Court rules domestic flour mills sold by assessee not covered by specific tax entry, remands machinery classification issue for further review.

The court held that the domestic flour mills (without electric motors) sold by the assessee are not covered by entry 92 of Schedule II-Part A under the Gujarat Sales Tax Act. However, the court declined to determine whether the flour mills qualify as "machinery" under entry 16(1) due to insufficient findings from the Tribunal, directing the Tribunal to adjust its decision accordingly. The decision favored the assessee regarding entry 92 but left the question of entry 16(1) unresolved.

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Issues Involved:
1. Whether the domestic flour mill (without electric motor fitted to it) sold by the assessee is covered by entry 92 of Schedule II-Part A to the Gujarat Sales Tax Act, 1969.
2. Whether the domestic flour mill (without electric motor fitted to it) sold by the assessee is covered by entry 16(1) of Schedule II-Part A to the Gujarat Sales Tax Act, 1969.

Detailed Analysis:

Issue 1: Coverage under Entry 92 of Schedule II-Part A

The primary question was whether the domestic flour mill (without an electric motor) falls under entry 92 of Schedule II-Part A, which pertains to "domestic electrical appliances."

Definition and Interpretation:
- Domestic Electrical Appliances: For an article to fall within this category, it must satisfy three conditions: it must be an appliance, it must be an electrical appliance (fitted with some electrical device), and it must be normally used or capable of being used in the household.
- Appliance: As per the court's reference to Star Radio Electric Co. v. Commissioner of Sales Tax, an "appliance" is distinct from the materials it is made from and serves as a means to an end.
- Electrical Appliance: An appliance must have an in-built electrical device to be termed as an electrical appliance, as discussed in Special Civil Application No. 1251 of 1972.

Court's Analysis:
- The domestic flour mill without an electric motor does not satisfy the conditions to be termed as an "electrical appliance" because it lacks an in-built electrical device.
- The court emphasized that without the electrical device, the flour mill is merely an assemblage of parts designed to serve as a domestic appliance but cannot be termed as an electrical appliance.

Conclusion:
- The court agreed with the Tribunal's decision that the domestic flour mills sold by the assessee are not covered by entry 92 of Schedule II-Part A.

Issue 2: Coverage under Entry 16(1) of Schedule II-Part A

The second question was whether the domestic flour mill (without an electric motor) falls under entry 16(1) of Schedule II-Part A, which pertains to "machinery used in the manufacture of goods."

Definition and Interpretation:
- Machinery: The term "machinery" involves a completed machine or parts that, when assembled, form a complete machine. It must generate power or modify, apply, or direct natural forces to produce a specific result.
- Court's Reference: The court referred to Corporation of Calcutta v. Cossipore Municipality and Ambica Wood Works v. State of Gujarat to define "machinery." The emphasis was on an article or a collection of articles that interact in unison to produce a specific result.

Court's Analysis:
- The Tribunal did not provide essential findings of fact to determine whether the domestic flour mills (without electric motors) can be termed as "machinery."
- The court noted that the Tribunal should have examined whether the flour mill is a complete and integrated unit capable of producing flour from grains through the interaction of its parts upon the application of manual force.

Conclusion:
- The court declined to answer the question of whether the domestic flour mills are "machinery" under entry 16(1) due to the lack of essential findings from the Tribunal. The Tribunal is directed to adjust its decision under section 69(4) based on the court's observations.

Final Disposition:
- First Part: The question regarding entry 92 of Schedule II-Part A is answered in the negative, in favor of the assessee and against the revenue.
- Second Part: The court declined to answer the question regarding entry 16(1) of Schedule II-Part A and directed the Tribunal to adjust its decision accordingly.

Costs:
- There will be no order as to costs of the reference.

Reference Answered Accordingly.

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