Bombay High Court
Electro Enterprises vs Commissioner Of Sales Tax, Maharashtra ... on 27 January, 1995
Author: D.K. Trivedi
Bench: D.K. Trivedi
JUDGMENT Dr. B.P. Saraf, J.
1. By this reference under section 61(1) of the Bombay Sales Tax Act, 1959, made at the instance of the assessee, the Maharashtra Sales Tax Tribunal has referred the following question of law to this Court for opinion :
"Whether the pumps coupled with electric motors and mono-block pump sets sold by the applicant to the agriculturists for agricultural purposes are covered by entry C-I-18(i) or C-II-102 or C-II-44(b) of the Bombay Sales Tax Act, 1959 ?"
2. The assessee, who is a registered dealer under the Bombay Sales Tax Act, 1959 ("the Act"), carries on the business of buying and selling pumps coupled with electric motors and mono block pump sets. In its returns for the period July 1, 1981 to October 27, 1981, the assessee showed the turnover of sales of electric motors and mono block pump sets as turnover of sales of "agricultural machinery" falling under entry 18(i) of Part I of Schedule C to the Act, subject to levy of sales tax at the rate of two paise in a rupee by virtue of entry 117 of the notification issued by the State Government under section 41 of the Act. The Sales Tax Officer did not agree with the assessee. According to him, electrical pumping sets were electrical appliances falling under entry 44(b) of Part II of Schedule C, the sales of which were subject to tax at the rate of 10 paise in the rupee. Against the above order of the Sales Tax Officer, the assessee appealed to the Assistant Commissioner of Sales Tax (Appeals), Nasik Division, Nasik, who dismissed the appeal and confirmed the order of the Sales Tax Officer. The assessee went in further appeal to the Maharashtra Sales Tax Tribunal ("the Tribunal"). The contention of the assessee before the Tribunal was that the pumping sets sold by it were covered by entry 18(i) of Part I of Schedule C to the Act. In the alternative, it was contended that if they were held not to be covered by that entry, they would fall under the residuary entry, entry 102 of Part II of Schedule C. According to the assessee, in no event would these items fall under entry 44(b) of Part II of Schedule C as held by the Sales Tax Officer. The Tribunal perused entry 18(i) of Part I of Schedule C (as it stood on and from July 1, 1981) and observed that the items "electrical motors and electrical pump sets" having been specifically excluded, they would not fall under that entry. The Tribunal held that the pump sots sold by the assessee, being worked on electricity, could be regarded as "electric appliances" falling under entry 44(b) of Part II of Schedule C. According to the Tribunal, pump sets were "appliances" and as they were operated by electricity, they could be treated as "electrical appliances" falling under entry 44(b) of Part II of Schedule C. Hence this reference at the instance of the assessee.
3. Mr. P. V. Surte, learned counsel for the assessee, submits that three entries of Schedule C are relevant for the purpose of deciding the controversy in this case, viz., entry 18(i) of Part I of Schedule C, entry 44(b) of Part II of Schedule C and entry 102 of Part II of Schedule C. According to him, electric motors and mono block pump sets sold by the assessee being agricultural machinery would fall under entry 18(i) of Part I of Schedule C. It was, however, fairly conceded that in view of the specific exclusion of "electric motors and pumping sets" from the purview of entry 18(i), it was not open to him to contend that the items in question would fall under that entry. According to him, there could hardly be any controversy about the fact that electrical pumping sets are "machinery" and not "instruments, apparatus or appliances". He, therefore, submits that electrical motors and pump sets which are basically "machinery" and primarily "agricultural machinery", cannot fall under entry 44(b) of Part II of Schedule C which applies to "electrical instruments, apparatus and appliances". They would more appropriately fall under the residuary entry, entry 102 of Part II of Schedule C. Our attention was also drawn to entry 44A of Part II of Schedule C, which was inserted with effect from May 1, 1982, and it was contended that this entry supports the contention of the assessee that electrical pump sets sold by it were not "electrical instruments, apparatus and appliances".
4. Mr. R. V. Desai, learned counsel for the Revenue, on the other hand, submits that electric motors, pumps and pumping sets sold by the assessee being operated by electricity should be treated as electrical instrument, apparatus or appliance. It was pointed out that the expression "instruments, apparatus and appliances" was wide enough to take within its sweep even items which are commonly known as machineries.
