JUDGMENT
K. Shivashankar Bhat, J.
1. The questions involved pertain to the taxability of pipes, pumps, engines, motor, etc., sold as part of a sprinkler system under entry 20 of the Second Schedule to the Karnataka Sales Tax Act, 1957 (“the Act”, for short). The Commissioner of Commercial Taxes issued a clarification that these are to be taxed under the said entry. It reads :
“All machinery and spare parts and accessories thereof.”
2. The petitioners contend that pipes, pumps, etc., are articles having independent use and they are bought or sold for various uses and these articles referred in the Commissioner’s clarification dated May 25, 1987, are not accessories to a “sprinkler”, while the Revenue supports its attempt to rope in these articles under entry 20.
3. Therefore, the question is whether those articles like pipes in common use, which can be and are used elsewhere, also would not be “accessories”, just because, they are sold along with the sprinklers or by the dealer in sprinklers.
4. It is quite likely that a person intending to have sprinklers installed in his garden or lawn, may purchase long pipes and other articles necessary to convey water to the sprinkler; such articles would not be exclusively manufactured for adoption in the user of sprinklers. These are to be certainly excluded from item 20 of the Second Schedule.
5. But an article sold as adjunct to the sprinkler system which are adopted by use in the sprinkler system, would fall under the concept of accessories to sprinkler. Question of an article being used for elegance, comfort or style, in the case of a sprinkler would not arise. But, for the effective use of the sprinkler and as an aid to its functioning some of the pipes, etc., may be necessary and are probably used. Such articles are to be held as accessories.
6. The assumption of the Commissioner in his clarification dated May 25, 1987, that whatever is sold as part of the contract of sale of sprinkler system, is taxable under entry 20, as machinery, is not correct. The articles like pipes, pumps, engines, motor, etc., which are usable elsewhere and used independently of the sprinkler system, cannot fall under entry 20, only because they are purchased for the purpose of installing a sprinkler and operate the same.
7. Entry 20 does not refer to “sprinkler system”; it refers to “machineries”. “Sprinkler” as such is “machinery” according to this Court, as held in S.T.R.P. Nos. 6 and 7 of 1981 (D.D. July 17, 1984) (Premier Irrigation Equipment Pvt. Ltd v. State of Karnataka). The pipes conveying water to the sprinkler, if it is to be held as an accessory, a railway line also has to be held as an accessory to the engine of the train; since the engine cannot move on without the railway line. The mechanism of a sprinkler has been explained in the case of Premier Irrigation Equipment Pvt. Ltd., referred to above (S.T.R.P. Nos. 6 and 7 of 1981 decided on 17th July, 1984 – Karnataka High Court). It is stated :
“The operation of the water-sprinkler with which we are concerned has been explained in a note prepared by the Regional Manager of the assessee-company. That note has been produced before the taxing authorities and it reads :
‘Water under pressure (from overhead tank, etc.) coming from pipes is connected to sprinkler. Water comes out through jet and hits the swing arm and pushes it away. This swing arm due to spin comes back and hits the body on which it is mounted. This impact results in the whole body moving slightly by a few degrees. Repeated such movements make the sprinkler rotate continuously in full circle, throwing water all round’.
A sample of the sprinkler has also been produced before us. It contains several parts. The parts are scientifically connected with each other. The water that is let in, will come out through the jet and hits the swing arm causing movement of the top portion of the sprinkler. This impact of the water results in the whole body moving slightly by few degrees. Repeated such movements make the sprinkler rotate continuously in full circle throwing water all round. The jet of water effects the combined movement of the several parts of the device. Each part in the device may not be in a position to evoke or effect any definite or specific result. It is the combined movement of all the parts that produces the definite and specific result by which the water is sprayed all around. None could therefore, say that this contrivance is not a machinery.”
8. A few sentences later, again, the court observed that :
“The water sprinkler does evoke force with the object of effecting a definite or specific result. When water comes out through the jet and hits the swing arm, a force is generated resulting in the movement of the whole body. Repeated such movements make the sprinkler to rotate continuously in full circle throwing water all round. It does therefore evoke, or direct natural forces with the object of effecting a definite and specific result.”
9. Sprinkler operates by the force of the water, which it spreads around. That is the purpose of installing a sprinkler. To add beauty or being elegance to the lawn or garden, if a particular sprinkler is installed with such aids, i.e., some special type of pipes or stands, they may fall within the concept of an accessory.
