Special leave granted.

In this case we have to decide whether 'rubber flaps'

manufactured by the appellant can be classified under sub-

entry (2) of Entry 43 in the Schedule to the Uttar Pradesh

Sales Tax Act, 148. The relevant Entry in the Schedule has

been set out in the judgment of the High Court as under:

"(1) Motor vehicles including motor

cars, motor taxi cabs, motor

cycles, motor cycle combinations,

motor scooters, mopeds, motorettes,

motor omni-buses, motor vans, motor

lorries, motor trucks, jeeps,

station wagons and chassis of motor

vehicles and bodies or tankers or

motor caravans built or meant for

mounting on chassis of motor

vehicles, but excluding tractors

whether on wheels or on tracts.

(2) Components, parts and

accessories of vehicles specified

in sub-entry (1) above, including

tyres and tubes, batteries and

trailers adapted for use along with

the said vehicles, other than such

trailers as are predominantly used

along with any other vehicles."

The appellants are manufacturers of rubber flaps which

are used for giving support to the rubber tubes used in the

tyres of motor vehicles. The contention of the appellant is

that such rubber flaps do not fall under any of the items

specified in the Schedule and, therefore, they should be

taxed as unclassified items for which the rate of tax is 8%.

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The Assessing Officer, however, taxed the turnover of the

rubber flaps under sub-entry (2) of Entry 43 of the said

Schedule, treating the rubber flaps to be an accessory of

motor vehicles.

The assessee's first appeal to the Statutory Appellate

Authority failed. The assessee thereafter appealed to the

Tribunal. The Tribunal noted the argument of the assessee

that the flaps were used between the wheel rim and the tyre

tube of bus, trucks and other heavy vehicles, rubber flaps

were manufactured from rubber and that the assessee had

treated flaps taxable as unclassified item in the category

of rubber products. The Tribunal also took note of the two

judgments placed before it but distinguished them on facts.

It was pointed out that in the case of Modi Rubber Ltd. v.

State of Kerala Government (1991) 81 STC 225, Kerala High

Court held that rubber flaps came under the category of

'rubber products'. But in the Uttar Pradesh Act, there was

no separate classification of rubber products as taxable

goods. Hence no decision about taxability of rubber flaps

could be taken in the light of the Kerala Judgment.

The case came before the Allahabad High Court for

Revision under Section 11 of the U.P. Sales Tax Act. The

High Court held that "in the face of the undisputed fact

that the article in question is used for the protection and

support of rubber tubes in the wheels of heavy automobiles

there seems to be no escape from the conclusion that the

rubber flap has to be treated as accessory of motor vehicle.

Although there is no direct evidence about the sale of the

rubber flap in automobile market yet in view of its

exclusive use it can be presumed that it is an item which is

sold in the automobile market." In the case of State of

Orissa v. Dunlop India Ltd., (1993) 91 STC 379, it has

specifically been mentioned that flap is commercially a

distinct identifiable commodity available for sale in the

automobile market. The High Court upheld the decision of the

Tribunal that the rubber flaps were taxable as 'accessory'

of motor vehicle.

This judgment is now under appeal in this Court.

Under sub-section (d) of Section 3A of the U.P. Sales

Tax Act, 1948 a dealer has to pay tax on the turnover in

respect of goods specified in the Schedule to the Act at

such rate as the State Government may by notification

declare. Sub-section (e) of Section 3A provides for goods

other than those referred to in clauses (a), (b), (c), (d)

of Section 3A will be charged the tax at the rate of 8%. The

contention of the assessee is that rubber flaps manufactured

by it do not fall under any of the specific heads in the

Schedule and, therefore, the only way to tax rubber flaps is

by taking recourse to sub-clause (e) of Section 3A(1).

Entry 43 of the Schedule is in two parts. The first

part [sub-entry (1)] deals with motor vehicles. Motor cars,

motor taxi, cabs, motor cycles, motor cycle combinations,

motor scooters, mopeds, motor trucks, jeeps, station wagons,

chassis of motor vehicles etc. have all been included in

this sub-entry. The second part [sub-entry (2)] relates to

components, parts and accessories of vehicles mentioned in

sub-entry (1) including tyres, tubes, batteries and certain

types of trailers.

Whether 'rubber flap' can at all be treated as an

accessory is a debatable issue. From what has been brought

on record rubber flap is a protective device. It is placed

between the tube and the rim, possibly to save the tube from

coming into direct contact with overheated rims on long

drives. In the Central Excise & Tariff Act, flaps have not

been treated as accessories of motor vehicles. Flaps are

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taxable under Tariff Item 40.12 under the Heading Solid or

Cushion Tyres, Interchangeable Tyre Treads and Tyre Flaps of

Rubber. That means the flaps will not come under the heading

"parts and accessories" of motor vehicles in Entry 87.05 in

Chapter 87 of that Act. It is well accepted that the entries

in the Schedule to the Excise Act have been stated in the

language of the market place and are to be understood as the

market-people understand them. If the flaps are treated as

Car accessories in market parlance, then there is no reason

to treat it separately and independently as an item of

rubber product in Chapter 40.

This, however, cannot conclude the dispute raised in

this case but is a good indication of the legislative

intent. The flaps have not been understood or treated as

accessories of motor vehicles by the legislature in another

central revenue Act.

