P L D 1998 Karachi 432, (PLP)

1 2 3 (i) Machinery all sorts, not, other wise operated by power of any description (including tractors other than agricultural) such as is used in any industrial process, including the generation, transmission and distribution of power, or used in processes directly connected with the extraction of minerals and timber, construction of buildings, roads, dams, bridges and similar structures, and the manu facture of goods. (ii) Component parts including spare parts of Machinery as defined in item (1) above, which have been given some special shape, size and Quality essential for the use as such. (iii) Apparatus and appliances not other wise specified, specially adapted foe use In conjunction with Machinery an defined in item (1) above (iv) Component parts including span part, of Machinery as defined in item (iii) above, which have been given some special shape, size and quality essential for the use as such. (v) Mechanical and electrical control and transmission gear adapted for use in conjunction with Machinery as defined in item (f) above including baiting all types design ed for use with machinery driving chains with boards switches and or fuses assembled in iron-clad cases copper wires and cables insulated with impregnated paper electrical earthenware and porcelain not other wise specified. (vi)Component parts including spare parts of goods enumerated in item (v) above. Appropriate otherwise items of the of any

3. During the period relating to the assessment year 1954‑55, the respondent, Mess" Premier Maachi Works, Karachi, carried on business as manufacturer of conduit pipes cycle mudguards. The respondent did not file the prescribed return for assessment of sales tax claiming that it was not a manufacturer a producer of conduit pipes. but this plea was not accepted by the Sales Tax Officer, who made the assessment on estimated sales at Rs. 1.80,1300 and levied sales tax or Ra. 15,136 @ 10%.. 1aog aggrieved thereby, the respondent Bled an appeal which was accepted by the Assistant Appellate Commissioner of Sales Tax who, relying mistakenly on an earlier repealed Sales Tax Notification No. 8 dated 27th Jane, 1051, bold that conduit pipes were exempt from the levy of sales tax. the Depart ment then filed an appeal to the Income‑tax Appellate Tribunal. The Tribunal bell that although the Appellate Assistant Commissioner had wrongly relied on the Notification No. 8, dated 2 'd‑6‑51 which had been superseded by the new Notification No. 3‑S. T. dated 15th March 1954 above Quoted, the respondent's product called 'conduit', although it was not Vocidally mentioned 4n the aforesaid Customs Scheduled was in fact (to Quote) "a pipe‑shaped tMng which Is vtai to cover the whinge and its use appear In conjunction with the machinery for eater and proper transmission of electric energy'. Accordingly, it held that the conduit piped appeared to be covered by item (r) read with item (t) of the aforesaid Schedule and was, therefore, exempt from the payment of sales tax thereon.

4. Being dissatisfied with the decision of the Tribunal, the Commissioner of Sales Tax applied to the Tribunal under section 17(l) of the Act, requiring the Tribunal to refer the above‑mentioned question to the Tribunal to refer they above-mentioned question to the High Court. This application, however, war ejected by the Tribunal on the ground that the Tribunal's decision was based on a finding of fact that the respondent's conduit pipe was a "transmission per adapted for use in conjunction with the main machinery. The Commissioner then applied to the High Court under section 17(2) of the said .pct for directing the Tribunal to state a case to the High Court,; The High Court held that when the teems of a notification air in general terms the question whether a particular article is covered by it or not is a question of law. Accordingly it directed the Appellate Tribunal to refer the aforesaid question raised by the Commissioner which has accordingly been referred to the High Court.

