Bombay High Court
Municipal Corporation Of Greater ... vs Blue Stars Ltd., Bombay on 22 June, 1994
Equivalent citations: AIR1995BOM38, 1995(1)BOMCR124, (1994)96BOMLR633, 1995(1)MHLJ476, AIR 1995 BOMBAY 38, (1995) 1 MAH LJ 476 (1995) 1 BOM CR 124, (1995) 1 BOM CR 124
JUDGMENT
1. The Municipal Corporation of Greater Bombay has preferred this appeal against order dated 14th February, 1978, passed by the learned Additional Chief Judge of Court of Small Causes at Bombay in Municipal Appeal No. 288 of 1977. By the said order, the learned Additional Chief Judge has directed Municipal Corporation of Greater Bombay to charge Octroi on compressors in question at 2% ad valorem under Item 50 of Schedule-H appended to the Bombay Municipal Corporation Act and refund the amount of Rs. 269.75 to Blue Star Limited, appellants in Municipal Appeal No. 288 of 1977.
2. Blue Star Limited deals inter alia in refrigerators and spares, water coolers, air-conditioners and spares etc. The Blue Star Limited is hereinafter referred to as the respondents. On or about 16th June, 1977, the Municipal Corporation collected from the respondents Octroi at 4% ad valorem on three cases of compressors under their Receipt No. 90867 amounting to Rs. 593.50. The compressors in question are open type compressors and are part of an air cooling plant. The open type compressors used for the purpose of air cooling plant are nothing but machinery as indicated below.
3. Section 192 of Bombay Municipal Corporation Act, 1888 empowers the Municipal Corporation to levy Octroi on the articles mentioned in Schedule-H appended to the said Act at the rate specified therein. Item No. 50 of Schedule-H to the said Act reads as under:--
"Item No. 50 --
Machinery and their components and spares -- (a)(i) electric machinery for generation, transmission and distribution and motors and generators and their components and spares, (ii) electric goods including cells, batteries and copper trips, horn electric, (iii) electrical fillings and materials, (iv) electrical domestic appliances, (v) electrical machinery of all kinds, control switch gear, generators, alternators and dynamos, motors, transformers and turbo generating sets,
(b) agricultural machinery and parts, (c) oil engines, diesel engines, steam engines, patrol and gas engines and machines worked by hydrolic pressure and their parts, (d) tools of all kinds, (e) printing press machines and spares, (f) any other machinery, its components and spares not specifically provided for;"
"Item No. 52 --
Instruments, apparatus and appliances and parts thereof --
(a) sewing machines, clocks and watches and typewriters and their spares, (b) radio, radio-grams, television set or apparatus, loud-speakers, gramophones, amplifires, wireless goods, their components and spares,
(c) photographic machinery, photo goods and materials including photographic chemicals, films and mounts and their component and spares, (d) cine projection machinery, their components, spares and materials used therein, (e) surveying apparatus, (f) scientific appliances, (g) optical goods, their spares and accessories, surgical instruments and hospital requirements, including their spares and accessories, (h) mill and gin stores including crucibles, cotton ropes and (i) all kinds of apparatus, appliances and spares."
4. The Municipal Corporation contends that "the open type compressors" in question though part of air cooling plant are liable to be classified as "apparatus" and subjected to payment of Octroi Duty under Item 52 of Schedule-H. The respondent assessee contends that open type compressors in question are liable to be classified as "machinery" and liable to be subjected to payment of Octroi under Item 50 of the said Schedule. Even components and spares of machinery fall under Item 50 of the Schedule.
