1978 (8) TMI 199 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether diesel engines and pump sets are liable to be taxed as agricultural implements or machinery parts?

Analysis:
The case involved a dispute regarding the taxability of diesel engines and pumping sets sold by the assessee under the relevant entries in the First Schedule to the Act. The assessee contended that both diesel engines and pumping sets were agricultural implements and not liable to be taxed under entry No. 52. However, the Additional Judge (Revisions), Sales Tax, Agra Range, Agra, assessed the turnover at the rate of 6 per cent. The main issue was whether these items fell under the category of agricultural implements or machinery parts for tax purposes.

Regarding pumping sets, it was argued that they consist of a diesel engine coupled with a water pump, and therefore, do not fall within the entry for machinery and spare parts. The court referred to previous decisions and held that pumping sets fall within the ambit of entry No. 52 as machinery and spare parts, based on the specific inclusion of water pumps in that entry. The technical distinction between a "water pump" and a "centrifugal pump" was also discussed to determine the classification.

In the case of diesel engines, the court considered a decision of the Bombay High Court and distinguished it based on the specific entry for agricultural implements in the present case. It was established that diesel engines, not being worked by human or animal power, did not meet the criteria for agricultural implements under the relevant entry. The court emphasized that agricultural implements in the notification must be contrivances fit for agricultural purposes, which diesel engines alone do not fulfill.

Ultimately, the court concluded that both diesel engines and pumping sets are liable to be taxed as machinery and not as agricultural implements. The decision favored the department, and the assessee was directed to bear the costs of Rs. 200. The reference was answered accordingly, settling the taxability issue in favor of the tax department.