JUDGMENT
K. Shivashankar Bhat, J.
1. One revision petition is by the State which is aggrieved by the order in one of the matters pertaining to the assessment year 1976-77. The assessee had earlier purchased what is referred as the chassis of a lorry and thereafter built body on it and used the same. Subsequently the lorry was sold. The assessee contended that the sale of the vehicle did not attract any sales tax on the ground the earlier purchase had attracted sales tax and the tax was paid on the said sale transaction on the basis that what was purchased by the assessee was a motor vehicle under entry 70 of the Second Schedule to the Karnataka Sales Tax Act, 1957 (“the Act” for short). This contention of the assessee was accepted by the Karnataka Appellate Tribunal and hence the revision petition by the State. S.T.R.P. No. 35 of 1989 is by another assessee. The assessment period is November 16, 1982 to November 4, 1983. The assessing authority had accepted the contention of the assessee that the vehicle sold by the assessee was not to be taxed again, because tax had been paid on the chassis frame-cum-engine when it was purchased on June 20, 1980, under the aforesaid entry 70. This order of the assessing authority was revised by the Deputy Commissioner, who held that the earlier purchase by the assessee was a “chassis” and it became motor vehicle only after body was built by the assessee. This order was upheld by the Karnataka Appellate Tribunal. Hence the assessee has come up in revision. In the three writ petitions filed by another assessee also an identical question arises. A clarification issued by the Commissioner on August 8, 1989, is under challenge in these writ petitions. In the said clarification, the Commissioner has stated that the truck plus chassis-frame, without the platform or the body built on the chassis-frame, is liable to be taxed under entry 171 of the Second Schedule and if the body is built subsequently thereon, it becomes motor vehicle and then when the said motor vehicle is sold, entry 70 would be attracted. This entry 70, has now become item 13 of Part M to the new Second Schedule to the Act, with effect from April 1, 1988.
2. In the writ petitions, the petitioners have produced the photo of a “chassis-frame” and the photo of truck plus chassis-frame (vide annexure A). According to the assessee, in all these cases, they have purchased initially what is described as truck plus chassis-frame and this truck plus chassis-frame is nothing but a motor vehicle falling under entry 70 of the Second Schedule to the Act, as it then stood. All the assessees assert that the respective sales under which they purchased the truck plus chassis frame had attracted tax under entry 70 and taxes were paid treating the articles so purchased as motor vehicles.
3. The picture of the truck plus chassis-frame shows that there is a chassis-frame with the wheels and engine attached; there is also a wind shield in the front to cover the driver. However, no plank or platform is fitted on the chassis-frame capable of carrying any goods or passengers. The assessee contend that this truck plus chassis-frame (referred hereinafter as “TPC frame”) is registered as a motor vehicle under the provisions of the Motor Vehicles Act and falls within the definition of a “motor vehicle” under the said Act and that the persons conversant with the subject-matter treat this as a motor vehicle and not merely as chassis. If this TPC frame is considered as a motor vehicle, then no further tax can be levied only because a body is built to this equipment, and it is resold; under the provisions of the Act, tax is levied on the sale of the motor vehicle at a single point on the first or earliest of the successive dealers as per section 5(3) read with the Second Schedule. To appreciate the contentions, it is necessary to refer to the several relevant entries in the earlier Second Schedule to the Act; they read as follows :
Entry 70 : “Motor vehicles including motor cars, motor taxi cabs, motor
cycle and cycle combinations, motor scooters, motorettes,
motor omnibuses, motor vans and motor lorries.”
71 : “Chassis of motor vehicles.”
71A : “Bodies built on motor vehicle chassis.”
73 : “Articles – used generally as parts and accessories of motor
vehicles.”