5. On behalf of the respondents herein, one Jugalkishore Nathmal Pallod gave evidence before the trial Court. The said witness is B.E. (Mech.) and is an expert witness. The said witness clearly deposed in his evidence to the effect that the open type compressors in question were used by the assessee in air conditioner and refrigeration installations as part thereof and that the compressors in question were liable to be treated as "machinery" by themselves. The said witness was cross-examined on behalf of Municipal Corporation at length. The said witness denied that air-conditioner was an apparatus and not a machine. The said witness denied that a compressor was an apparatus or a part of apparatus and not a machine. One Janardhan Vithoba Mali was examined as an expert fitness on behalf of Municipal Corporation of Greater Bombay. The said witness stated in his testimony that the air-conditioning plant taken as a whole was liable to be classified as an apparatus. The said witness further stated in his testimony that similarly refrigerator plant was also liable to be classified as an apparatus. The said witness stated that the compressors in question were also liable to be classified as "apparatus".
6. The learned Additional Chief Judge by his well considered order dated 14th February, 1978 held that the air cooling plant could not be "classified" as an apparatus and the compressor also could not be so treated. The learned Additional Chief Judge reached the conclusion that air cooling plants were liable to be classified as "machines" and the compressors forming part of such plant were also liable to be so classified falling under Item No. 50. The learned Additional Chief Judge also observed in the passing that if two interpretations of Entry 50 and Entry 52 forming part of Schedule-H appended to the said Act were reasonably possible, then the Court has to lean in favour of the interpretation which will help the tax payers. Of this aspect, the learned Additional Chief Judge relied on the observations made by this Court in the case of Ambika Silk Mills, . The learned counsel for Municipal Corporation has very fairly invited attention of this Court to recent judgments of this Court having some baring on the question under consideration. In Kelvinator of India Limited v. P. B. Mhaskar, Dy. Assessor and Collector (Octroi) of Municipal Corporation of Greater Bombay, i.e., Writ Petition No. 1338 of 1979, Pendse, J. dealt with the question as to whether the refrigerators and deep Freezers were liable to be classified as machinery under Item 50 of Schedule-H of the said Schedule or whether the same was liable to be treated as "apparatus" under Item 52 of the said Schedule appended to the said Act. After relying on the ratio of the decision of the Privy Council in the case of Corporation of Calcutta v. Chairman of the Cossipore and Chitpore Municipality, Judge held AIR 1922 PC 27, the learned Judge held that the Refrigerators and Deep Freezers were liable to be classified as machinery falling under Item 50 of Schedule-H. In my opinion, this decision is helpful to the respondents. If the principle of this decision is to be applied to this case as it ought to be, it must be held that the Air Cooling Plant is also liable to be classified as machinery falling under Item 50 of Schedule-H. The learned counsel for the Municipal Corporation has also fairly invited attention of the Court to the Division Bench judgment of this Court consisting of Mohta and Saraf, JJ. in Appeal No. 646 of 1986 arising from Writ Petition No. 660 of 1982. The said judgment was delivered by the Division Bench of this Court on 5th March, 1992 in the case of Voltas Limited. In this appeal, the Division Bench of this Court held that package type air conditioners were liable to be classified under Item 50 of Schedule-H to the Act as machinery and not as apparatus under Item 52 of the Schedule appended to the said Act. The ratio of this judgment is also helpful to the learned counsel for the respondents who is supporting the judgment of the learned Additional Chief Judge.
7. The learned counsel for Municipal Corporation had argued before the trial Court in turns air cooling plants should be treated as an apparatus and the compressor though a machine should also be treated as apparatus falling under Item 52 of the Schedule. The learned counsel for the Corporation appearing in this appeal has advanced the same arguments while assailing the judgment under appeal. The said submissions are not correct. I am not convinced with the correctness of submissions made by the learned counsel for the Corporation particularly in view of ratio of the judgments of our Court referred to hereinabove and also in view of the clear testimony of the expert witness Shri Jugalkishor Pallod, examined on behalf of the assessee which I accept. I have no hesitation in confirming the findings arrived at by the learned Additional Chief Judge contained in his order dated 14th February, 1978 in Municipal Appeal No. 288 of 1977. I accept the submissions made by the learned counsel for the respondent and hold that there is no merit in this appeal.
8. In the result, appeal fails. The appeal is dismissed. Having regard to the facts and circumstances of the case, there shall be no order as to costs.
Appeal dismissed.