Water-meters as machinery: instrument-based energy transmission brought them within the taxing notification and upheld classification.

Water-meters that operate through the movement of water causing internal parts and indicators to move were treated as machinery in the generic sense for the taxing notification. The court reasoned that machinery includes appliances and instruments by which energy or force is transmitted and transformed from one point to another, and that principle brought water-meters within the term. Their constituent components were therefore regarded as parts of machinery. The reference was answered against the assessee, and the departmental classification taxing the water-meters and their parts as machinery was upheld.

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Issues: Whether water-meters manufactured by the assessee and their parts are machinery and therefore taxable under the relevant notification.

Analysis: Water-meters were found to be instruments in which the flow of water causes movement of internal parts and indicators, thereby transmitting energy and making the meter operate. Machinery in the generic sense includes appliances and instruments by which energy or force is transmitted and transformed from one point to another. On that principle, water-meters fall within the expression machinery, and their parts are parts of machinery.

Conclusion: The question was answered in the affirmative; the water-meters and their parts were held taxable as machinery and parts of machinery, in favour of the Revenue and against the assessee.

Final Conclusion: The reference was decided against the assessee and the departmental classification was upheld.

Ratio Decidendi: An instrument that operates by transmitting energy or force through the movement of a medium is machinery in the generic sense for the purpose of a taxing notification.

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