1986 (4) TMI 333 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of exemption under item No. 31 for transformers, electric pumps, and electric motors under Bihar Sales Tax Act, 1959.

Detailed Analysis:

1. Electric Pumps - Exemption Claim:
The dispute revolves around whether electric pumps qualify as agricultural machinery for exemption from general sales tax under item No. 31. The Tribunal remanded the case to determine if the pumps were sold for agricultural use. The Court cited a similar case where pumps were considered agricultural implements due to their common use in irrigation. Despite references to other cases, the Court rejected the exemption claim, emphasizing common use and understanding to determine applicability, ruling in favor of the department.

2. Electric Motors - Exemption Claim:
Regarding electric motors, the Tribunal ruled in favor of the dealer, considering them as machinery under the exemption clause. The government pleader argued that electric motors should not be classified as machinery. The Court referenced a case from Orissa but found it inconclusive. Given the specific description in item No. 31, the Court upheld the Tribunal's decision, ruling in favor of the dealer against the department.

3. Transformers - Exemption Claim:
The disagreement between the Tribunal members centered on whether transformers were covered under item No. 31 or a separate item added later. The Chairman viewed transformers as included under machinery, while the Member believed the separate item excluded them. The Court rejected the dealer's argument that the separate item was surplusage, applying the principle of strict construction of taxing statutes. It upheld the deliberate inclusion of the separate item for transformers manufactured in Bihar, ruling in favor of the department against the dealer.

In conclusion, the Court ruled in favor of the department for questions related to electric pumps and transformers, while ruling in favor of the dealer for electric motors. The judgment clarified the interpretation of the exemption clause under item No. 31 for specific machinery and equipment, emphasizing common use and strict construction of taxing statutes in determining eligibility for exemption under the Bihar Sales Tax Act, 1959.