Be that as it may, the short question in this case is,

having regard to Entry 43 in the Schedule to the U.P. Sales

Tax Act, can it be said that the 'rubber flaps' manufactured

by the assessee can come within the phrase 'components,

parts and accessories of vehicles specified in sub-entry

(1)? 'Rubber flaps' can hardly be described as an accessory

of a vehicle. Meaning of 'accessory', according to the

Webster Comprehensive Dictionary, International Edition, is

'a person or thing that aids subordinately; an adjunct;

appurtenance; accompaniment'. The 'rubber flap', which is

used to protect the tubes of the tyres, is not an adjunct,

appurtenance or accompaniment to a motor vehicle. At the

highest, it can be said that it increases the life of a tube

by keeping it away from direct contact with the rim of a

wheel. Sub-entry (1) does not include tyres and tubes or any

other component, part or accessory within the description of

'motor vehicles'. Tyres and tubes have been specifically and

separately mentioned in sub-entry (2) alongwith 'components,

parts and accessories of vehicles specified in sub-entry

(1)'. The flap may be used as an adjunct to the tyre or an

extra piece of rubber to give additional protection to the

tubes. It may, at the highest, be an accessory of an item

falling under sub-entry (2) of Entry 43, but it cannot be

treated as an accessory of the motor vehicle itself which

falls in sub-entry (1). Even on the basis of facts as found,

it cannot be said that the 'tyre flaps' will fall within the

description of 'components, parts and accessories of

vehicles specified in sub-entry (1)'.

This distinction was pointed out in the case of Modi

Rubber Ltd. v. State of Kerala, (1991) 81 STC 225. In that

case, Kerala High Court had to deal with the following two

Entries:

"THE FIRST SCHEDULE

Goods in respect of which single point

tax is leviable under sub-section (1)

or sub-section (2) of Section 5.

-------------------------------------------

Sl. Description of Point of Rate of

goods levy tax

-------------------------------------------

39.Rubber products At the point 8

other than of first sale

those speci- in the State

fically ment- by a dealer

ioned in this who is liable

Schedule. to tax under

section 5.

138.Motor vehicles, At the point 15."

motor vessels, of first sale

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motor engines, in the State

chassis of motor by a dealer

vehicles, who is liable

trailers, motor to tax under

bodies built section 5.

on the chassis

of motor

vehicles, bodies

built for motor

vessels, or

engines, and

spare parts and

accessories

thereof.

--------------------------------------------

Dealing with Entry 138, it was observed by the Court:

"Counsel for the Revenue submitted

that rubber flaps manufactured and

sold by the revision petitioner are

accessories of the spare parts of

motor vehicles, specified in entry

138 of the First Schedule to the

KGST Act. We are of the view that

entry 138 refers to motor vehicles,

motor vessels, motor engines, etc.,

and spare parts and accessories

thereof, which means spare parts of

motor vehicles, motor vessels,

motor engines, etc. The words

'accessories thereof' in entry 138

of the First Schedule have

reference to motor vehicles, motor

engines, etc., and not the 'spare

parts', immediately preceding the

words occurring in the entry. The

Appellate Tribunal was in error in

holding that rubber flaps

manufactured and sold by the

revision petitioner are accessories

of spare parts of motor vehicles,

coming under entry 138 of the First

Schedule to the KGST Act."

In the instant case, Entry 43 has been split up into

two parts. The first part deals with motor vehicles etc. and

the second part deals with components, parts and accessories

of vehicles mentioned in the first part. Tyres and tubes are

included in the phrase 'components, parts and accessories of

vehicles'. A protective cover like a rubber flap may be

treated as an accessory of something which is an accessory

of the motor vehicle. But that will not make the protective

cover an accessory of the motor vehicle itself.

A question may arise whether the accessory of a tyre

tube can be anything but accessory of the motor vehicle

itself. In other words the accessory of a part must of

necessity be the accessory of the composite whole which is

the motor vehicle in this case. This interesting question

need not be pursued in this case. 'Tyres and Tubes' and

'Motor Vehicles' have been classified separately under Entry

37. That means tyres and tubes have not been included in

motor vehicles. A rubber flap will be, if at all, an

accessory of the tyre or the tube falling in sub-entry (2)

and not of motor vehicles in sub-entry (1). The Legislature

in its wisdom has classified the tyres and tubes separately

in sub-entry (2) and not along with motor vehicles in sub-

entry (1). A flap being an accessory of an article falling

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under sub-entry (2) cannot be classified as an accessory of

an article falling in sub entry (1).

At the conclusion of the hearing of the case, we were

referred to some amendments made in sub-entry (1) which does

not have any material bearing on the dispute raised in this

case. It is not necessary to refer to these amendments.

We are of the view that this appeal must succeed and is

allowed. The judgment of the High Court dated January 18,

1994 is set aside. There will be no order as to costs.

CIVIL APPEALS NOS. .........................................

of 1996 (ARISING OUT OF S.L.Ps. (C) NOS. 11306, 11307, 11308

and 11309 of 1994)].

------------------------------------------------------------

Special leave granted.

In view of our judgment in Civil Appeal No. ...........

of 1996 (arising out of S.L.P. (C) 11305 of 1994), the above

appeals are allowed. There will be no order as to costs.