TMI Blog1976 (1) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of the notice by the Commissioner or up to the date when the notice is served on the assessee?" 2.. The same two questions have also been referred to us in M.C.C. No. 347 of 1973, M.C.C. No. 348 of 1973 and M.C.C. No. 349 of 1973. The assessee in all these four cases is the same. The period of assessment in these four cases is 1961-62 to 1964-65. There is a fifth case also before us (M.C.C. No. 350 of 1973, Modi Brothers v. Commissioner of Sales Tax), in which only the first of the above two questions has been referred to us. All these five cases were heard by a Division Bench of Tare, C.J., and one of us (Sharma, J.). By its order dated 26th August, 1975, the Division Bench answered the second question thus: "The period of limitation for revision proceedings under section 39(2) of the M.P. General Sales Tax Act, 1958, runs against the assessee up to the date of issue of the notice by the Commissioner and not up to the date when the notice is served on the assessee." However, on the first question, the Division Bench referred to three decisions of different Division Benches of this Court and found that, according to it, the view expressed in those cases requires further e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors by mounting single cylinder horizontal gasoline engines on Rumely steam-powered traction engine running gears. Due largely to cold weather starting difficulties, these tractors never operated successfully. The first successful gasoline tractor was built in 1892 by John Froelich, an Iowa farmer and blacksmith. It was a 20 H.P., single cylinder vertical gasoline engine 14 ''bore X 14'' stroke (36 X 36m). In addition to propelling itself, its construction was the first to combine three other essential functions, viz., (1) Friction clutches to engage and disengage the power train and belt pulley. (2) Steering under control of operator. (3) Reverse gearing to permit rearward travel. During the following decade, no less than 18 separate attempts are known to have been made to design and build farm tractors powered with gasoline engines. In 1897, English tractors with oil burning engines were being produced. In 1901, following experimental work started in 1895, C.W. Hart and C.H. Parr of Charles City built the first tractor designed for drawbar rather than belt work. It was powered with a twin-cylinder horizontal gasoline engine, 9" bore X 13" stroke and developed 30 H.P. at 250 rpm. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural implement. It was also observed that the use of a crow-bar for agricultural purposes was "by no means a remote use" and it was further observed that a crow-bar is "extensively used" as an agricultural implement. 9.. In 1963, the Bombay High Court in Pashabhai Patel Co. v. Collector of Sales Tax[1964] 15 S.T.C. 32. found on the evidence discussed by the Tribunal in that particular case that the "principal and primary use" of a tractor was not for agriculture. That case is clearly distinguishable on facts, but the principle adopted for the decision of that case was the same as the one which we accept. 10.. In 1965, Dixit, C.J., and Pandey, J., of this court in Agrawal Bros., Satna v. Sales Tax Commissioner[1965] 16 S.T.C. 860; 1965 J.L.J. 895., observed as follows: "A tractor is no doubt a machine worked by diesel or petrol. It is a self-propelled vehicle for hauling other vehicles, farm machines, planes, etc. It is used on highways, in factories, at airfields and also on agricultural land as a source of power and motive force. On agricultural land it is used along with agricultural implements such as harrows, ploughs, tillers, blade-terracers, seed-drills, etc. But a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material by reference to which the question" could be answered, and it was by reference to the said material that they answered the question in the light of the test, which we have stated above and on which our answer to the present reference will be based. We respectfully concur with the learned Judges of the Gujarat High Court in the view that they have taken in the above case. 14.. In 1972, the High Court of Punjab and Haryana in Karnal Machinery Store v. Assessing Authority[1973] 31 S.T.C. 3. decided on 23rd December, 1965 held that it is the "intrinsic nature and purpose" for which a tool is used, which would determine its nature. It was further held that "only that implement will be an agricultural implement which has intimate connection with agriculture". It was held that "monoblock pumping sets", the main purpose of which is to pump water cannot be classed as electrical goods. They are agricultural implements when used by agriculturists for agricultural operations and, therefore, fall under entry 34 of Schedule B to the Punjab General Sales Tax Act, 1948. 15.. Later, in the same year, a Full Bench of the Allahabad High Court in Engineering Traders v. State of Uttar Prad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals." 18.. The licence dated 15th June, 1960 (annexure 1) is on record. It was granted to M/s. Amalgamations (Private) Ltd., Madras, in the name and style of M/s. Massey-Ferguson India Private Ltd., for the manufacture of "Ferguson Agricultural Tractors". Then in the licence of 6th March, 1965, also the expression used is "Ferguson Agricultural Tractors". 19.. In the Tractors (Price Control) Order, 1967, published in the Gazette of India, Extraordinary, dated 30th March, 1967, by the Ministry of Industrial Development and Company Affairs (Department of Industrial Development), the word "tractor" has been defined in clause 3(e) as follows: "(e) 'tractor' means an agricultural machinery known by that name and fitted with a diesel engine of a capacity not exceeding fifty horse power." 