Agricultural machinery test: oil-engines used for irrigation can qualify even without exclusive agricultural use.

Oil-engines used to pump water for cultivation were treated as agricultural machinery under entry No. 12 of Schedule C to the Bombay Sales Tax Act, 1959. The controlling test was whether the equipment is commonly and ordinarily understood in the commercial sense as agricultural machinery and is directly and intimately connected with agricultural operations. The article notes that use by agriculturists for drawing water, inclusion in approved cultivator lists, and recognition in official and banking materials supported that characterisation. It also states that exclusive agricultural use is not required, and prior temporary tax treatment under a different entry did not alter the result.

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Issues: Whether oil-engines used for pumping water for agricultural land are agricultural machinery within entry No. 12 of Schedule C to the Bombay Sales Tax Act, 1959.

Analysis: The controlling test was whether the machinery is commonly and ordinarily understood in the commercial sense as agricultural machinery and whether it is directly and intimately connected with agricultural operations. The evidence before the fact-finding authority showed that the oil-engines in question were sold to agriculturists for use in drawing water for cultivation, were included in approved lists for cultivators, and were recognised by official and banking materials as engines used for agricultural purposes. The earlier view that a machine must be exclusively used for agriculture was rejected, and the separate temporary tax treatment of oil-engines under an earlier entry did not negate their character as agricultural machinery when used and understood in that way.

Conclusion: Oil-engines used for pumping water for agricultural purposes were agricultural machinery within entry No. 12 of Schedule C, and the reference was answered in favour of the assessee.

Final Conclusion: The sales of the oil-engines in question were exigible as agricultural machinery at the concessional rate under the relevant schedule entry, and the taxing authority's contrary view was rejected.

Ratio Decidendi: A machine need not be exclusively used for agriculture to qualify as agricultural machinery; it is sufficient if it is commonly understood and ordinarily used as such and bears a direct and intimate connection with agricultural operations.

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