Machinery used in manufacture requires an essential role; a chain sharpener was treated as a servicing machine instead.

Model 2030 chain sharpener was held not to be machinery used in the manufacture of goods because it did not play an essential and integral role in converting raw materials into finished goods. On the facts, it was only a service machine used to sharpen or maintain the chain saw, and the wood-cutting process could continue without it. The item therefore fell under the residuary entry in Schedule III rather than the specific machinery entry in Schedule II, Part A, under the Gujarat Sales Tax Act, 1969. The article's cited precedents did not alter that classification, as they were distinguished on different factual and statutory settings.

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Issues: Whether Model 2030 chain sharpener was covered by entry 16(1) of Schedule II, Part A of the Gujarat Sales Tax Act, 1969 as machinery used in the manufacture of goods, or whether it fell under the residuary entry 13 of Schedule III.

Analysis: The article was found, on the dealer's own description and the accompanying literature, to be a machine meant for sharpening the chain saw and not for cutting wood or timber. The test for "machinery used in the manufacture of goods" requires the machinery to play an essential and integral role in the process of converting raw materials into finished goods. On the facts found, the chain sharpener was only a service machine for maintaining the cutting equipment and the manufacturing process of cutting or sawing wood could proceed without its operation. The cited precedents on manufacture and use did not assist the dealer because they were applied in different factual and statutory settings and, properly understood, supported the Revenue's position.

Conclusion: The chain sharpener was not machinery used in the manufacture of goods and was correctly classified under the residuary entry 13 of Schedule III, not under entry 16(1) of Schedule II, Part A.

Final Conclusion: The reference was answered against the dealer and in favour of the Revenue, with the classification adopted by the taxing authorities sustained.

Ratio Decidendi: For an item to fall within "machinery used in the manufacture of goods", it must be an essential and integral part of the manufacturing process itself, and a machine used merely to maintain or sharpen another machine used in manufacture does not satisfy that test.

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