20.. There is also on record the following notification published by the Ministry of Commerce, Government of India, and published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated 9th February, 1967: "S.O. 515.-In exercise of powers conferred by sub-clause (xi) of clause (a) of section 2 of the Essential Commodities Act, 1955 (10 of 1955), the Central Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery must necessarily be answered by reference to its design, mechanism, features and special adaptability to any particular use. The question cannot be answered in the abstract without reference to the intrinsic character and design of the tractor in a given case. If, having regard to its design and distinct features, it is found that it is more suitable and advantageously used for agricultural purposes and that it is so adapted, it must be held to be a farm tractor even if it is capable of being used occasionally or incidentally for non-agricultural purposes. Such occasional or incidental user for a different purpose does not alter or affect its essential character as a farm tractor. A farm tractor is an agricultural machinery. The determining consideration is whether the "principal and primary" use of a particular tractor is for agriculture. It need not be shown that the tractor could be used "only" on agricultural land or "exclusively" for agricultural purposes. 25.. Accordingly, we answer the question referred to us (first question) in the negative. Parties shall bear their own costs. SINGH, J.-I agree with the conclusion reached by my Lord the Chief Justice. But, being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a machinery used for farming work, e.g., ploughing, sowing, manuring, watering, reaping, thrashing, etc. In formulating this meaning, I have taken the assistance from the definition of "agricultural engine" suggested by counsel and accepted by Donovan, J., in the case of Regina v. Berkshire County Council; Ex parte Berkshire Lime Co. (Childrey) Ltd.[1953] 1 W.L.R. 1146 at 1149 (C.A.). 3.. The meaning of agricultural machinery given above, however, requires further explanation. The Sales Tax Act is designed to tax sales of goods and not their uses. The Act is essentially addressed to dealers, who carry on business of sale and are generally not concerned with the use made of the goods sold by them. The exigibility to tax and exemption from it relevant to entry 44 are attracted at the point of sale and are not affected by the subsequent use of the machinery sold. The exception in entry 44 is not restricted to sales made to agriculturists. For these reasons, in considering whether a machinery sold is an agricultural machinery within the exemption in entry 44, one will have to take into account the use of the machinery of that kind in general and not the particular use made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from entry 44 was obviously to benefit the consumers of this class of goods, i.e., the agriculturists, who have ultimately to bear the burden of sales tax by paying it as a part of price to the dealer. If that is the plain object of the words, which fall for our interpretation, that object would be better served by holding that a machinery, which is commonly used in farming work, is agricultural machinery within the words of exemption under entry 44 irrespective of whether it is used or not used in other trades or occupations and this is the meaning, which I adopt as best expressing the intention of the legislature. It would be for the Tribunal of fact to find whether a machinery is commonly used in farming work and no hard and fast rule can be laid down in that behalf. 4.. The application of the test of "exclusive use" or even "principal and primary use" will, in my opinion, lead us away from the ordinary meaning of the words "agricultural machinery" and will result in depriving many agriculturists of the benefit which the legislature intended to confer on them. Moreover, these tests create practical difficulties for the assessee and the sales tax authorities, as in the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e words "agricultural machinery" in entry 44, which only have the effect of reducing the rate of tax. We are not here construing two competing entries such as "agricultural machinery" and "industrial machinery" requiring us to devise a test of absolute exclusion, which may enable us to say that a particular machinery is one or the other. Here we are concerned with a broad category of "all machineries or machines worked by diesel or petrol" and the excepted category of "agricultural machinery". The words to be construed here, as in the case of entry 1, Schedule I, do not require us to hold that there is necessarily an antithesis between agricultural machinery and machinery used in other trades or occupations. If a machinery is commonly used in agriculture or farming work, it will fall within the description of "agricultural machinery" irrespective of whether it is also used in other trades or occupations and can also be described by some other name. 7.. In the cases before us, the Tribunal has found that the tractors sold were designed and manufactured for agricultural purposes and that they were commonly used in farming work, though in a small fraction of cases of the total sales ..... X X X X Extracts X X X X X X X X Extracts X X X X
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