4. Entry 71A was introduced with effect from April 1, 1986. Entry 72 relating to component parts of motor vehicles was omitted with effect from April 1, 1974. Rate of tax varied from time to time under these entries. Under entry 70, for the period April 1, 1974 to March 31, 1986, rate was 15 per cent. Under entry 71, for the period April 1, 1974 to March 31, 1983, rate was 15 per cent and thereafter during April 1, 1983 to March 31, 1986 it was 12 per cent, subsequently this rate under entry 71 was reduced to 4 per cent. The fact remains that during April 1, 1974 to March 31, 1983 rate of tax was the same under both the entries 70 and 71.
5. Entire Second Schedule was recast and a new Second Schedule was substituted from April 1, 1988. The goods were alphabetically arranged, by dividing the said Schedule into several parts. Part “M” covers goods of the description starting with the letter “M”. Part M, serial No. 13 covers motor vehicles; it has sub-items (i) to (vii). Serial No. 14 covers motor vehicles parts and accessories; it has sub-items (i) to (iii). “Chassis of motor vehicles” is in item 14(ii) of Part M. While serial No. 13(i) to (vii) refer to specific items of motor vehicles, sub-item (vii), ropes in “any other motor vehicle not covered by items above”.
6. The question is whether TPC frame is a motor vehicle, or is only a chassis. If it is chassis, then, the Revenue is justified in demanding a tax under entry 70 on the sale of the chassis fitted with the body subsequently. If TPC frame is a motor vehicle, just because, body is built on it and then sold after use for sometime, this subsequent sale cannot attract sales tax. This is the usual problem of deciphering the meaning of the terms describing an article in the sale sales tax law. Several decisions were cited by the learned counsel to guide us as to how the meaning of the terms should be gathered.
7. To start with, the dictionary meaning of the relevant terms may be referred. Websters New 20th Century Dictionary, Second Edition, gives the meaning of the word “chassis” as “the under frame-work of a motor vehicle including the wheels and engine parts”. The word “vehicle” means “any means of carrying, conveying or communicating”. Another meaning is “any device on wheels or runners for conveying persons or objects, as a cart, sled, automobile, etc.”
8. Websters New Collegiate Dictionary refers to the “motor vehicle” as “a piece of mechanised equipment” and the term “vehicle” as “an agent of transmission”, “a means of carrying or transporting something”.
9. Therefore, it can be safely said that a motor vehicle is an agent of transportation, motion of which is imparted by a motor.
10. The above dictionary also points out that the term motor means “one that imparts motion”.
11. A mechanised equipment, which is an agent for carrying or transporting men or matters, certainly could be called a motor vehicle
12. The Privy Council had an occasion to consider the meaning of the term “chassis” in Falkiner v. Whitton 1917 Appeal Cases 106. The decision was in the context of an Australian legislation levying customs duty. At page 113, the Privy Council observed as follows :
“One of the meanings of the French word chassis is a ‘frame’ and one finds the expression ‘chassis de fenetre’ (a ‘window frame’); and the evidence in this case establishes that the word ‘chassis’, when applied to a motor car or motor waggon, includes everything but the body placed upon this frame. The nature of the body so imposed may in many cases determine the character of the completed vehicle, though, of course, in most cases the frame of a waggon or lorry is stronger and the engines more powerful, owing to the greater load to be carried, than in the case of an ordinary motor car designed to carry four or five passengers.”
13. In Commissioner of Sales Tax v. Pritam Singh [1968] 22 STC 414 (All.), the question was : whether the body of the motor vehicle is a component part of it ? In that connection, the Bench observed as follows, at page 415 :
“…….. To decide that question it is necessary to determine first what is a motor vehicle. A motor vehicle is a carrying propelled by a motor. It is a vehicle intended ordinarily for conveying passengers or goods. Now, a component part of an article is one of the parts constituting it. It is an integral part necessary to the constitution of the whole article. Without it, it would not be possible to conceive of the entire article as a whole. Can it be said that the body of a motor vehicle is a necessary part of the motor vehicle ? Learned counsel for the respondent seeks to persuade us that the motor vehicle is a complete unit when it consists of a motor and chassis on wheels and that the body amounted on the chassis is not a necessary part of the motor vehicle. We are unable to accept the contention. To function as a conveyance, the motor vehicle must be capable of accommodating the passengers or carrying the goods intended to be conveyed. 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. The design of that body will vary according to whether the motor vehicle is intended to convey passengers or goods. But a body there must be, and unless there is a body it is not possible to say that a motor vehicle as understood in the popular or commercial sense has come into being. A motor and chassis on wheels is an incomplete motor vehicle. It cannot be employed for the purpose for which motor vehicles are normally intended. It needs something more to complete it, and that something is an appropriate body mounted and fitted on the chassis.”
