JUDGMENT
H.L. Agrawal, C.J.
1. This is a reference under Section 24(1) of the Orissa Sales Tax Act, 1947 made by the Additional Sales Tax Tribunal, Orissa at the instance of the dealer and two interesting but somewhat complex questions have been referred for opinion of this Court. The questions are:
(1) Whether, on the facts and circumstances of the case, the bus bodies mounted on the chassis are component parts of the motor vehicle ? and
(2) Whether, on the facts and circumstances of the case, the tax rate at the rate of 12 per cent on bus bodies is proper ?
2. The facts:
The petitioner, M/s. R. K. Patnaik, is a registered dealer and is an automatic motor vehicle body builder. The Sales Tax Officer, Cuttack-I, West Circle, while examining the books of accounts of the dealer for the assessment year 1976-77, found that the dealer had paid Rs. 42,500 as sales tax only at 6 per cent, i.e., a concessional rate, for the sale of automobile bodies built by it during the quarter ending 31st March, 1977, though according to the Schedule the sale turnover should have been taxed at 12 per cent. The case of the dealer before the assessing authority was that the bodies fitted on the chassis of motor vehicles were not component parts coming within the mischief of serial No. 57 of the rate chart and thus were liable to be taxed at 6 per cent only. The Sales Tax Officer negatived the contention of the dealer and charged sales tax on the turnover of the sale of bus bodies at 12 per cent. The petitioner had also failed before both the appellate authorities, namely, the Assistant Commissioner of Sales Tax and the Additional Sales Tax Tribunal, but, however, succeeded in getting a reference made to this Court of the two questions of law indicated above.
3. The entry at serial No. 57 which is the relevant entry reads thus:
Motor vehicle, including chassis of motor vehicle, motor tyres and tubes and spare parts, components of motor vehicle, but excluding motor car, tractor and its trailer.
The entire bone of contention is based upon the interpretation of the expression “components of motor vehicle.
4. This question is no longer res Integra and has fallen for consideration at least before 5 different High Courts by this time. The reported cases which have been already noticed by the Tribunal in its order were also placed before us. The courts in India have taken somewhat divergent views on this question. While the High Courts of Madras and Bombay in [1969] 23 STC 374 (Simpson and Co. Ltd. v. State of Madras) and [1975] 36 STC 242 (Commissioner of Sales Tax v. Jayanand Khira & Co. Pvt. Ltd.) respectively have taken a view in favour of the petitioner, the High Courts of Allahabad, Andhra Pradesh and Punjab and Haryana have taken a contrary view, that is, against the petitioner.
5. Let me first refer to the cases which may be said to be in favour of the petitioner.
In the Madras case [1969] 23 STC 374 (Simpson and Co. Ltd. v. State of Madras) the dealer had entered into a contract for construction of bus bodies on the chassis supplied to him and on reference to the terms of the contract entered into between the dealer and the other party (Government), the court, on appreciation of the facts of the case, held that the dominant intention was one of purchase by the Government of completed bus bodies as chattels, but taken delivery thereof after they were fixed and mounted on the chassis supplied by them and that the bus bodies could not be regarded as component parts of motor vehicles or even accessories thereof within the meaning of Section 3(2)(iv) of the Madras General Sales Tax Act, 1939. The court took notice of the fact that in the 1959 Act bus bodies had been specifically included in the relative item in Schedule I thereto.
In the Bombay case [1976] 36 STC 242 (Commissioner of Sales Tax v. Jayanand Khira & Co. Private Ltd.), the dealer had similarly entered into a contract with its customer for manufacture and fitting of 3 items on the chassis of a motor vehicle supplied by the customer, namely, (i) driver’s cabin of steel construction, (ii) one tank of 12,000 litres capacity, and (iii) one extra seat for the driver for sleeping accommodation. The dealer claimed that the work of manufacture of the oil-tank was carried on outside the chassis and it was easily detachable retaining its individuality and thus was not a component part of the motor vehicle. The High Court held that the oil-tank had both an independent existence and independent use, apart from being a part of a complete motor oil-tanker and, therefore, the oil-tank sold by the dealer was not a component part of the motor vehicle.
6. Both these decisions on the facts presented above are basically distinguishable. The ratio of the Madras case is based upon the fact that bus bodies had been specifically included in a separate Act, i.e., 1959 Act (the full particulars of the Act being not mentioned in the report) in the relative item in Schedule I thereto and the Bombay High Court took the view in favour of the dealer for the reason that the oil-tanker had an independent use and independent existence as well. But the Bombay High Court observed that the condition which was required to be fulfilled for making an article to fall under entry 68(2) was that the article must not be capable of being ordinarily used otherwise than as component and spare parts and accessories. It further observed that “in the present case, we are not concerned with a motor body mounted on the chassis of a motor truck”. In my considered opinion, the observation just excerpted above goes against the petitioner.
7. Let us now come to the cases which are directly against the petitioner.
Before the Allahabad High Court, Commissioner of Sales Tax, U.P. v. Pritam Singh [1968] 22 STC 414 was a case of a truck body being mounted on the chassis of a motor vehicle and considering some similar entry under the U. P. Sales Tax Act, R. S. Pathak, J. (as he then was), held :
The body mounted on the chassis of a motor vehicle is an integral part of the motor vehicle and, therefore, truck bodies manufactured and sold by an assessee must be considered as component parts of motor vehicles within the meaning of item No. 24 of the Notification….
Before the Andhra Pradesh High Court, in Pothula Subba Rao v. State of Andhra Pradesh [1972] 30 STC 69 the petitioner was constructing bodies for buses and lorries on the chassis supplied by the customers with his own materials and was charging the customers a consolidated amount and it was held that “the bodies of the motor vehicles were parts or components of motor vehicles…”.
In the Punjab and Haryana case (Ambala Coach Builders v. State of Haryana) [1977] 39 STC 44 also, bus bodies were mounted upon motor chassis, and Chinnappa Reddy, J. (as he then was), held that bus bodies should be regarded as component parts of motor vehicles.
8. Learned counsel for the petitioner also referred to two other cases, namely [1977] 40 STC 437 (Ker) (Paul Lazar v. State of Kerala) and [1979] 43 STC 141 (All.) (Commissioner of Sales Tax, U.P. v. Punjab Gramophone House). But both the cases are not of motor vehicles but of different goods, such as, electrical goods and gramophones and records. It is not necessary to advert to these cases in any detail to derive the conclusion when we have already got direct decisions of different High Courts on the point.
The meaning of the word “component” as given in the Chambers Dictionary is, “forming one of the elements or parts, one of the parts or elements of which anything is made up, or into which it may be resolved”.
9. In my considered opinion, the body of a motor vehicle would clearly be a part of it and the chassis of a motor vehicle cannot by itself be said to be a vehicle. To function as a conveyance, a motor vehicle must be capable of providing necessary accommodation to the passengers. Similarly, a truck to make it carry the goods for which it was manufactured must be fitted with a body. If it functions as a stage carriage, it must have a body designed to accommodate passengers. If it is intended to function as a carrier of goods, it must be designed to carry goods. Unless it is so designed, it is incapable of ordinarily discharging the purpose for which it is intended. There can be no dispute that in order to serve that purpose effectively it is necessary for a motor vehicle to have a body mounted on it.
10. On consideration of the entire facts and circumstances of the case and taking into account the ratio decidendi in the authorities mentioned above, the answers to the questions referred to this Court must be given against the dealer and in favour of the department.
In the circumstances, however, I would leave the parties to bear their own costs.
R.C. Patnaik, J.
11. I agree.