1921 (7) TMI 1 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the Cossipore and Chitpore Municipality acted ultra vires in assessing the Corporation of Calcutta on an annual value of Rs. 25,000 for a certain holding.
2. Whether the balancing tank and its supporting structure constitute "machinery" under Section 101 of the Bengal Municipal Act, 1884.

Issue-Wise Detailed Analysis:

1. Ultra Vires Assessment by Municipality:
The appellants, the Corporation of Calcutta, challenged the assessment made by the Cossipore and Chitpore Municipality, claiming it was ultra vires. The initial assessment was Rs. 1,053, which was significantly increased to Rs. 30,000 after the erection of a balancing tank and its supporting structure. The assessment was later revised to Rs. 25,000. The appellants contended that the municipality should exclude the value of the tank and its supporting structure as these constituted "machinery" under Section 101 of the Bengal Municipal Act, 1884.

2. Definition of "Machinery" under Section 101 of the Bengal Municipal Act, 1884:
The crux of the appeal hinged on whether the balancing tank and its supporting structure could be classified as "machinery" under the third proviso of Section 101 of the Act. Section 101 stipulates that the annual value of a holding should exclude the value of any machinery on it. The appellants argued that the tank and its supports were "machinery" because they regulated water flow and maintained uniform pressure in the water mains.

Judgment Analysis:

Ultra Vires Assessment:
The High Court initially dismissed the suit, holding that the municipality's assessment was valid. The appellants then appealed to the Privy Council. The Privy Council examined whether the municipality had the authority to include the value of the tank and its supporting structure in the assessment. The Court found that the assessment increase from Rs. 1,053 to Rs. 30,000 was due to the tank and its supports, which the municipality did not exclude from consideration.

Definition of "Machinery":
The Privy Council noted that the Act did not define "machinery." The Court considered the functions of the tank and its supports, concluding that the tank was a stationary receptacle for water, and its supporting structure merely elevated it to allow water to flow by gravity. The tank did not move, nor did its parts move interdependently to produce a specific result. The Court reasoned that the tank and its supports did not meet the ordinary definition of "machinery," which involves mechanical contrivances generating power or modifying natural forces to achieve a specific outcome.

The Court referenced Lord Davey's judgment in Chamberlayne v. Collins, which described machinery as applying mechanical means to attain particular ends using natural forces. However, the Court found that the tank and its supports did not fit this description, as they did not generate or modify any force but merely allowed gravity to act on the water.

Conclusion:
The Privy Council concluded that the balancing tank and its supporting structure were not "machinery" within the meaning of Section 101 of the Act. Consequently, the municipality was justified in including their value in the assessment. The appeal was dismissed, and the appellants were ordered to pay the respondents' costs. The Court advised His Majesty accordingly, affirming the High Court's decree.

This comprehensive analysis preserves the legal terminology and significant phrases from the original judgment, providing a thorough understanding of the issues and the Court's reasoning.