1979 (2) TMI 178 - HC - VAT and Sales Tax

Summary

Issues:
1. Exemption claim for sale of centrifugal pumps as agricultural implements.
2. Interpretation of notification regarding exemption of agricultural implements.
3. Classification of pumpsets as agricultural implements.
4. Impact of amendment on exemption eligibility.

Analysis:
The case involved a dispute regarding the exemption claim for the sale of centrifugal pumps as agricultural implements. The assessee claimed exemption based on the intended agricultural use of the pumps. However, the assessing authority, Appellate Assistant Commissioner, and Tribunal rejected the claim, stating that centrifugal pumps were not classified as agricultural implements eligible for exemption under the relevant notification.

The notification in question, under section 17 of the Tamil Nadu General Sales Tax Act, initially exempted sales of agricultural implements excluding tractors, bulldozers, and tillers. Subsequently, the notification was amended to exclude oil-engines, electric motors, and pumpsets from the list of exempted items. This amendment resulted in pumpsets losing their eligibility for exemption as agricultural implements, effective from 17th September 1970.

The Tribunal referenced a decision by the Allahabad High Court regarding the classification of water pumpsets as agricultural implements. Initially, the Allahabad High Court held that water pumps were not agricultural implements, but this decision was later overturned by a Full Bench, establishing that pumpsets were intimately connected with agriculture and commonly used as agricultural implements. The Full Bench emphasized that an appliance need not be exclusively used for agricultural purposes to qualify as an agricultural implement; it should be commonly used for such purposes.

Applying the Full Bench decision, the Court concluded that pumpsets were agricultural implements until 17th September 1970, after which the specific notification withdrew their exemption eligibility. Therefore, the revision partially succeeded, allowing the exemption only up to the specified date. The judgment highlighted the importance of the specific notification in determining the eligibility of items as agricultural implements for tax exemption purposes.