Tractors are not considered as 'agricultural machinery or implement' for the purpose of liability of sales tax.

( 1 ) IN this reference under Section 44 of the Madhya Pradesh General Sales Tax Act 1958, (hereinafter called the Act), by the Sales Tax Tribunal at the instance of the assessee M/s Agrawal Brothers, Satna, the question which we have been asked to answer is-

"whether on the facts and in the circumstances of the case the sales of tractors, Tractor Parts and implements thereof, for the purpose of liability of sales-tax, fall under entry No. 44 of Part II of Schedule II of m. P. General Sales Tax Act, 1958, and are taxable at the rate of 7 per cent under the provisions of the said Act. "

( 2 ) THE material facts are that in assessment proceedings for the period from 1st april 1959 to 31st March 1960 the Sales Tax Officer, Satna, rejected the assessee's contention that tractors sold by them were "agricultural machinery" and, therefore, the sales of tractors effected by them were not liable to tax at the rate of seven per cent under entry No. 44 of Part II of Schedule II to the Act; and that those transactions could be assessed to tax at the rate of four per cent under the residuary entry in Part VI of that Schedule. The decision of the Sales Tax officer was upheld in first appeal by the Appellate Assistant Commissioner of Sales tax as well as by the Sales Tax Tribunal in second appeal.

( 3 ) ENTRY No. 44 of Part II of Schedule II to the Act is as follows-"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 sale transactions of articles falling under that entry are liable to sales-tax at the rate of seven per cent. Entry No. 1 of Part VI of Schedule II relates to the taxability of "all other goods not included in Schedule I or any other part of this Schedule (Schedule II)". During the material period the sale transactions of articles falling under this entry were subject to tax at the rate of four per cent. While holding that tractors not being "agricultural machinery" were not excluded from entry No. 44, the Sales Tax tribunal observed

"tractors are certainly used extensively for agricultural purposes but they are used for other purposes as well. A tractor, by its nature, is not merely an agricultural machine. According to the Oxford 'new English dictionary' a tractor is a locomotive engine of any kind used for traction of loaded wagons, artillery etc. , on ordinary roads, or for drawing gang-ploughs. So even if tractors are extensively or even largely used for agricultural purposes, they cannot be regarded as 'agricultural machinery'. "

( 4 ) IN our judgment, the question propounded before us must be answered in the affirmative. A tractor is no doubt a machine worked by diesel or petrol. It is a self-propelled vehicle for hauling other vehicles, farm machines, planes etc. It is used on highways, in factories, at air-fields and also on agricultural land as a source of power and motive force. On agricultural land it is used along with agricultural implements such as harrows, ploughs, tillers, blade-terracers seed-drills etc. But a tractor, which is nothing but a self-propelled vehicle capable of pulling a load, does not acquire the character of "agricultural machinery or implement" merely because when used onagricultural land it "drives" certain agricultural implements. Shri singh, learned counsel for the assessee, urged that tractors are of three kinds, namely, farm tractors, industrial tractors and highway tractors, and that the tractors sold by the assessee were farm tractors. The facts found by the Sales Tax tribunal in no way show that the tractors sold by the assessee were farm tractors and could be used only for the purposes of agriculture. On the facts found by the tribunal, it must be held that the tractors sold by the assessee were not "agricultural machiery or implement". The view expressed by us finds support in the decision of the Bombay High Court in Pashabhai Patel and Co. (P) Lt