14. In the same volume of the STC, there is a decision of the Bombay High Court in Commissioner of Sales Tax v. Voltas Limited [1968] 22 STC 185. The Bench pointed out that even though the crawler is propelled by a motor which is undoubtedly the feature of the machine, that by itself would not make it a motor vehicle in the sense in which the particular entry involved therein had to be understood.
15. The Andhra Pradesh High Court held in Pothula Subba Rao v. State of A.P. [1972] 30 STC 69 that the bodies of the motor vehicle were parts of components of motor vehicles. The decision was in the context of the levy of tax on works contract.
16. At page 75, the Bench in clear terms pointed out that a chassis of a motor vehicle cannot be itself be said to be a vehicle. A vehicle is a means of conveyance or transmission. It is the combination of the chassis and the body that makes it a vehicle.
17. A decision of the Goa Bench of the Bombay High Court was relied upon to contend that the definition of the “motor vehicle” in the Motor Vehicles Act should not be relied upon to construe the terms in the Act.
18. In Leukoplast (India) Ltd. v. State of Goa [1988] 71 STC 180 (Bom) actually the Bench relied upon the meaning given to the subject-matter in the Drugs and Cosmetics Act to construe the meaning of the said subject in the sales tax law, because, the Drugs and Cosmetics Act is a comprehensive legislation concerning the subjects covered by the said law. The Bench also pointed out that there is no absolute principle of law that the meaning given in one statute to a word cannot be relied upon while construing another legislation.
19. The decision of the Supreme Court in Porritts & Spencer (Asia) Ltd. v. State of Haryana reiterates the principle that in a taxing statute words of everyday use must be construed not in their scientific or technical sense, but as understood in common parlance. In other words, the sense which people, conversant with the subject-matter with which a statute is dealing, would attribute to the subject, should have to be accepted as the true meaning.
20. At page 437, the court also pointed out that the use to which the subject-matter may be put is immaterial. The said decision was considering whether “dryer felts” was a textile ?
21. It is unnecessary to multiply the citations, because, the relevant principle has been stated in Porritts’ case which has been reiterated in other subsequent decisions. The problem if at all is the problem of applying the principle to the particular set of facts.
22. Shenbaga Nadar and P. V. P. Balasubramania Nadar v. State of Madras [1973] 31 STC 81 (Mad.) was referred to in support of the contention that if the Government and other authorities understood the meaning of a term in a particular manner for several years, then the said meaning should be given to the relevant words.
23. At page 84, the Bench of the Madras High Court stated as follows :
“The above statement of objects and reasons clearly indicates that the Government has all along proceeded on the basis that but for the amendment, the bodies built on chassis cannot be brought under item 3 and that the taxation authorities have been taxing such bodies built on chassis only at multi-point and at 2 per cent. This shows how the Government understood the provision in item 3 of Schedule I prior to its amendment. Though the interpretation placed by the Government on a statutory provision like item 3 is not conclusive, still it serves as an effective guide to a proper interpretation of item 3. As pointed out by Bernard Schwartz in his ‘Introduction to American Administrative Law’, Second Edition, at page 54 :
“Administrative interpretations are in most cases accepted as final. Those affected will normally conform to them, for they serve as the guides to administrative action. In America, indeed, they tend to acquire all but statutory effect because of the great deference which the courts normally pay to them, where the governing legislation is not wholly clear. As stated by the Supreme Court, “it is the settled rule that the practical interpretation of an ambiguous or doubtful statute that has been acted upon by official charged with its administration will not be disturbed except for weighty reasons”.’
