SHARPEX ENGINEERING WORKS Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THIS reference is under section 69 of the Gujarat Sales Tax Act, 1969, at the instance of the dealer. As stated at the Bar the opponent-dealer is a partnership firm.

(2.) THE dealer manufactured certain machines, and on September 19, 1978, applied for determination of the sales tax payable on the machines in question. THE machines are described as follows : (1) Model 2030 chain sharpener (2) Model 2031 chain saw (3) Model 2032 one man chain saw THE Deputy Commissioner of Sales Tax on August 29, 1979, determined that item Nos. 2 and 3 were the machinery used in the manufacture of goods and, therefore, falling in entry 16 (1) of Schedule II, Part A of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Act" ). However, as far as model 2030 chain saw sharpener is concerned it was found that the same was not covered by entry 16 (1) of Schedule II, Part A to the Act and, therefore, it was falling under entry 13 of Schedule III to the Act (i. e. , residuary entry ). THE opponent-dealer carried the matter in appeal before the Tribunal. As per its judgment dated August 27, 1981 the Tribunal, after hearing the parties, came to the conclusion that the view taken by the Deputy Commissioner of Sales Tax was correct and the article in question was correctly held to be falling in entry 13 of Schedule III to the Act and not within entry 16 (1) of Schedule II, Part A to the Act.

(3.) LEARNED counsel for the dealer submitted that the Tribunal has not correctly followed the principles laid down by this High Court in the case of Industrial Machinery Manufacturers Pvt. Ltd. v. State of Gujarat, reported in [1965] 16 STC 380 and in the case of State of Gujarat v. Gujarat Engineering Company, reported in [1974] 33 STC 302. In the case of Industrial Machinery Manufacturers Pvt. Ltd. [1965] 16 STC 380 (Guj) it was the case of the dealer that the humidifier used by the cotton textile mills in order to maintain certain level of humidity for the purpose of increasing the strength of yarn was machinery used in the manufacture of cloth. The Deputy Commissioner of Sales Tax and the Tribunal had negatived this contention. This High Court held that humidifiers were machinery used in the manufacture of cloth. LEARNED counsel for the dealer submits that on the basis of the aforesaid decision, the article in question, i. e. , model 2030 chain sharpener, should also be held to be a machinery used in the manufacture of wood of different sizes.