R M E WORKS Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THIS is a reference under Section 44 of the M. P. Genera! Sales Tax Act. The Board of Revenue, Madhya Pradesh, Gwalior, has referred the following two questions for answer:

(2.) ENTRY 44 of Part II of Schedule II to the M. P. General Sales Tax Act, 1958, reads thus: Entry 44. All machineries or machines worked by electricity, diesel or petrol and spare parts and accessories thereof excepting agricultural machinery and implements and parts thereof. The assessee sells Ferguson Tractors. The sales tax authorities taxed the sales of the assessee under entry 44 of Part II of Schedule II. The rate for this entry was 7 per cent. However, if the assessee's tractors are considered to be "agricultural machinery", they would be excluded from this entry and since there is no other specific entry to cover tractors, they will have to be taxed under the residuary entry 1 in Part VI of Schedule II, the rate being 4 per cent till 31st July, 1962; thereafter, 5 per cent till 31st March, 1964; and thereafter 6 per cent till 30th June, 1967. It may be mentioned that the rate for the residuary entry also became fixed at 7 percent since 1st September, 1967. All the present five cases before us relate to the period prior to the last-mentioned date, 1st September, 1967.

(3.) AGRICULTURAL engineering has become an increasingly important part of the technical foundation for starting agricultural productivity. Mechanised farming became possible through the use of tractors. Not only has animal power been displaced and human effort reduced, but the greater power and versatility of tractors has also made possible the development and use of heavy-duty deep tillage, cultivating and planting equipment, more effective drainage and irrigation practices, and high capacity harvesting machines. "tractor" is a self-propelled power unit, which is used to pull loads, to carry and operate tillage, cultivating and harvesting machinery, and to provide power through a suitable belt pulley, power take-off, or other power outlet, to drive stationary and drawn implements and machines. Tractors are powered with internal combustion engines. The word "tractor" was coined by combining parts of the words "traction" and "motor". At its early growth in the United States in 1889, the Charter Gas Engine Company built six wheel-type tractors by mounting single cylinder horizontal gasoline engines on Rumely steam-powered traction engine running gears. Due largely to cold weather starting difficulties, these tractors never operated successfully. The first successful gasoline tractor was built in 1892 by John Froelich, an Iowa farmer and blacksmith. It was a 20 H. P. , single cylinder vertical gasoline engine 14 "bore X 14" stroke (36 X 36m ). In addition to propelling itself, its construction was the first to combine three other essential functions, viz. , (1) Friction clutches to engage and disengage the power train and belt pulley. (2) Steering under control of operator. (3) Reverse gearing to permit rearward travel. During the following decade, no less than 18 separate attempts are known to have been made to design and build farm tractors powered with gasoline engines. In 1897, English tractors with oil burning engines were being produced. In 1901, following experimental work started in 1895, C. W. Hart and C. H. Parr of Charles City built the first tractor designed for drawbar rather than belt work. It was powered with a twin-cylinder horizontal gasoline engine, 9" bore X 13" stroke and developed 30 H. P. at 250 rpm. In 1902, the J. I. Case Threshing Machine Company built their first gasoline tractor using a horizontal two-cylinder opposed type engine. In 1905, Hart and Parr established the first factory in the United States devoted exclusively to tractor manufacture, which later became the tractor plant of the Oliver Corporation. In 1904, A. N. Calkins of Electric Wheel Company designed and built the first tractor of record to employ a four-cylinder vertical engine and automobile type (Akkerman) steering. In 1906, Henry Ford built an experimental tractor, using a 24 H, P. four-cylinder vertical automobile engine and a planetary transmission. In 1910, the M. Rumely Co. started to manufacture the first successful oil-cooled kerosene and distillate burning tractor. In 1917, the Electric Wheel Co. produced the first tractor engine designed to burn kerosene and other low cost fuels without the use of water introduced into the fuel-air mixture to control detonation. The same year, the Ford Motor Company undertook the manufacture of the Fordson tractor, which was the first to employ a cast-iron unit frame, which enclosed working parts of the engine, transmission gears and the warm final drive, with all gears running in oil. In 1918, the most significant and important design development of the year was the introduction of the rear power take-off by International Harvester Company. This provided power for the operation of mounted and drawn implements, principally binders and grass mowers directly by the tractor engine -- a feature, which has since been universally accepted (Encyclopaedia Britannica, 1970, Vol. 22 ). Tractors are classified according to whether wheels or tracts are used to provide traction, viz. , two-wheel drive, four-wheel drive, tracklayers and half-tracks.