The above passage makes it clear that the interpretation placed on a statutory provision by the Government cannot altogether be ignored, and this is the view taken by the Bench of this Court in Simpson & Company Ltd. v. State of Madras [1969] 23 STC 374.”
24. The assessees contended before us that all along the authorities understood TPC frames as motor vehicles and the said meaning therefore should continue to govern the subject. We do not find any such meaning given by the Government or its officers all along. A few assessing authorities might have wrongly interpreted the term. But, that cannot be given effect to by the court, which will result in frustrating the meaning attributed by the legislation. There is also no material to apply the doctrine of contemporanea expositio. Hence, it is unnecessary to refer the the several decisions cited in connection with the said doctrine.
25. A few decisions were cited to show that dictionaries cannot dictate always the meaning to be given to the words and the meaning of the word should be understood having regard to the context of the particular legislation or the context in which the particular words are used. There can be no two opinion about this proposition.
26. A decision of this High Court in Sri Veerarajendra Corporation v. State of Karnataka [1985] 58 STC 199 was cited to contend that assessment orders accepted as correct for several years, should not be allowed to be interfered with. In the instant cases before us, the assessment orders are sought to be revised within the period of limitation and there is no scope to apply the aforesaid principle.
27. The learned counsel for the assessees referred to a few more dictionaries including a different edition of Websters Dictionary. But in the circumstances of this case, we do not think it necessary to burden this judgment by referring to them.
28. The meaning of a term used in the sales tax law, describing the subject of the levy, is to be understood in the manner in which persons conversant with that subject-matter understand it; this is the meaning in its popular sense. At the same time, courts shall have to examine the provisions of the Act to find out whether a particular meaning is discernible.
29. Several decisions cited before us concerning the levy on bodies of motor vehicles, describe the activity of body building as the one built on the “chassis”; this “chassis” necessarily includes the engine. This is a strong indication as to how the chassis-frame fitted with the engine has, all along been described; it is described as “chassis” or “chassis of a motor vehicle”. The “frame” by itself is not referred to as the “chassis”.
30. The scheme of the Act and its several provisions requires a harmonious treatment; as far as possible, the descriptive word or the nomenclature indicating an item for taxation, should have the same meaning in the Act (unless context requires a different meaning).
31. Item 18 of the Sixth Schedule refers to “construction of bodies of motor vehicles and construction of trailers”. As per section 5B of the Act, every dealer shall pay a tax on this taxable turnover of transfer of property in goods involved in the execution of works contract mentioned in the Sixth Schedule, at the rate stated in the said Schedule.
32. Under section 5C, a tax is levied on the turnover of a dealer in respect of the transfer of the right to use any goods mentioned in column (2) of the Seventh Schedule. This provision covers leasing of goods which is quite in vogue now. Item 1 of this Schedule mentions “motor vehicles including motor cars …… etc., etc.” (as in entry 70 of the old Second Schedule); Item 2 mentions “chassis of motor vehicles.” If the petitioners’ contention as to the meaning of the term “chassis” is accepted then, this item 2 has to be confined to the actual “chassis-frame”; but, we have not come across any case of leasing of chassis-frame only; the prevalent practice is to lease chassis-frame fitted with the engine (TPC frame), so that lessee may build appropriate body on the said chassis to suit his purposes. We cannot assume that item 2 of the Seventh Schedule was enacted without any purpose. According to the petitioners, TPC frame will be covered by item 1 itself; but we are concerned with the actual concept of the 2nd item of the Seventh Schedule; the said item must have been included in the Schedule because the Legislature thought it fit to levy tax on the “hire charges” of certain goods, which are normally leased out; when “chassis-frame” is not a subject of lease, item 2 could not have been thought of describing the said non-leased article.
