JUDGMENT Rajes Kumar, J.
1. These three revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 14.03.2002 for the assessment years 1996-97, 97-98 and 98-99.
2. Dealer/opposite party (hereinafter referred to as "Dealer") was carrying on the business of diesel generator set. Dispute relating to the rate of tax applicable to the diesel generator set. Claim of the dealer was that it was liable to tax as machinery. For the assessment year 1996-97, assessing authority levied the tax on the sale of diesel generator set treating it as an unclassified item. For the assessment year 1997-98 in the original assessment proceeding, the claim of the dealer was accepted and the diesel generator set was taxed as machinery. Later on assessing authority rectified its order under Section 22 of the Act and imposed the tax as an unclassified item. For the assessment year 1998-99 assessing authority levied the tax on diesel generator set under entry of "All electrical goods..... filament lighting bulbs" @ 10% treating it as plant required for generation of electrical energy". Against the orders passed by the assessing authority, appeals have been filed which were rejected. Dealer filed second appeals before the Tribunal, which were allowed. Tribunal held that "Diesel generator set" liable to tax as "machinery". Tribunal further held that for the assessment year 1997-98 order passed under section 22 of the Act rectifying original order levying tax on the generator set as an unclassified item was erroneous being passed on account of change of opinion, in as much as there was no mistake apparent on the fact of record. In all the three revisions following questions have been raised:
"Whether on the facts and circumstances of the case, the Trade Tax Tribunal was legally justified in holding that the generator sold by the opposite party will fall in the entry No. 38(i) of the Notification dated 1.10.94 as machinery and not in the Notification dated 7.9.81 at serial No. 3 as electrical equipment plant and their accessories required for generation, distribution and transmission of electrical energy..............?"
3. Heard learned counsel for the parties.
4. It is useful to refer the relevant notifications. Notification No. ST-(sic)-5784/X-10(1)-80-U.P. Act 15/48-Order-81, dated 07.09.1981 reads as follows:
In exercise of dm powers under clause (d) of Sub-section (1) of Section 3-A of the U.P. Sales Tax Act, 1948, (U.P. Act No. XV of 1948), read with Section 21 of the U.P. General Clauses Act, 1904 (U.P. Act No. 1 of 1904), and in supersession of all previous notifications issued from time to time under Sub-section (1) of Section 3-A of the Act as it stood before its amendment by the U.P. Sales Tax (Amendment and Validation) Ordinance, 1981 (U.P. Ordinance No. 12 of 1981), the Governor is pleased to declare that, with effect from September 7, 1981, the turnover in respect of the goods specified in column 2 of the Schedule to the notification shall be liable to tax at the point of sale specified in column 3 of the said Schedule at the rate specified against each in column 4 thereof:
1. ......
2. ......
3. All electrical goods, instruments, apparatus, appliances and all such articles the use of which cannot he had except with the application of electrical energy, including fans, fluorescent tubes (including their starters, chokes, fixtures, fittings and accessories), electrical earthenware and porcelain, electrical equipments, plants and their accessories required for generation, distribution and transmission of electrical energy, electric motors and parts thereof, and all other accessories and components whether sold as a whole or in parts, but excluding torches, torch-cells dry cell batteries, torch-bulbs and filament lighting bulbs, M or I 12%
5. Notification No. TT-2-3402/XI-9(l 16)/94-U.P. Act-15-48-Order--94, dated 01.10.1994 reads as follows "In exercise of the powers under clause (d) of Sub-section (1) of Section 3-A of she Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. 15 of 1948), read with Section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904), the Governor is pleased to make with effect from October 1, 1994, the following amendment in Government Notification No. ST-II-5784/X-l0(1)/80-U.P. Act-15/48-Order-81, dated September 7, 1981, as amended from time to time, AMENDMENT Entry No. 38.
6. Learned Standing Counsel submitted that the diesel generator set is "plant required for generation of electrical energy and" therefore, it is liable to tax under the notification No. 5784 dated 07.09.1981. He submitted that it may be a machinery but it is liable to tax as "plant required for generation" the said entry being specific He submitted that diesel generator set is composition of diesel engine and altenator, which generates electricity and, therefore, is a plant. In support of his contention he relied upon the various decisions.
7. Learned counsel for the dealer submitted that the diesel generator set is not a plant but is a machinery. He submitted that the plant is a combination of various machines, accessories and equipments and when such machines, accessories and equipments installed and fitted together they are known as plant but the individual diesel generator set does not fall within the purview of plant. He submitted that the Apex court in the case of Commissioner of Income Tax v. Mir Mohd. AIR, reported in 53 ITR, 165, held that diesel generator set is a machinery and not the plant. He submitted that the diesel generator set has been held as machinery in the case of CST v. Tek Invest (India) Pvt. Ltd., Haridwar, reported in 1998 UPTC, 128. He submitted that there is no entry of diesel generator set and closest entry is of machinery and in common parlance diesel generator set is generally known as machinery and not as a plant. He submitted that the decision cited by learned Standing Counsel are distinguishable and not applicable to the present case.
