Full Judgment Text
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PETITIONER:
INDO INTERNATIONAL INDUSTRIES
Vs.
RESPONDENT:
COMMISSIONER OF SALES TAX, UTTAR PRADESH.
DATE OF JUDGMENT25/03/1981
BENCH:
TULZAPURKAR, V.D.
BENCH:
TULZAPURKAR, V.D.
VENKATARAMIAH, E.S. (J)
SEN, AMARENDRA NATH (J)
CITATION:
1981 AIR 1079 1981 SCR (3) 294
1981 SCC (2) 528 1981 SCALE (1)582
CITATOR INFO :
R 1985 SC1387 (11)
R 1985 SC1644 (7)
RF 1986 SC1730 (8)
RF 1988 SC1087 (8)
RF 1991 SC 999 (14,15)
ACT:
Uttar Pradesh Sales Tax Act, 1948, Entry No. 39 of the
First Schedule thereto-"Hypodermic clinical syringes"-
whether a glass ware.
HEADNOTE:
Upto November 30, 1973, there were two competing
entries in the First Schedule to the U. P. Sales Tax Act,
1948, so far as the item "hypodermic clinical syringes" is
concerned, namely, Entry 39 which ran: "Glass wares other
than hurricane lantern chimneys, optical lenses and bottles"
and Entry 44 which ran: "Hospital equipment and apparatus"
and for an item falling under the former the rate of tax was
10% while under the latter the rate of tax was 4% and for an
unclassified item the rate was 3-1/2% From December 1, 1973
onwards Entry 44 was deleted and, therefore, if the clinical
syringes did not fall within entry 39 it became an
unclassified item under section 3A(2A) of the U.P. Sales Tax
Act, 1948 and the rate of tax was 7%. In view of this
position that obtained for the relevant periods during the
assessment year 1973-74 the appellant-assessee had claimed
before the assessing authorities that its turnover in
respect of syringes for the period up to November 30, 1973
was liable to tax at 3-1/2%, as an unclassified item or in
the alternative at 4% as "hospital equipment" under Entry 44
and its turnover for the period from December 1, 1973 to
March 31, 1974 was liable to be taxed at 7% as an
unclassified item. But, negativing its contentions the
entire turnover was held to be taxable at the rate of 10% on
the basis that clinical syringes fell within the expression
"glass ware" occurring in Entry 39 and hence the appeal by
special leave on the question whether hypodermic clinical
syringes could be regarded as glass ware.
Allowing the appeal, the Court
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HELD: 1. The assessee’s turnover up to November 30,
1973 will fall under Entry 44 dealing with "hospital
equipment" and the same would be taxable at the rate of 4%
and its turnover from December 1, 1974 will be taxable at
the rate of 7% as an unclassified item. [298 H]
2: 1. It is well settled that in interpreting items in
statutes like the Excise Tax Acts or Sales Tax Acts, whose
primary object is to raise revenue and for which purpose
they classify diverse products, articles and substances
resort should be had not to the scientific and technical
meaning of the terms or expressions used but to their
popular meaning, that is to say, the meaning attached to
them by those dealing in them. If any term or expression has
been defined in the enactment then it must be understood in
the sense in which it is defined
295
but in the absence of any definition being given in the
enactment the meaning of the term in common parlance or
commercial parlance has to be adopted. [297 C-D]
Ramavatar Budhiaprasad etc. v. Assistant Sales Tax
Officer, Akola, [1961] 1 SCR 297 and Commissioner of Sales
Tax, Madhya Pradesh v. Jaswant Singh Charan Singh, [1967] 2
SCR 720, followed.
2 : 2. The clinical syringes which the assessee
manufactures and sells cannot be considered as "glass ware"
falling within Entry 39 of the First Schedule of the Act.
(a) In commercial sense, glass ware would never comprise
articles like clinical syringes, thermometers, lactometers,
and the like which have specialised significance and
utility: (b) in popular or commercial parlance a general
merchant dealing in "glass ware" does not ordinarily deal in
articles like clinical syringes, thermometers etc. which
articles though made of glass, are normally available in
medical stores or with the manufacturers thereof like the
assessee; (c) it is equally unlikely that consumer would ask
for such articles from a glass ware shop. Further in popular
sense when one talks of glass ware such specialised articles
like clinical syringes do not come up to one’s mind. [298 E-
F]
State of Orissa v. Janta Medical Stores, 37 STC 33,
approved.