5. The High Court has held that as conduit pipe has not been specifically mentioned in item (v) to the Schedule the question whether conduit pipe is covered by the item (v) as a mechanical and electrical control and transmission gear adapted for use in conjuction with the main machinery is a question of law. But Mr. Ali Athar learned counsel for the respondent assess contended that both the Tribunal and the Appellate Assistant Commissioner of Income-Tax had found as a fact that conduit is a transmission gear adapted for use in conjunction with the main machinery as defined in item. Therefore his submission is that the High Court cannot go behind the finding of fact as had it been challenged by the Department the respondent assess could have led evidence to prove the fact. This submission in our opinion is misconceived and cannot prevail because the High Court has held that the question whether the conduit produced by the respondent is a mechanical and electrical control and transmission gear falling in item of the Schedule in a question of Law. The question in our opinion is one of mixed fact and law. The nature character and use of the conduit pipes manufactured by the respondent is a question of fact The tribunal found that conduit is a pipe shaped thing which is used to cover the wiring but it has expressed the opinion that its use appears necessary in conjunction with the main machinery for safer and proper transmission of electric energy However the main question of laws which we have to consider is whether the conduit pipe possessing the property of its use viz to cover the wiring in a mechanical and electrical control and transmission gear adapted for use in conjunction with machinary as defined in item so as to fall within ited of the schedule. As rightly submitted by Mr. Mansoor Ahmad Khan learned counsel for the commissioner it is an accepted general of interpretation that technical words used in an enactment are to be interpreted in technical sense their lordship of the supreme court so observed in Messrs Usman Glass Sheet factory Ltd chillagong v Sales Tax Officer Chittagons and again in Collector of Custom apartment Karachi and other v Hafeez Abdul Majeed Khan and other (1977 SCMR 371) therefore the technical meaning of the words control gear and transmission gear appearing in item have to be consider the word gear has been defined in Webstars new international Dictionary 2nd Edition Vol 1 page 1041 to mean in the machinery trade an accessory mechanism or machine that performs a specific functions in a complete machines a toothed wheel or oog wheel the gear has also been defined in the shortest oxford dictionary 3rd Edition as page 836 to mean an appliance apparatus equipment tackle tool machinery the word transmission but in the machinery trade to mean the gear including the change gear and the propeller shaft or driving chain or chains by which the power is transmitted from engine or an automobile to the live axle. In the electrical trade the word transmission means to pass or convey electricity through a medium generally an electric cable or other transmission line. The Now Universal Encyclopaedia vol VI at page 3001 describes transmission as meaning transmission of electric power over distance by cubic and the British grid system is an illustration of a closely knit transmission system linking 130 major power station with some 4000. miles of trmin lint serving nearly tratehformers and switching Nations and rendering power available through a not work that almost covers the country. The words "transmission line" have also been defined in the " loxsatT of Terms Used in Electrical Engineering", oeesion 5, Tranamiosion and Distribution, under B. S. No. SIOt, to mean "R n electric line latended solely for the transmission of electrical energy from a generating atatio% or a sub‑5udon, to other stations or sub‑stations". It moms to us clear, therefore, readig the said meanings of 'gear' and "transmission' that a "mechani* and elms control and transmission gear"' it nothing but an acrY mechanism or machine for mechanically and electrically WR4tm11149 and PPMSMOUesS power adopted or suitable for use in conjunction with the amen machinery as defined in item (l) of the Schedule. 'lie word 'conduit" ha: boon defined in the said Glossary of Terms Used in Electrical Engineering under B. S. 5421 as "in writing a tube mounted on of in a wag o' ' support intended for the reception of cables for the distribution of electricity''. A conduit in the electrical trade means a tube in wl140b elaehio winos era onoased for their protection and safety in the distribution of electricity and era commonly used en wiring fin domestic houses and other buildings for purposes of either concealed wiring in the walls or for surface wing. But the conduit pipe itself does not "transmit' electric energy. which is transmitted by the lnvulated wires which are encaned in the conduit tulle. In the Beglnner'x Guide to Electric Wiring by F. Guillou A C. Oray, 2nd Edition, page 83. it is stated that In a conduit system the p1ppes made of steel or P. V. C. encasing the insulated wires, are joina4 of screwed to form lengths running into motel junction boxes and boxes that receive switches, ceiling roses, fuaaboards, socket‑outlets as per boxes and other fitti p and electricity is thus distributed to various points of consumption Conduit pipe, as such, in not a mechanical or electrical control and transmission gear or mechanism which is adapted for tae in conjunction with the main macbinery of item (1). The Tribunal haa,~ therefore, misdirected itself in holding that a conduit pipe is necessary for "transmission' of electric energy. More correctly, a conduit pipe is intended.4 for the reception of cables for the dlsar0atien of electric energy. The Tribunal. therefore, erred in holding as a fact that the conduit pipe manufactured by the respondent was aE "transmission gear:. Its finding 1s a mere conjecture without any evidence to‑ support it, Even if, as suggested by Mr. Ali Athar, learned counsel for the respondent this alleged finding of fact bas been accepted by the Department, it would trot be binding on the High Covert. An observed by the Indian Supreme Court in Commissioner of Income-tax, Went 1 v. Calcutta Agency Ltd. ((1951)19 ITR 191), the burden of proving the necessary facts in order to entitle the assessee to claim exemp tion is oa the aasIt was, therefore, ,for tae respondent to establish before the Sales Tax Oscar or the Appellate Authorities the necessary facts to prove its contention that conduit pipe was a mechanical or electrical control and transmission gear. This It has failed to do and in fact its case before the Sales Tax Officer was that It wars not liable to pay sales tax as it was not a manufacturer of producer,

7. We are, therefore, of the opinion that the conduit pipe manufactured by the respondent does not fall within hoes (r) of the Schedule.

8. Mr. Ali Athar, learned counsel for the respondent, urged us to told that conduit pipe falls In item (Ill) or items (r6) to the Schedule as being an apparatus or an appliance, not others speared, specially adapted for use in conjunction with machinery as defined in dam (1) above", or "component parts including spare part of good: enumerated in Item (vi) above". "There is no fading of fact by the Tribunal a to bow the article has been 'specially adapted for use in conjunction with the main machinery, nor how it is a component part thereof. Here, again it was the duty off the respondent, who claimed exemption from payment of sales to have adduced evidence on these questions of fact.

9. For the foregoing reasons, we would answer the question referred to us in the negative, and hold that on the facts and circumstances of the care, conduit pipes manufactured by the respondent, are not entitled exemption from sales tax by virtue of the Sales Tax Notification No. 3‑S. T. dated 15th March, 1954. There will be no order as to costs. Answered in negative