8. I have carefully considered the rival submissions and perused the order of the Tribunal and the authorities below.
9. In my opinion, the view taken by the Tribunal treating the diesel generator set as machinery appears to be correct.
10. Diesel generator set is not specifically mentioned in any of the notification issued under the Act. It has also not been defined under the Act.
11. The New Webster's Dictionary of the English Language defines 'generator' as under :-
"Generator- One who generates; something that generates or produces; a machine by which mechanical energy is converted into electrical energy;"
12. The Random House Dictionary of the English Language defines "generator" as under :
"generator- 1. One who or that which generates. 2. A machine that converts one form or energy into another, esp. mechanical energy into electrical energy, as a dynamo, or electrical energy into sound, as an acoustile generator, 3. Chem. An apparatus for producing a gas or vapor.....'
13. Tribunal has held generator as a machinery. Let us examine the meaning of the word "machinery". The word machinery for the first time came up for interpretation before the Privy Council. Lord Atkinson in the judgement Corporation of Calcutta v. Chairman of the Cossipore Municipality and Chitpore Municipality, reported in AIR 1922 PC, 27 held as under:
"The word "machinery" when used in ordinary language prime facie means some mechanical contrivances which by themselves or the combination with one or more other mechanical contrivances, by the combines movement and inter dependent operation of their respective parts generate power, or evoke, modify, apply or direct natural forces with the object in each case of effecting a definite and specific results."
In the case of Engineering Traders v. State of U.P., reported in 31 STC, 456, The Full Bench of this Court defines machinery as follows:
"Machinery according to the dictionary meaning means a machinery in general or a functioning unit. The word "machine" is a well known term and according to websters dictionary means an instruments (as a lever) design to transmit and modify the application of power, force and motion. Thus machinery in generic sense would include all appliance and instruments where by energy or force is transmitted and transformed from one point to another in that sense it will include simple appliance like a lever to complicated machinery employed in mills and factories."
14. In the case of Commissioner of Income Tax v. Mir Mohd. Ali, reported in 53 ITR, 165 Apex Court held diesel generator set as machinery. Apex Court considered diesel generator set as follows:
"Further, when the assessee purchased the diesel engines, they were not "plant" or part of a plant: because they had not been installed in any vehicle. They were, according to the definition given by the Privy Council, machinery. They were not yet part of plant and according to the Act, 20% of the cost thereof was allowable to the assessee. All the conditions required by the Act are satisfied. If we look at the point of time of purchase and installation, what was purchased and installed was machinery."
15. Following the aforesaid decision of the Apex Court this Court in the case of CST v. Tek Invest (India) Pvt. Ltd., Haridwar, reported in 1998 UPTC, 128 held diesel generator set as machinery.
16. In the case of Snow White Industries, Rishikesh v. CTT, reported in 1999 UPTC, 130 this Court held diesel generator set as machinery.
17. In this view of the matter it is clear that this Court has consistently treated the diesel generator set as machinery. Diesel Generator set has also been treated as machinery by the various other High Courts in the case of K.B. Dhoni v. State of Karnataka, reported in 44 STC, 276, D.B. Bhandari v. State of Mysore, reported in 20 STC, 25, Orissa Agro Industries Corporation Ltd. v. State of Orissa, reported in 90 STC, 571, Industrial Machinery Manufacturer P. Ltd. v. State of Gujarat, reported in 16 STC, 380.
18. Now coming to the case of the revenue and the argument raised by the learned Standing Counsel in this regard that the diesel generator set is covered under the notification No. ST-II-5784, dated 07.09.1981 being a plant required for generation of electricity can not be accepted. Diesel generator set in common parlance and in commercial sense is never considered as plant. The word "plant" is not defined under the Act. Webster's Dictionary defines plant as "equipment including fixtures, machinery tools etc. necessary to carry on in any industrial business."
19. In common parlance diesel generator set is generally known as machinery. Now a days due to shortage and irregular: power supply from the power corporation use of diesel generator set by shopkeepers and at residence is common. Common people normally know it as machinery and not as plant. It is not known as electrical goods. It may be mentioned here that that diesel generator set is not specifically notified under any of the notification. It is not defined under the Act. However, in various decisions referred hereinabove this Court and other Courts have consistently held diesel generator set as machinery. In a wider sense alongwith other equipments fixture etc. when installed it may be treated as plant but it is more closely covered under machinery. It is settled law that specific entry exclude general entry and entry which is more close is to be preferred. Reliance is placed on the decision of the Apex Court in the case of State of Maharashtra v. Bachame of India reported in 2005 AIR SCW, 894.
