JUDGMENT
Introduction
[1] These appeals concern the proper construction of the definition of "machinery" in the proviso (b) to the definition of "annual value" under s 2 of the Local Government Act 1976 ("LGA"). The proviso exempts "machinery" for the "making of an article" located in a holding from being rated. Under the scheme of the LGA, rates are payable based on the annual value of a holding.
[2] The dispute has arisen because the appellant, Majlis Daerah Hulu Terengganu, which is the rating authority in the district where the respondent's hydroelectric power station in Kenyir Dam is located, took into account the building as well as the Dam, Diversion Water Tunnel, Tunnel Liners And Pipelines, Spillway And Closure Of Dam Outlet ("the 5 elements") in coming to their assessment that the annual value of the property was RM33,350,000.00.
[3] The High Court held that the 5 elements in the hydroelectronic power station form a single unit of "machinery" required for the process of operating the electricity and each element is interconnected to each other despite the fact that they are physically separated in the sense that the role and functions of each element are important and cannot be separated. According to the High Court, to hold otherwise would make the hydro-electronic power station non-functioning.
[4] Aggrieved by the decision and order of the High Court, the appellant appealed to the Federal Court pursuant to s 145 of the LGA.
Procedural History
[5] Before this Court, there are two appeals by the appellant and a cross-appeal by the respondent. These appeals emanated from the same action by the appellant in the High Court at Kuala Terengganu vide Originating Motion No TA-25-1-01-2018. Initially, the appeal was filed in Civil Appeal No: 01(f)-44-12-2019(T) by way of leave application which was subsequently granted by this court.