Mould testing equipment counted as eligible fixed capital investment where plant includes business apparatus used in manufacture.

Mould testing equipment used in manufacture was treated as includible in eligible fixed capital investment for computing exemption under the Rajasthan Sales Tax Incentive Scheme, 1987. The scheme linked exemption to the extent of eligible fixed capital investment, and the exclusion based on an earlier administrative circular was displaced by a later circular that included tools, jigs, dyes and moulds with machinery. The equipment was regarded as essential to the plant and machinery and within the ordinary meaning of "plant", being apparatus used in carrying on the business rather than stock-in-trade.

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Issues: Whether mould testing equipments used in manufacture were includible in the eligible fixed capital investment for computing the tax exemption benefit under the Rajasthan Sales Tax Incentive Scheme, 1987.

Analysis: The scheme linked the maximum exemption to the extent of eligible fixed capital investment. The exclusion of mould testing equipments rested on an administrative circular, but a later circular issued by the same authority included tools, zigs, dyes and moulds along with machinery. The equipments were treated as essential for the plant and machinery and as falling within the ordinary meaning of plant. The inclusion was also supported by the principle that plant covers apparatus used by a businessman for carrying on the business and not stock-in-trade.

Conclusion: The mould testing equipments were rightly included in the eligible fixed capital investment, and no interference with the Tax Board's order was warranted. The revisions were dismissed.

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