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2016 (10) TMI 786 - GUJARAT HIGH COURTClassification of goods - Out Board Marine Engine - classified under residuary entry and taxed at 12.5% or would fall under entry-42A as agricultural inputs and taxed at 4% - Whether on the facts and circumstances of the case, the Tribunal has rightly held that, the goods 'Out Board Marine Engine' commonly known as “Oil Engines” falls U/e No.42A of Schedule II of the Gujarat Value Added Tax Act,2003? The assessee deals in Out Board Marine Engine of less than 15 HP capacity. Said engine is fitted on fishing boats and is used for the purpose of fishing. It is specially designed engine for such purpose - Held that: - the term 'agriculture' and the related terms have reference to cultivation of land. It would include floriculture, horticulture, the raising of crops, grass or garden produce, and grazing. All these activities would be in connection with the soil. By no stretch of imagination, activity of fishing would satisfy this definition. 11. A similar issue came up before the Supreme Court in case of Commissioner of Income-tax,West Bengal, Calcutta V/s. Benoy Kumar Sahas Roy [1957 (5) TMI 6 - SUPREME Court] where it was held that Nevertheless there is present all throughout the basic idea that there must be at the bottom of it cultivation of land in the sense of tilling of the land, sowing of the seeds, planting, and similar work done on the land itself. This basic conception is the essential sine qua non of any operation performed on the land constituting agricultural operation. If the basic operations are there, the rest of the operations found themselves upon the same. But if these basic operations are wanting the subsequent operations do not acquire the characteristic of the agricultural operations.” Whether the goods fall entry-58A which pertains to plant and machinery? - Held that: - The term 'plant' in common parlance has thus acquired a definite meaning and would normally mean a self-contained area, structure or building containing one or more units with infrastructure such as an administrative section or storage or a laboratory, a building machinery etc. taken together that are used in the unit of industrial production are also categorized as plant. The fishing boat would certainly not fall within this description. The entry-58A refers to plant and machinery and not plant or machinery. Accepting the contention of the assessee that the entry would include either plant or machinery would expand the scope beyond what the entry seeks to convey. Every piece of machinery whether part of a plant or not would come within its fold. When we hold that the boat is not a plant, an engine per-se which may be machine would not fit the description of said entry-58A. Shri Hemani however contended that such an interpretation would not be correct. He referred to definition of term 'capital goods' contained in Section 2(5) of the VAT Act which reads thus; “'Capital Goods' means plant and machinery (other than second hand plant and machinery) meant for use in manufacture of taxable goods and accounted as capital assets in the books of accounts.” He would submit that if same logic is applied here also, capital goods would include only machinery which part of a plant and not otherwise. We do not think so. This definition of term capital gods is worded as to mean plant and machinery used for manufacture of taxable goods. Word 'and' in this definition seems to have been used to convey the expression 'as well as'. A plant as well as machinery would therefore be capital goods if it is meant for manufacture of taxable goods. However, there are only passing remarks since we are not concerned with interpretation of definition of term 'capital goods.' The judgment of the Tribunal set aside - The question answered in favour of the revenue - Tax Appeals allowed and disposed off.
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