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2014 (4) TMI 842 - HC - VAT and Sales TaxScope of term Goods u/s 2 (d) of the Act - Taxation of Transfer of Right to use goods - plant and machinery attached to earth – Movable Property or not - Claim for exemptions - rent received for plant and machinery – immovable property – Rent Agreement - Whether machinery can be held to be "goods" so as to attract tax liability under Act, 1948 - Absence of intention to severe plants and machinery - Held that:- For a property and to be regarded as attached property, it must become attached to immovable property as permanently as a building or a tree is attached to earth - If, in the nature of things, the property is a movable property and for its beneficial use or enjoyment, it is necessary to embed it or fix it on earth, though permanently, that is, when it is in use, it may not be regarded as immovable property, but not otherwise – Here, besides plants and machinery, entire land and building was leased out and there was no provision/agreement that plants and machinery shall be severed or removed from earth - Removal of plants and machinery would not have allowed the factory to run - There is no agreement between parties that plants and machinery shall be severed or removed from earth - Even according to definition of 'goods' under Section 2(d) in view of this Court, it cannot be included therein. The term "goods" is defined under Section 2(d) and this is in conformity with definition of "immoveable property" as contained in Section 3(26) of General Clauses Act 1897 - Items, which are fastened to or attached to earth or something attached to earth are not included in the definition of 'goods' unless there is an agreement between the parties that those items etc. would be severed pursuant to contract of sale between the parties, which is not the case here - It is not the case of the Revenue that there was any intention of parties to severe plants and machinery attached to earth - In fact, there was a lease to run entire factory and not to remove or severe plant and machinery attached or fastened to earth, which are installed in the aforesaid factory to make it functional - In view thereof and considering judgment of Tribunal, this Court do not find that plants and machinery in the case in hand can be treated to be "goods" within the meaning of Section 2(d) so as to attract and taxability - Therefore, revision is dismissed – Decided against Revenue.
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