Electric motors outside electricity-generation exemption: taxable at the higher sales tax rate unless used for transmission or distribution.

Electric motors do not qualify as electrical plant, equipment or accessories required for generation, transmission or distribution of electricity under entry 17 of Schedule A to the Punjab General Sales Tax Act, 1948. The applicable test is whether the commodity is exclusively or predominantly used for the purpose covered by the exemption. Because electric motors have multiple uses and are mainly used to convert electric power into mechanical energy, they fall outside the exception and remain taxable at 10% rather than 6%. Office memoranda cannot enlarge the statutory entry; on their terms, they support concessional taxation only where the motors are used for generation, transmission or distribution of electricity.

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Issues: Whether electric motors fall within the exception in entry 17 of Schedule A to the Punjab General Sales Tax Act, 1948, as electrical plant, equipment or accessories required for generation, transmission and distribution of electricity, and are therefore taxable at 6% instead of 10%.

Analysis: The relevant entry exempts only electrical plant, equipment and accessories required for generation, transmission and distribution of electric energy. Electric motors have multiple uses and are mainly used to convert electric power into mechanical energy. Applying the settled test whether the article is exclusively or predominantly used for the purpose contemplated by the entry, electric motors cannot be treated as goods required for generation, transmission or distribution of electricity. The office memos relied upon by the dealer did not alter the statutory entry and, on their terms, supported the conclusion that motors were taxable at 6% only when used in generation, transmission or distribution of electricity, and otherwise at 10%.

Conclusion: Electric motors do not fall within the exception in entry 17 of Schedule A and are liable to sales tax at 10%, not 6%.

Ratio Decidendi: A commodity falls within an exemption for plant, equipment or accessories required for generation, transmission or distribution of electricity only if it is exclusively or predominantly used for that purpose.

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