M/S KUMAR MOTORS, BAREILLY versus COMMISSIONER OF SALES TAX, U.P. LUCKNOW

Citation: [2007] 2 S.C.R. 174 · Decided: 02-02-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
M/S KUMAR MOTORS, BA REILLY 
v. 
COMMISSIONER OF SALES TAX, U.P. LUCKNOW 
FEBRUARY 2, 2007 
[S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
U.P. Sales Tax Act, 1948-ss. 2 (e-1) and 3-AAAA-Purchase tax-Sale 
of Auto Rickshaw after mounting the body on the chasis thereof-Liability 
C to purchase tax-Held: Sales made by the assessee of chasis with mounted 
body would be a selling product which is in different condition from the 
chasis or the body and hence liable to purchase tax-U.P. Sales Tax Rules, 
1948-r. l 2-A. 
D 
E 
Interpretation of Statutes-Provisions of statutes-Interpretation of-
Held: While interpreting provisions of a statute, Court is required to 
give a literal meaning to the expression used by legislature. 
Taxing Statute-Interpretation of-Held: In construing a taxing Statute, , 
vis-a-vis the taxable event, no hypothesis ordinarily should be raised. 
. 
Words and Phrases: 
'Manufacture'-Meaning of in the context of U.P. Sales Tax Act, 1948. 
The question for consideration in the present appeal was whether 
F mounting of the body of the Auto Rickshaw on the Chasis thereof would 
amount to 'manufacture' within the meaning of section 2 (e-1) ofU.P. Sales 
Tax Act, 1948 and thus whether such manufacturer was liable to pay purchase 
tax on the sale thereof. 
G 
H 
Dismissing the appeal, the Court 
HELD: 1. The sales made by the assessee of chassis with mounted body 
would be selling a product which is in different condition from the chassis or 
the body, and, thus, the same would be liable to purchase tax under sub-section 
(a) of Section 3-AAAA of the Act. (Para 13] (179-DI 
174 
~· 
KUMAR MOTORS. BAREILLY '· COMMNR. OF SALES TAY., U.P. LUCKNOW 
175 
~r-
2. It is not in dispute that the appellant sold Auto Rickshaw after the A 
body was mounted on the chassis with the help of nuts and bolts. The meaning 
of 'manufacture' in terms of the statutory provision is of wide amplitude. It 
takes within its sweep not only a new product but also alterations made in an 
existing product. 'Auto Rickshaw' in ordinary commercial parlance cannot 
be said to be its body or chassis. It has a definite connotation. [Para 11) 
B 
[178-H; 179-A) 
3. A commodity is identified by ordinary commercial parlance. Auto 
rickshaw is an auto rickshaw. It can be sold only as a combination of chassis 
~ 
and the body mounted thereupon, and not body or chassis separately. If it is 
so done, consequences may be different. (Para 15) ( 179-G) 
c 
4. The Tribunal also opined that by mounting auto rickshaw body on the 
chassis a new product comes into being. However, it had proceeded to hold 
that both chassis and auto rickshaw being under the same entry no tax would 
be payable. The Tribunal was not correct in that behalf as it failed to take 
into consideration the fact that if two articles were purchased by the assessee D 
and the articles it sold were different commodities; purchase tax would be 
payable therefor as the terms and conditions laid down in Form 3-A had not 
been satisfied. [Para 22] (183-E] 
~ 
5. The Court is required to give a literal meaning to the expression 
used by the Legislature, while interpreting the provisions of a statute. In terms E 
of Form III-A, a trader would be exempted from payment of purchase tax only 
in the event the terms and conditions thereof are satisfied. Necessary condition 
for obtaining such exemption is that the assessee must sell the commodity it 
purchased in the same form and condition. (Para 13) [ 179-C) 
6. Tax is payable when the taxable event occurs. In construing a taxing F 
statute, vis-a-vis, the taxable event, no hypothesis ordinarily should be raised. 
(Para 141 
Commercial Tax Officer, Anti Evasion-I v. Rajesh Motors and Anr., 
(1997) 107 468, disapproved. 
G 
Dy. Commissioner of Sales Tax (Law) Board of Revenue (Taxes), 
Ernakulam v. Mis. Pio Food Packers (1980) Suppl. SCC 174; Mis. Stre/ing 
-t 
Foods. Partnership film represented by its partner Sh. Amesh Dalpatram v. 
State of Karnataka and Anr., (1986] 3 SCC 469, distinguished. 
Sonebhadra Fuels v. Commissioner, Trade Tax, U.P. Lucknow, [2006) 7 H 
176 
SUPREME COURT REPORTS 
(2007] 2 S.C.R. 
A SCC 322; State of Karnataka v. Azad Coach Builders (P) Ltd. and Ors., (2006) 
3 SCC 338; Kores India ltd, Chennai v. Commissioner of Central Excise, 
Chennai, (200S I 1 SCC 38S; O.K. Play (India) Ltd. v. Commissioner of 
Central Excise-II, New Delhi, [200S) 2 SCC SSS, referred to 
B 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 427 of2007
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