33. Entry 71 of the old Second Schedule mentions “chassis of motor vehicles”; while entry 71-A refers to “bodies built on motor vehicle chassis”. Bodies are not built on the mere chassis-frames; body is built only on TPC frame. If the said article is already a motor vehicle, Legislature would have referred to “bodies built on a motor vehicle” in entry 71-A. Entry 73 of this Schedule refers to “articles used generally as parts and accessories of motor vehicles”. A chassis-frame by itself will be a part of of the motor vehicle. Argument based on the expansive language of entry 70, does not advance a conclusive test. It is true that entry 70 mentions – “motor vehicles including motor car, motor taxi cabs, motor cycles and cycle combinations, motor scooters, motorettes, motor omnibuses, motor vans and motor lorries”. Here expansive phraseology adopted by using the word “including” in entry 70 was an unnecessary exercise; because, all the descriptive words or the nomenclatures referred to after the said word “including” in entry 70 are redundant; these descriptive words or nomenclatures state the obvious. It does not require any expansive phraseology to tell that the term “motor vehicles” would refer to a taxi-cab, a motor lorry or an omnibus, etc. Legislature must have though of being over-cautions when it used the word “including” to rope in the several vehicles in the concept of “motor vehicle”, when, actually without the said expansion, these vehicles would be covered by the main description. If actually the meaning given to the term in Motor Vehicles Act (as per section 2 of the said Act) has to govern the word “motor vehicles” in entry 70, purpose of the Legislature would have been met by simply mentioning in entry 71 “motor vehicles as defined in section 2 of the Motor Vehicles Act”. Under entry 71, rate of tax was 15 per cent between April 1, 1974 and March 31, 1983 and the rate was 12 per cent between April 1, 1983 and March 31, 1986.
34. Therefore, if the petitioners paid tax at the rate of 15 per cent between April 1, 1974 and March 31, 1983, it cannot be said that, the payment was only by reference to entry 71; it may have been by reference to entry 70 also.
35. However it is unnecessary to investigate as to how the petitioners treated the subject. We are here concerned with the meaning attributable to the subject of the levy and there is no scope to apply any principle of equity.
36. A vehicle is a medium; it is to convey something else, other than itself exclusively. Only because chassis-frame fitted with an engine is capable of movement, by the force of motor, it cannot be called a vehicle; this equipment can move; it is meant to transport itself and it is not meant to be an agent of transmission or transporting at all; no principal object is carried in it; it is not used as a means to carry anything else. That equipment requires to be further equipped with a body, at least, in the nature of a plank fitted on the chassis-frame, so that it can be used as a means of transporting something; until this is done, the equipment can be at the most called an incomplete motor vehicle, for the sake of convenience.
37. The fact that this equipment is capable of being used as a means of transport in a theoretical sense, is no ground to elevate its status to that of a motor vehicle. “The particular use to which an article can be applied in the hands of a special consumer is not determinative of the nature of goods” – vide : Mukesh Kumar Aggarwal & Co. v. State of Madhya Pradesh . In the said case of Mukeshkumar Aggarwal & Co. the Supreme Court pointed out the distinction between “timber” as understood in its popular sense and distinguished it from “wood-heaps”, because, “timber” is meant or is to be fit for building purposes, though earlier, at one stage, the court pointed out that the “user test” is logical; but is again inconclusive”.
38. Having regard to the entries in several Schedules to the Act we are of the view that the term “chassis of motor vehicle” has to be understood so as to include TPC frames. TPC frames are not meant to convey mean or carry goods; they are not used as means of transport and, therefore, they cannot be considered as “motor vehicles”.
39. It was contended that if “TPC frame” is not considered as a “motor vehicle”, the subsequent sales by the assessees in these cases (of motor vehicles with bodies built on the TPC frame) should be bifurcated into as sales of TPC frames and bodies of motor vehicles, so that, to the extent of the value of TPC frames, tax may not be levied. In other words, the purpose behind the single point levy of sales tax contemplated by section 5(3) can be properly effectuated (and realised) by deeming the sale of motor vehicle as a composite sale of its TPC frame and body built thereon. To the extent of the sale of the body only, it will be the first sale, attracting levy under entry 71-A.
