Immovable Property

Immovable property is defined by Section 3(26) of the General Clauses Act, 1897 as including land, benefits arising
out of land and things attached to the earth, or permanently fastened to anything attached to the earth. Attached to
earth is defined in section 3 of the Transfer of Property Act as meaning (a) rooted in the earth, as in the case of trees
and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for
the permanent beneficial enjoyment of that to which it is attached.

Intent and extent of annexation:

To ascertain whether the item is permanently attached to earth, English and Indian courts have consistently used two-
fold tests (i) the extent of annexation and (ii) the object of annexation. The extent of annexation means annexing
the fixture or object ceases to be detachable. It would need to be demolished if one were to remove it.

The test lays down that where a movable property gets annexed with an immovable property, if the intent of
annexation is of permanent beneficial enjoyment of the immovable property, then the fixture becomes an immovable
property. If the intent of annexation is the beneficial enjoyment of the movable property, then the property still
remains movable.

Thus, the determination of whether the property is movable or immovable becomes a facts-and-circumstances
question.

In Commissioner of Central Excise vs Solid and Correct Enggg Works: the Supreme Court faced a question on
whether asphalt drums/hot mix plants made by the assessee were immovable property.

It was held that the plants were not per se immovable and they become immovable when embedded in the earth. The
attachment of the plant with nuts and bolts intended to provide stability and prevent vibration is not covered as
attached to earth. The attachment can be easily detachable from the foundation and is not permanent. The plant
moved after road construction or repair project is completed. The plants in question are not immovable property.

A machine fixed with bolts and nuts: movable or immovable?

A decision of Allahabad High Court in Official Liquidator v. Sri Krishna Deo and Ors. [AIR 1959 All. 247],
wherein, the Court held that a machinery fixed to their bases with bolts and nuts although easily removable are not
movable property when they have been set up with definite object of running an oil mill and not with intention of
being removed after a temporary use.

In T.T.G. Industries Ltd. V. CCE, Raipur [2004]: A machine whether movable or immovable-depends on
volume and weight

Conclusion:

English law attaches greater importance to the object of annexation which is determined by the circumstances of each
case.

In Wake V. Halt (1883): The degree and nature of annexation is an important element for consideration; for where a
chattel is so annexed that it cannot be removed without great damage to the land.

Indian law has been developed on similar lines and the mode of annexation and hence, object of annexation may be
applied as relevant test in this country also. However, in the absence of express provisions in the extant laws, the
confusion as to whether a subject matter of a particular contract is goods or immovable property has serious
questions of determination of applicable law.

The subsuming of different taxes into a common GST may go a long way in removing uncertainties in this regard,
but pending that, a General Clauses Act amendment at least creating clear provisions on trade fixtures is most
important.
 Noscitur a Sociis
The principle of Noscitur a Sociis is a rule of construction. It is one of the rules of language used by court to interpret
legislation. This means that, the meaning of an unclear word or phrase should be determined by the words
immediately surrounding it. In other words, the meaning of a word is to be judged by the company it keeps. The
questionable meaning of a doubtful word can be derived from its association with other words. It can be used
wherever a statutory provision contains a word or phrase that is capable of bearing more than one meaning.
This rule is explained in Maxwell on the interpretation of statutes (12th edition ) in following words When two or
more words susceptible of analogous meaning are coupled together, they are understood to be used in their cognate
sense. The words take their colour from and are quantified by each other, the meaning of the general words being
restricted to a sense analogous to that of the less general.
Commissioner of Income Tax v. Bharti cellularit was held that term technical servies used in section 194J of the
Income Tax Act is unclear. The word technical would take colour from the words managerial & consultancy between
which it is sandwiched. These terms managerial services & consultancy services necessarily involve a human
intervention . So applying noscitur a sociis the word technical would also have to be construed as involving a
human element. Thus, interconnection & port access services rendered by the assessee do not involve any human
interface & therefore cannot be regarded as technical services u/s 194J of the Income Tax Act.

Delhi Tribunal in the case of, Parsons Brinckerhoff India (P.) Ltd. vs. Asstt. DIT (Int. Tax) applying the rule
of Noscitur a Sociis held that, the words model and design cannot fall under definition of royalty under
Explanation 2 to section 9 (I) (VI) of the Income Tax Act.

Noscitur a sociis cannot prevail in case where it is clear that the wider words have been deliberately used in order to
make the scope of the defined word correspondingly wider. It can also be applied where the meaning of the words of
wider meaning import is doubtful; but, where the object of the Legislature in using wider words is clear and free from
ambiguity, the rule of construction cannot be applied.
 EFFECT OF REPEAL WITHOUT A SAVING CLAUSE
A repeal therefore without any saving Clause would destroy any proceeding whether not yet begun or whether pending at
time of the enactment of the Repealing Act and not already prosecuted to a final judgment so as to create a vested right; V
Crawford on Statutory Constitution pp. 599-600.