5. We have carefully considered the rival submissions. The relevant entries, at the material time, stood as below :
Entry 18 of Part I of Schedule C :
------------------------------------------------------------------------
Serial Description of goods Rate of sales Rate of No. tax purchase tax (1) (2) (3) (4)
------------------------------------------------------------------------
18 (i) Agricultural machinery Four paise Four paise
and implements other than in the rupee in the rupee
tractors, oil engines,
electric motors, pumps
and electric pumping sets
and implements specified
in entry 1 of Schedule A.
(ii) Components, parts and Four paise Four paise
accessories of agricultural in the rupee. in the rupee.
machinery and implements
other than components,
parts and accessories
of tractors, oil engines,
electric motors, pumps,
electric pumping sets
and implements specified
in entry 1 of Schedule A.
Entry 44(b) of Part II of Schedule C :
44(b) All electrical instruments, Ten paise Ten paise
apparatus and appliances in the rupee. in the rupee.
(other than electronic systems,
instruments, apparatus and
appliances specified in
entry 97 and electrical
appliances specified in
entry 73 in this Schedule)
Entry 102 of Part II of Schedule C :
102 All goods other than those Ten paise Ten paise
specified from time to in the rupee. in the rupee.
time, in the other Schedule
and the preceding entries
of this Schedule.
------------------------------------------------------------------------
From a reading of the above entries, it is clear that electrical pump set would not fall under entry 18(i) of Part I of Schedule C because of the specific exclusion contained therein. According to the Revenue, it falls under entry 44(b) of Part II of Schedule C. We are, therefore, to examine whether the items in question fall under this entry or not. If they fall under this entry, the sales thereof would be taxable at the rate of ten paise in a rupee. If not, they would fall under the residuary entry, entry 102 of Part II of Schedule C and sales thereof would be subject to tax at the rate of eight paise in a rupee.
6. Entry 44(b) of Part II of Schedule C deals with all electrical instruments, apparatus and appliances. The words "instruments", "apparatus" and "appliances" have not been defined in the Act. We are, therefore, to determine the true meaning and connotation thereof. For that purpose, it may be expedient to see first as to how these items have been defined in the dictionaries. In McGraw-Hill Dictionary of Scientific and Technical Terms (Third Edition), these expressions have been defined as follows :
instrument - (ENG) A device for measuring and sometimes also recording and controlling the value of a quantity under observation.
apparatus - (Sci. Tech.) A compound instrument designed to carry out a specific function.
appliance - A piece of equipment that draws electric or other energy and produces a desired work-saving or other result, such as an electric heater, a radio, or an electronic range.
In Corpus Juris Secundum (Volume 44), these words have been described as follows :
INSTRUMENT.
In General :
A generic word of general and inclusive import.
As indicated in the following sub-divisions, it has the ordinary or primary meaning of means, implement, or device, and a secondary technical meaning of document or writing.
Ordinary primary sense :
In this sense an instrument has been defined as meaning that by means of which something is done; one who, or that which, is made a means or caused to serve a purpose; the agent or means of anything; and, more specifically, the means, or the implement or tool, by which work is done; a material thing or mechanical device for performing work or producing an effect; a tool, utensil, or implement, especially an implement or mechanism for scientific or professional purposes, as distinguished from a device, tool, or machine for industrial use, also a tool used for any work or purpose .......
Mechanical instruments or implements :
Defined as meaning instruments the principal use of which is in the trades and arts, including, for example, the ordinary knife, as distinguished from the surgeon's knife; and, in a broader sense, as including instruments for practical use in the arts and professions, such as the instruments commonly used by surgeons, physicians, surveyors, and navigators, etc. Scientific instruments :
Two principal definitions have been given for this phrase, one considering the use of the instrument and the other the intrinsic character or nature as the determining factor. From the latter standpoint the phrase has been defined as any instrument which, in ordinary definition or in the acceptation of experts, would fall within that category, and it has been said that what is and such an instrument is to be determined according to the nature of the thing itself, and not necessarily according to the use for which it is primarily designed or in which it is primarily employed; and from the standpoint of use it has been defined as embracing such instruments as are specially designed for use, and principally employed, in any branch of science, either for the purpose of observation, experiment, or instruction, or in connection with the professional practice of a particular science.
In Chambers Twentieth Century Dictionary "instrument" and "apparatus" have been defined thus :
instrument - a tool or utensil : a contrivance for producing musical sounds .... a term generally employed to denote an indicating device but also other pieces of small electrical apparatus; (v.t.) to score for instruments : to equip with indicating, measuring, or control, etc., apparatus - adj.
for instruments : by means of instruments (as instrument flight).
apparatus - things prepared or provided, material : set of instruments, tools, natural organs, etc. : ........
