Page 151 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] IN RE : ATRIWAL AMUSEMENT PARK 85
2………………”Plant” is a very wide term. Supreme Court observed
that the word must be construed in its popular sense and that the
very fact that even books and surgical instruments have been in-
cluded showed the meaning to be given to “Plant” was wide. The
Court referred to the decision in Jarrold’s case 1982 (40) TC 681
(C.A.), assets such as heating, air-conditioning and water-softening
installations were held to fall within the meaning of ‘plant’ in the
English judgment, although they played a passive role. Supreme
Court held that sanitary fittings in the bathroom in a hotel would be
‘plant’ within the ambit of Section 10(5) I.T. In C.I.T. v. Tajmahal Ho-
tel - (1971) 82 I.T.R. 44 (SC). It was held by Allahabad High Court
that “the word ‘plant’ in common parlance included within its
meaning buildings and equipments used for manufacturing pur-
poses” C.I.T. v. Kanodia Cold Storage - (1975) UP'I'C 169, ‘plant’ has
been defined as machinery, fixtures, etc. used in industrial process
vide Words & Phrases of Central Excise & Customs - S.B. Sarkar p.
532.
(7.2) Again, in the matter of Vivek Alloys Limited v. Commissioner of C. Ex..
Coimbatore, reported in 1998 (98) E.L.T. 156 (Tribunal) the Honorable
[Tribunal] stated as under :
13. For the purpose of Income Tax Act, capital goods include ap-
pliances used for the purpose of trade or business. The definition of
“capital goods” in the explanation to Rule 57Q of the Rules follows
quite a different scheme. The sub-rule itself referred to capital
goods used by the Manufacturer in his factory. Explanation 1(a) re-
fers to Machines, Machinery, Plant, Equipment, apparatus, tools or
appliances used for producing or processing of any goods or for
bringing about any change in any substance for the manufacture of
final products. Considering the scheme of Rule 57Q, the definition
in Explanation 1(a) of capital goods, as meaning machines, equip-
ments, apparatus, tools, appliances used for producing or pro-
cessing the goods etc., clearly indicate the intention of the rule mak-
ing authority to give the wider meaning to the expression ‘plant’
but to give a narrower meaning which is suitable in the context.
“Plant”, therefore, could be regarded as machine or group of ma-
chines fitted in such a manner as to serve the purpose of manufac-
turing any particular product, and the whole system of machine has
to be regarded as Plant.
(7.3) The Karnataka High Court in the matter of J.K. Cement Works v. State
of Karnataka reported in 2017 (7) G.S.T.L. 408 (Kar.) came to the con-
clusion that Cement although specified in Fifth Schedule, since it is
used for laying foundation and erection of cement manufacturing
plant and machinery, prior to commencement of commercial pro-
duction, constitutes part and parcel of ‘plant’ and thus ‘capital
goods’ used for manufacturing of cement later on. In the order, at
para 11 and 12 the Honorable High Court stated as under :
11. We see no justification in the contention of the Learned Addi-
tional Government Advocate appearing for the Revenue that a nar-
row meaning should be given to the word “Plant” and restrict it to
the value or cost of purchase of plant itself. The plant and machin-
ery for manufacturing of cement by itself would be nothing and
would be useless, unless they are properly installed and erected
GST LAW TIMES  3rd September 2020  167