20. It is settled principle of law that the interpretation, which is more beneficial to the subject is to be adopted, if two constructions are possible. Reliance is placed in the case of Shakti Lace Factory v. Commissioner of Sales Tax, reported in 1982 UPTC, 814, Mahalakshmi Polyplast (P) Limited v. State of U.P., reported in 1990 UPTC, 956, Commissioner of Income Tax, West Bengal II, Calcutta v. Naga Hills Tea Co. Ltd., reported in AIR 1973 (SC), 2524, Commissioner of Income-tax, Punjab v. Kulu Valley Transport Co. (P) Ltd., reported in AIR 1970 (SC), 1734 (1970 UPTC, 614), Income Tax Officer, Tuticorin v. T.S. Devinatha Nadar, reported in AIR 1968 (SC), 623, Krishi Utpadan Mandi Samiti v. Pilibhit, reported in 2004 (1) SC, 291.
21. In this view of the matter it would be more appropriate to classify diesel generator set as machinery. In the case of Mir Mohd. Ali (Supra) Apex Court held that diesel engine is not plant or part of plant and held as machinery.
22. The decisions cited by learned Standing Counsel are not applicable to the present case. In the case of Scientific Engineering House (Private) Limited v. CIT, reported in (1986) 1 SCC, 11. Apex Court held as follows:
"The classic definition of 'plant' was given by Lindley, L.J. in Yarmouth v. France, reported in (1887) 19 QBD, 647 - a case in which it was decided that a curt-horse was plant within the meaning of Section 1(1) of Employers' Liability Act, 1880. The relevant passage occurring at page 658 of the Report runs thus:
"There is no definition of plant in the Act: but, in its ordinary sense, it includes whatever apparatus is used by a businessman for carrying on his business, - not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business. "
In other words, plant would include any article or object fixed or movable, live or dead, used by businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. In order to qualify as plant the article must have some degree of durability, as for instance, in Hinton v. Maden & Ireland Ltd., reported in (1960) 39 ITR 357 (House of Lords), knives and lasts having an average life of three years used in manufacturing shoes were held to he plant. In CIT v. Taj Mahal Hotel, the respondent, which ran a hotel, installed sanitary and pipeline fittings in one of its ranches in respect whereof it claimed development rebate and the question was whether the sanitary and fittings installed fell within the definition of plant given in Section 10(5) of the 1922 Act which was similar to the definition given in Section 43 93) of the 1961 Act and this Court after approving the definition of plant given by Lindley, L.J. in Yarmouth v. France as expounded in Jarrold v. John Good and Sons Ltd, reported in (1962) 40 TC, 681 (CAO held that sanitary and pipeline fittings fell within the definition of plant.
In Indland Revenue Commissioners v. Barclay Curle and Co. Ltd., reported in (1970) 76 ITR 62 (House of Lords) the House of Lords held that a dry dock since it fulfilled the function of a plant must be held to be a plant. Lord Reid considered the part which a dry dock played in the assessee company's operations and observed:
"It seems to me that every part of this dry dock plays an essential part.........The whole dock is, I think, the means by which, or plant with which, the operation is performed.
Lord finest indicated a functional test in these words:
In order to decide whether a particular subject is an 'apparatus' it seems obvious that an inquiry has to be made as to what operation it performs. The functional test is, therefore, essential at any rate as a preliminary.
In other words the test would be: Does the article fulfil the function of a plant in the assessee's trading activity ? It is a tool of his trade with which he carries on his business ? If the answer is in the affirmative it will be a plant."
23. Union of India v. India Charge Chrome and Anr., reported in (1999) 7 SCC, 314 is not applicable in the present case. The dispute was not relating to the dispute involved in the present case.
24. For the assessment year 1997-98 assessing authority in the original assessment proceeding taxed diesel generator set as machinery. Later on order was modified under Section 22 of the Act and the tax has been levied treating it as unclassified item. Under Section 22 of the Act only mistake apparent on the face of the record can be rectified. The mistake which involve debate or investigation of fact and two opinions are possible is beyond the scope of Section 22 of the Act. Reliance is placed on the decision of the Apex Court in the case of T.S. Balaram, Income-Tax, Company Circle IV, Bombay v. Volkart Brothers and Ors., reported in 82 ITR, 50 and Division Bench of this Court in the case of Concrete Super Pipe v. STO, reported in 24 STC, 48.
25. For the assessment year 1995-97 assessing authority has treated the diesel generator set as unclassified item and not as plant required for generation of electrical energy. Only those items can be treated as unclassified item, which can not be classified. When the machinery is classified and diesel generator set is held to be machinery, there was no justification to tax diesel generating set as an unclassified item.
26. For the reasons stated above, order of Tribunal is upheld.
27. In the result, all the revisions fail and are accordingly, dismissed.