Oxford Advanced Learner's Dictionary has described them thus :
instrument - 1. implement or apparatus used in performing an action, esp. for delicate or scientific work; a surgical instrument, eg., a scalpel, an optical instrument, eg., a microscope or instruments of torture; 2. apparatus for producing musical sounds, eg. a piano, violin, flute or drum; learning to play an instrument or the instruments of the orchestra. 3. measuring device giving information about the operation of an engine, etc., or in navigation; a ship's instruments of (attrib) an instrument panel ......
apparatus - 1. (a) set of instruments, etc., used esp. in scientific experiments; laboratory apparatus. (b) equipment used for doing sth. esp in gymnastics; ......
appliance - 1. instrument or device for a specific purpose; a kitchen full of electrical appliances, eg. a washing-machine, dish washer, liquidizer, etc .........
From the above definitions, it is clear that "instrument" is an implement or apparatus especially used for delicate or scientific works. It denotes surgical instruments, optical instruments, musical instruments, measuring devices and the like. The word "apparatus" denotes a set of instruments used for purposes like scientific experiments, e.g., laboratory apparatus. The word "appliance" is often used to denote kitchen appliances such as washing machine, dish washers. None of these items, either read independently or collectively, can be construed to mean what is commonly known as "plant" or "machinery". 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 or apply or direct natural forces with the object in each case of effecting so definite and specific a result. [See Corporation of Calcutta v. Chairman, Cossipore and Chitpore Municipality (1922) ILR 49 Cal 190 (PC)]. The word "machinery", therefore, must mean something more than a collection of ordinary tools [Commissioner of Income-tax v. Mir Mohammad Ali . It cannot be construed to mean mechanical instruments or implements of practical use in trades, professions, arts, navigation, survey, etc., even if in a strict technical and scientific sense it may be possible to do so. Moreover, the three words "instruments, apparatus and appliances" have been coupled together in entry 44(b), which goes to show that they are to be understood in their cognate sense. The words apparatus and appliances, though words of wide import, may be construed in the context of the preceding word "instrument", by applying the well-known rule of construction noscitur a sociis which means that the meaning of a word is to be judged by the company it keeps. Thus where two or more words which are susceptible of analogous meaning are coupled together, they are understood to be used in their cognate sense. In such a case, they take their colour from each other, the meaning of more general being restricted to a sense analogous to that of the less general. (See Maxwell on the Interpretation of Statutes.) So construed, the words apparatus and appliances would take their colour from the word instrument, which does not mean machinery or plant.
Machinery or plant, therefore, would not fall under entry 44(b) as they cannot be regarded as "electrical appliance" merely by reason of the fact that they are operated with the aid of electrical power.
7. This controversy may be looked at from a different angle also. The words "appliances" and "machineries" being words of day-to-day use, their popular or commercial parlance meaning has to be adopted as against their scientific or technical meaning because of the well-settled principle of interpretation that in taxing statutes, words of every day use must be construed not in the scientific or technical sense but as understood in common parlance. There does not appear to be any serious controversy about the fact that in trade or commercial parlance "machinery" is known as different and distinct from instruments, apparatus or appliances. Normally, instruments are small and sophisticated tools or implements used for scientific or professional purposes as distinguished from a device, tool or machine for industrial or agricultural use. It will be totally erroneous to hold all machineries operated by electricity as electrical appliance falling under entry 44(b) merely by reason of the fact that they are operated by electricity. There is a perceptible difference between "machinery" and instruments, apparatus and appliances and such distinction is well-known and well-accepted.
8. In view of the above discussion, we are of the clear opinion that the electric motors, pumps and pump sets sold by the assessee cannot be termed as electrical instruments, apparatus and appliances falling under entry 44(b) of Part II of Schedule C to the Act. That being so, they would fall under entry 102 of Part II of Schedule C to the Act and sales thereof would be taxable at the rate specified therein.
9. For the reasons set out above, we hold that the pumps coupled with electric motors and mono block pump sets, sold by the assessee, are covered by entry 102 of Part II of Schedule C to the Act and not by entry 18(i) of Part I of Schedule C or entry 44(b) of Part II of Schedule C to the Act.
10. Accordingly, the question referred to us is answered in the above terms in favour of the assessee and against the Revenue.
11. Under the facts and circumstances of the case, we make no order as to costs.
Reference answered accordingly.