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State of Orissa Vs. Sohanlal Lakshminarayan - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtOrissa High Court
Decided On
Case Number S.J.C. Nos. 197 and 198 of 1972
Judge
Reported in40(1974)CLT948; [1975]35STC118(Orissa)
AppellantState of Orissa
RespondentSohanlal Lakshminarayan
Appellant Advocate The Standing Counsel (Sales Tax)
Respondent Advocate S.C. Mohapatra, Adv.
Cases ReferredLucknow v. Chandok Traders
Excerpt:
.....statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot be entertained i.e. cannot be admitted for consideration unless the statutory deposit is made and for this purpose the..........party) deals in sugarcane crushers. the sales tax officer and the assistant commissioner of sales tax held that sugarcane crushers constitute machinery and as such are exigible to sales tax at 7 per cent as per entry no. 60 of taxable goods. the tribunal in second appeal held that sugarcane crusher should not be treated as machinery. three small iron rollers fixed close to one another to crush sugarcane are operated not through power but are driven by animals. the mechanism is known as sugarcane crusher. the tribunal came to the conclusion that sugarcane crushers do not constitute machinery and are liable to tax at 5 per cent. the extra demand of 2 per cent was accordingly reduced. aggrieved by this order, the commissioner of sales tax (petitioner) asked for a reference which was.....
Judgment:

G.K. Misra, C.J.

1. The assessment years are 1965-66 and 1966-67. The dealer (opposite party) deals in sugarcane crushers. The Sales Tax Officer and the Assistant Commissioner of Sales Tax held that sugarcane crushers constitute machinery and as such are exigible to sales tax at 7 per cent as per entry No. 60 of taxable goods. The Tribunal in second appeal held that sugarcane crusher should not be treated as machinery. Three small iron rollers fixed close to one another to crush sugarcane are operated not through power but are driven by animals. The mechanism is known as sugarcane crusher. The Tribunal came to the conclusion that sugarcane crushers do not constitute machinery and are liable to tax at 5 per cent. The extra demand of 2 per cent was accordingly reduced. Aggrieved by this order, the Commissioner of Sales Tax (petitioner) asked for a reference which was rejected on 28th March, 1972. The petitioner approached the High Court for a reference. This court called for a statement of the case. The Tribunal has made a reference of the following question;

Whether, on the facts and in the circumstances of the case, sugarcane crusher or sugarcane crushing mill is not a type of machinery to come within entry No. 60 of the taxable list ?

2. The sole question for consideration is whether sugarcane crushers come within the definition of 'machinery' within the ambit of entry No. 60 of the taxable list which runs thus :

----------------------------------------------------------------------------SI. No. Description of Goods Rate of tax1 2 3----------------------------------------------------------------------------60 All machinery and spare parts Seven per cent.and accessories thereof.----------------------------------------------------------------------------

3. The word 'machinery' has not been defined in the Orissa Sales Tax Act, 1947. Its meaning must be ascertained as used in common parlance.

4. In Corporation of Calcutta v. The Chairman of the Cossipore and Chitpore Municipality A.I.R. 1922 P.C. 27, their Lordships had to examine the meaning of this expression under Section 101 of the Bengal Municipal Act, 1884. The relevant provision was as follows :.Provided further that in estimating the annual value of a holding under this section, the value of any machinery that may be on such holding shall not be taken into consideration.

After thorough discussion the following conclusion was reached:

Their Lordships concur with Lord Davey in thinking that there is great danger in attempting to give a definition of the word 'machinery' which will be applicable in all cases. It may be impossible to succeed in such an attempt. If their Lordships were obliged to run the hazard of the attempt they would be inclined to say that the word 'machinery' when used in ordinary language, prima facie, means some mechanical contrivances which, by themselves or in combination with one or more other mechanical contrivances, by the combined movement and interdependent operation of their respective parts generate power, or evoke, modify, apply or direct natural forces with the object in each case of effecting so definite and specific a result. The tank and its supporting structure do not satisfy this definition.

But their Lordships think that however skilful definitions of 'machinery' may be framed, the determination in any given case of what is or is not 'machinery' must, to a large extent, depend upon the special facts of that case....

This definition of 'machinery' given by the Judicial Committee has been consistently followed throughout and a single decision has not been brought to our notice taking a different view. In that particular case the subject-matter of discussion was whether a balancing tank with a supporting structure would come within the definition of 'machinery'. Their Lordships did not accept the same as to fall within the meaning.

4. In D.B. Bhandari v. State of Mysore [1967] 20 S.T.C. 25, a Division Bench of the Mysore High Court followed the aforesaid dictum and expressed it somewhat differently which is instructive. Their Lordships said :

In simpler language 'machinery' is a contrivance whereby several things are put together to work in such a way that force may be applied at a most convenient point in a most convenient way to get a particular work or an item of work done or to produce a specific article or manufactured goods.

If this is the essential feature of a machinery which distinguishes it from other things, the mode or the manner in which power is fed into it or force is applied, need not and should not make any difference. It is conceded, for example, that a machinery would be a machinery whether it is fed by electrical power or other form of power applied by steam or generated by burning combustible oils. If the mode or the manner in which the power is applied makes no difference in these specified cases, it should make no difference if the source of power is either human or animal.

We accept the aforesaid reasoning. In that case their Lordships held that handlooms are machinery.

5. The same view has been taken by a Bench of the Gujarat High Court in I.M.M. Pvt. Ltd. v. State of Gujarat [1965] 16 S.T.C. 380, wherein their Lordships held that humidifiers used by cotton textile mills in order to maintain certain humidity for the purpose of increasing the strength of yarn, avoiding breakages of yarn and improving the quality of yarn, are machinery.

In State of Mysore v. M.N.V. Rao [1964] 15 S.T.C. 540, on the analogous reasoning a Bench of the Mysore High Court held that 'cottage basin' used in the silk industry for spinning and reeling silk is a machinery.

In Commissioner of Income-tax, Madras v. Mir Mohammad Ali [1964] 53 I.T.R. 165 (S.C.), their Lordships followed the definition of machinery as enunciated by the Judicial Committee and held that new diesel engines replacing petrol engines in some of the motor buses constitute 'machinery' within the meaning of Section 10 of the Income-tax Act, 1922.

In State of Gujarat v. Gujarat Engineering Company [1974] 33 S.T.C. 302 (Guj.), it was held that oil engines and spare parts thereof would fall within the meaning of 'machinery'.

In Commissioner, Sales Tax, U. P., Lucknow v. Chandok Traders [1973] 32 S.T.C. 614 (All.), hair clipper was held as coming within the definition of 'machinery'.

It would thus be seen that the dictum of the Judicial Committee has been consistently followed as to the meaning of 'machinery' to be used in common parlance.

6. In the case of sugarcane crushers, fixing of three iron rollers close to one another is a contrivance and through this contrivance juice is obtained by crushing sugarcane. It is immaterial whether the crusher is worked upon by power, human labour, bullock or any other animal.

7. On the aforesaid analysis, we would answer the question in the affirmative by saying that sugarcane crusher or sugarcane crushing mill is a type of machinery and comes within entry 60 of the taxable list.

8. In the result, the reference is accepted; but in the circumstances, there will be no order as to costs.

B.K. Ray, J.

9. I agree.


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