Commissioner of Sales Tax v. S.S.R. Syringes and
Thermometers, 1973 Law Diary 178, overruled.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 151 of
1981.
Appeal by Special Leave from the Judgment and Order
dated 16.8.1969 of the Addl. Judge (Revisions) Sales Tax,
Saharanpur in Revision Appln. No. 1688/78.
J. Ramamurthi and Miss R. Vaigai for the Appellant.
S. C. Manchanda. B. P. Maheshwari and Suresh Sethi for
the Respondent.
The Judgment of the Court was delivered by
TULZAPURKAR, J. This appeal by special leave raises the
question whether hypodermic clinical syringes could be
regarded as "glass ware" under Entry No. 39 of the First
Schedule to U.P. Sales Tax Act, 1948 ?
The facts giving rise to the question lie in a narrow
compass. The appellant firm (hereinafter called the
assessee) manufactures and sells hypodermic clinical
syringes. For the assessment year 1973-74 the assessee filed
a return disclosing net U.P. sales of such syringes at Rs.
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95,065. The disclosed turnover was accepted by the
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Sales Tax Officer, Sector III Muzaffarnagar, but as regards
the rate of tax the assessee contended that the clinical
syringes in respect of their turnover of Rs.91,513 up to
November 30, 1973 should be regarded as an unclassified item
and taxed at the rate of 3-1/2% or at 4% as "hospital
equipment and apparatus" under Entry 44 of the First
Schedule to the Act and on the turnover of Rs. 3,552/-for
the period from December 1, 1973 to March 31, 1974 at the
rate of 7% as an unclassified item. The Sales Tax Officer,
however, treated the syringes as "glass ware" and taxed the
entire turnover of Rs.95,065/- at the rate of 10% under
Entry No. 39 of the First Schedule. The said assessment was
upheld in appeal by the Assistant Commissioner (Judicial),
Sales Tax, Muzaffarnagar and also in revision by the
Additional Judge (Revision), Sales Tax, Saharanpur on August
16, 1979. It is this view taken by the assessing authorities
as well as by the Additional Judge in revision that is being
challenged by the assessee before us in this appeal.
It may be stated that up to November 30, 1973 there
were two competing entries in the First Schedule to the U.P.
Sales Tax Act so far as the item in question is concerned,
namely, Entry 39 which ran: "Glass wares other than
hurricane lantern chimneys, optical lenses and bottles" and
Entry 44 which ran: "Hospital equipment and apparatus" and
for an item falling under the former the rate of tax was 10%
while under the latter the rate of tax was 4% and for an
unclassified item the rate was 3 1/2%. From December 1, 1973
onwards Entry 44 was deleted and, therefore, if the clinical
syringes did not fall within Entry 39 it became an
unclassified item under s. 3A (2A) of the Act and the rate
of tax was 7%. In view of this position that obtained for
the relevant periods during the assessment year 1973-74 the
assessee had claimed before the assessing authorities that
its turnover in respect of syringes for the period up to
November 30, 1973 was liable to tax at 3 1/2% as an
unclassified item or in the alternative at 4% as "hospital
equipment" under Entry 44 and its turnover for the period
from December 1, 1973 to March 31, 1974 was liable to be
taxed at 7% as an unclassified item. But, negativing its
contentions the entire turnover was held to be taxable at
the rate of 10% on the basis that clinical syringes fell
within the expression "glass ware" occurring in Entry 39.
Counsel for the assessee contended before us that in the
absence of any definition of "glass ware" in the Act that
expression must be understood in the ordinary commercial
parlance and not in any scientific and technical sense and
if such test were applied to the instant case then clinical
syringes manufactured and sold by the
297
assessee could never be regarded as "glass ware". Counsel
pointed out that the Revising Authority negatived the
contention of the assessee in view of a decision of the
Allahabad High Court in the case of Commissioner of Sales
Tax v. S. S. R. Syringes and Thermometers but urged that the
contrary view taken by the Orissa High Court in the case of
State of Orissa v. Janta Medical Stores that thermometers,
lactometers, syringes, eye-glasses, etc. do not come within
the meaning of the expression "glass ware" in Entry No. 38
in the Schedule to the relevant Notification issued under
the first proviso to s. 5(1) of the Orissa Sales Tax Act,
1947 was correct. In our view counsel’s contention has
considerable force and deserves acceptance.