40. A decision of the Madhya Pradesh High Court in Bharat Saw Mills v. Commissioner of Sales Tax (printed at page 584 infra); (1987) 21 STL 164 was relied upon by Sri Indrakumar, in support of his proposition. The observations at page 166 are :
“In the present case the assessee had purchased a chassis for Rs. 52,000 and then built wooden body costing Rs. 6,255.41. Obviously, the wooden body was fixed with nut and bolts and could be dismantled at any time and the identity of the chassis is not at all altered so that a new vehicle altogether came into being. Therefore, sales tax was already paid while purchasing the chassis from the registered dealer under section 2(r)(ii). Taxable turnover in relation to any period means that part of the dealer’s turnover for such period which remains after deducting therefrom (i) sale price of goods declared tax-free under section 10 or 12 and (ii) sale price of goods mentioned in Parts II to VI of Schedule II which are in the nature of tax-paid goods in the hands of such dealers. Obviously, the truck chassis was tax-paid goods and when it was resold the assessee is entitled to deduct the price of the chassis from the taxable turnover. Under the circumstances, only the cost of building wooden body amounting to Rs. 6,255.41 with depreciation alone is liable to be included in the taxable turnover.”
41. Mr. Sarangan referred to the observations of the Supreme Court in Commissioner of Income-tax v. J. H. Gotla and pointed out that “though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such consideration should be preferred to the literal construction”.
42. We are of the view that in the face of the language employed by the Act, there is no scope to apply the above principle. The assessees purchased TPC frames and built bodies on them; used the vehicles for their own purposes. The vehicles sold by the assessees were, all old vehicles. In the very nature of these vehicles, their different parts may not have distinct, usable, independent identities. The theoretical possibility that the vehicle could have been dismantled into (i) “TPC frame” and (ii) “the body” before selling them ignores the commercial realities. A purchaser very rarely purchases a vehicle treating it as a federation of two articles; the purchaser purchases the vehicle, as a single, integrated, identifiable article. The assessees had the benefit of using the vehicles in their business; admittedly the price fetched by each of the motor vehicle, when sold, was much lower than the cost of acquiring the TPC frame and the body built thereon. There is not a single instance of a higher price being fetched in these cases, on sales of those old vehicles.
43. The alleged hardship is of short duration; Legislature has obviously taken note of the need to levy a lower rate of tax on the chassis from April 1, 1983. The rate of tax was far lower than the rates under entries 70 and 71.
44. If the Legislature intended to give due credit to the tax levied on the chassis, while levying tax on the motor vehicle, a suitable, specific provision would have been made either under rule 6 (of the Karnataka Sales Tax Rules, 1957) or in the very Second Schedule. For example, explanation I to the Fourth Schedule provides for reduction of the tax on the rice, to the extent of the tax paid already on the paddy from which the rice is produced. Explanation III to the old Second Schedule provides for giving credit to the tax paid on the purchase of coffee seeds, while levying tax on the sale of coffee powder. Same idea of giving credit to the tax paid on the cashew, while levying tax on cashew kernel is found in explanation VI.
45. It is not for the court to introduce such an “explanation” in the case of “motor vehicles” by bifurcating the sale of a motor vehicle into two sales as contended by Sri Indrakumar.
46. The decision of the Madhya Pradesh High Court probably, rested on the relevant provisions of the Madhya Pradesh sales tax law. If the facts warrant the granting of any relief to any of the assessees on the ground of hardship, it is for the State Government or the Commissioner of Sales Tax to consider the individual cases appropriately. It is entirely for the Government or the Commissioner to consider the individual cases.
47. In the result, for the reasons stated above S.T.R.P. No. 16 of 1993 filed by the State is allowed; other petitions (S.T.R.P. No. 35 of 1989 and W.P. Nos. 17296 to 17298 of 1989) are dismissed; parties to bear their respective costs. Rule discharged in the writ petitions.