10. On the question of “car seat covers”, as to whether they are accessories of motor vehicles, before answering, the Supreme Court posed the question thus, in Mehra Bros. v. Joint Commercial Tax Officer (C.A. Nos. 1367 and 1368 of 1975, dated November 14, 1990) (Reported in [1991] 80 STC 233).
11. The question, therefore, is “whether car seat covers are articles adapted generally as parts and accessories of the motor vehicle”. Thereafter, Supreme Court proceeded to say :
“In Webster’s Comprehensive Dictionary International, Vol. 1, the word ‘accessory’ has been defined as a thing that aids subordinately; an adjunct; appurtenance; accompaniment such items of apparel as complete an outfit, (2) aiding the principal design, or assisting subordinately the chief agent and (3) contributory; supplemental; additional.”
12. However, it was pointed out that the accessories are not necessarily confined to a particular machine, for which they may serve as aids and that some item may be accessory of more than one kind of instrument. The correct test to he applied, was stated as :
“In our view the correct test would be whether the article or articles in question would be an adjunct or an accompaniment or an addition for the convenient use of another part of the vehicle or adds to the beauty, elegance or comfort for the use of the motor vehicle or a supplementary or secondary to the main or primary importance. Whether an article or part is an accessory cannot be decided with reference to its necessity to its effective use of the vehicle as a whole. General adaptability may he relevant but may not by itself be conclusive.”
13. Axle, steering, tyres, battery, etc., are referred as “necessary accessories” of motor vehicles in this decision. Seat covers upholstery were held to he accessories as an addition, an adjunct, etc., and found that the seat covers were manufactured and sold as an automobile part in the regular course of business.
14. Regarding this test, earlier, it was observed :
“Another test may be whether a particular article or articles or parts, can be said to be available for sale in an automobile market or shops or places of manufacture; if the dealer says it to he available certainly such an article or part would be manufactured or kept for sale only as an accessory for the use in the motor vehicle. Of course, this may not also be a conclusive test but it is given only by way of illustration.”
15. “Are carbon” is mainly used for production of powerful light used in projectors in cinemas and therefore it was held to be accessory required for use in “cinematographic equipment” in the decision of the Supreme Court in Annapurna Carbon Industries Co. v. State of Andhra Pradesh [1976] 37 STC 378.
16. Entry 20 of the Second Schedule does not levy a tax with reference to a “system”, as assumed by the Commissioner. The subject of levy is “machinery”. Question is whether whatever is sold with a sprinkler for its installation and use will be an accessory. There are motors which are installed to lift water; similar is the case with pumps and engines; there are pipes to draw water generally. At the time of purchasing a sprinkler, if the purchaser also purchases a water pump or a motor or a length of pipe with the idea of using them not only for the sprinkler but also for other purposes, though the purchaser may not specifically say that he was not purchasing them as part of the sprinkler system, the clarification issued by the Commissioner may compel the assessing authority to levy tax thereupon under entry 20 of the Second Schedule. Similarly, the clarification can he easily defeated by a purchaser asking for engines, motor, etc., separately, eventhough, his real intention is to have them fitted as part of sprinkler system. Therefore, the phrase “sprinkler system” instead of clarifying the situation, creates problems in implementation of the provisions. The test is to see whether any article sold is an accessory to a “sprinkler’, independently of the vague concept “sprinkler system”. The assessing authority is not expected to visit the purchaser to see whether he has been utilising the articles purchased by him as part of a “system”.
17. In the context of the sprinkler and having regard to its user and purposes, as an article of commerce, the test to be applied will be the one applied in Mehra Bros. case as to whether the articles are adapted generally as parts and accessories of the sprinkler.
18. Initially writ petitions were filed immediately on the issuance of the circular by the Commissioner dated May 25, 1987. Though writ petitions were entertained, proceedings were not stayed. During the pendency of these writ petitions assessment orders have been made substantially applying the Commissioner’s circular. As we are of the view that the circular does not reflect the correct view of the matter, it is liable to be ignored. Assessing authorities are directed to make fresh orders, after considering the question in the light of this decision as to the meaning of “accessories” in relation to a sprinkler; each article has to be examined afresh to consider whether it is an accessory in the light of this order.
19. Consequently, these petitions are allowed and we set aside the circular of the Commissioner of Commercial Taxes dated May 25, 1987, issued as per No. CLR. CR. 26/87-88. We also set aside all the impugned assessments so far as they apply item 20 of the Second Schedule to the Act to the various articles, as accessories to sprinklers and direct the respondent-assessing authority to make fresh orders, in accordance with law and in the light of the observations made above. Rule is made absolute.
We make no order as to costs.
20. Writ petitions allowed.