It is well settled that in interpreting items in
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statutes like the Excise Tax Acts or Sales Tax Acts, whose
primary object is to raise revenue and for which purpose
they classify diverse products, articles and substances
resort should be had not to the scientific and technical
meaning of the terms or expressions used but to their
popular meaning, that is to say, the meaning attached to
them by those dealing in them. If any term or expression has
been defined in the enactment then it must be understood in
the sense in which it is defined but in the absence of any
definition being given in the enactment the meaning of the
term in common parlance or commercial parlance has to be
adopted. In Ramavatar Budhiaprasad, etc. v. Assistant Sales
Tax Officer, Akola the question was whether ’betel leaves’
fell within item ’vegetable’ so as to earn exemption from
sales tax and this Court held that word ’vegetable’ had not
been defined in the Act, and that the same must be construed
not in any technical sense nor from the botanical point of
view but as understood in common parlance and so construed
it denoted those classes of vegetable matter which are grown
in kitchen garden and are used for the table and did not
comprise betel leaves within it and, therefore, betel leaves
were not exempt from taxation: In Commissioner of Sales Tax,
Madhya Pradesh v. Jaswant Singh Charan Singh the question
was whether the item ’coal’ under Entry 1 of Part III of
Second Schedule to Madhya Pradesh General Sales Tax Act,
1958 included charcoal or not and this Court observed thus:
"Now, there can be no dispute that while coal is
technically understood as a mineral product, charcoal
is manu-
298
factured by human agency from products like wood and
other things. But it is now well-settled that while
interpreting items in statutes like the Sales Tax Acts,
resort should be had not to the scientific or the
technical meaning of such terms but to their popular
meaning or the meaning attached to them by those
dealing in them, that is to say, to their commercial
sense."
Viewing the question from the above angle this Court further
observed that both a merchant dealing in coal and a consumer
wanting to purchase it would regard coal not in its
geological sense but in the sense as ordinarily understood
and would include ’charcoal’ in the term "coal", and held
that ’charcoal’ fell within the concerned Entry No. 1 of
Part III of Schedule II of the Act.
Having regard to the aforesaid well-settled test the
question is whether clinical syringes could be regarded as
"glass ware" falling within Entry 39 of the First Schedule
to the Act ? It is true that the dictionary meaning of the
expression "glass ware" is "articles made of glass" (See:
Websters New World Dictionary). However, in commercial sense
glass ware would never comprise articles like clinical
syringes, thermometers, lactometers and the like which have
specialised significance and utility. In popular or
commercial parlance a general merchant dealing in "glass
ware" does not ordinarily deal in articles like clinical
syringes, thermometers, lactometers, etc. which articles
though made of glass, are normally available in medical
stores or with the manufacturers thereof like the assessee.
It is equally unlikely that consumer would ask for such
articles from a glass ware shop. In popular sense when one
talks of glass ware such specialised articles like clinical
syringes, thermometers, lactometers and the like do not come
up to one’s mind. Applying the aforesaid test, therefore, we
are clearly of the view that the clinical syringes which the
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assessee manufactures and sells cannot be considered as
"glass ware" falling within Entry 39 of the First Schedule
of the Act.
In our opinion, the view taken by the Orissa High Court
in State of Orissa v. Janta Medical Stores (supra) is
correct and the view of the Allahabad High Court in
Commissioner of Sales Tax v. M/s S.S.R. Syringes and
Thermometers (supra) is unsustainable.
In this view of the matter it is clear that the
assessee’s turnover up to November 30, 1973 will fall under
Entry 44 dealing with
299
"hospital equipment" and the same would be taxable at the
rate of 4% and its turnover from December 1, 1973 to March
31, 1974 will be taxable at the rate 7% as an unclassified
item and the assessment will have to be made accordingly.
In the result the appeal is allowed but there will be
no order as to costs.
S. R. Appeal allowed.
300