William Jacks and Co. Ltd. vs The State of Madras

Rajagopalan, J.—The question for determination is whether a lathe which was driven by electrical motors constituted ""electrical goods

within the meaning of Section 3(2)(viii) of the Madras General Sales Tax Act, subject to the payment of sales tax at the higher rate. The Tribunal

held that the lathe which the assessee sold to the railways did come within the scope of ""electrical goods"" and that the amount received towards the

sale price of that lathe in the year of assessment was turnover subject to the payment of the additional tax u/s 3(2)(viii).

The Tribunal purported to apply the principle laid down by this Court in William Jacks and Co., Ltd., Madras v. The State of Madras [1955] 6

S.T.C. 301. Apparently the Tribunal overlooked what this Court stated,

It is neither possible nor desirable for this Court to embark on a preparation of an exhaustive list of what constitute ''electrical goods'' within the

meaning of Section 3(2)(viii) of the Act nor even is it possible to devise a formula of universal application.

It was against this background that the Tribunal had to consider the succeeding passage, where the test formulated with reference to certain

specific items of goods by the then learned Chairman of the Tribunal was approved of by the Court:

...barring a case where a machine cannot be used except with the application of electrical energy, the machine has to be regarded as non-electrical.

In that case lathes were held by the learned Chairman as nonelectrical goods on the application of that test. Only in this case we are concerned

with a heavier type of lathe, a special one designed for the use of railways.

It is rather difficult to hold, that a lathe, by itself, even though driven by electrical energy will come within the scope of the expression ""electrical

goods"". We have pointed out that, in this case, the lathe in question was fitted with electrical motors, one main motor and six auxiliary motors. The

Tribunal no doubt pointed out that without the use of electrical energy this lathe could not be used at all and the Tribunal also pointed out that if the

lathe was to be worked with power other than electrical power it would require changes-extensive changes. But none the less the position remains,

it is a lathe, which was provided with electric motors for its use. Even a lathe designed for use normally with electric motors may not become

electrical goods. Electric motors which no doubt form an integral part of the lathe in question are still there only to provide the motive power for

working the lathe; the lathe itself is machinery, dependent no doubt on electricity in this case, but which could easily be designed and altered for use

with other types of power. We have mentioned this only to indicate that the prima facie view, that a lathe even when driven by electric power is not

electrical goods, is left intact, despite the finding of the Tribunal, which in effect was that this was a lathe designed primarily for use with electrical

energy. On a proper application of the test formulated in William Jacks and Co., Ltd., Madras v. The State of, Madras [1955] 6 S.T.C. 301, the

lathe in question ought to hays been excluded from the category of electrical goods.

The petition is allowed and the turnover in question, Rs. 2,60,236-13-0, will be held liable to sales tax only at the normal rate of three pies in the

rupee. It is not subject to the additional rate for which Section 3(2)(viii) provides. The petitioner will be entitled to its costs. Counsel''s fee Rs. 100.