Full Judgment Text
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PETITIONER:
COMMISSIONER OF WEALTH TAX, ORISSA, BHUBANESWAR
Vs.
RESPONDENT:
SMT. BINAPANI CHAKRAVARTY
DATE OF JUDGMENT28/03/1995
BENCH:
MANOHAR SUJATA V. (J)
BENCH:
MANOHAR SUJATA V. (J)
AGRAWAL, S.C. (J)
HANSARIA B.L. (J)
CITATION:
1995 AIR 1380 1995 SCC Supl. (2) 262
JT 1995 (3) 506 1995 SCALE (2)496
ACT:
HEADNOTE:
JUDGMENT:
MRS. SUJATA V. MANOHAR J..-
1.These appeals by special leave from a common judgment of
the High Court of the Orissa in seven Reference Applications
before it under Section 27(1) the Wealth Tax 1957. The High
Court was required to consider the following question:-
"Whether the word ’jewellery’ in section
5(1)(viii) of the Wealth-Tax Act, 1957 prior
to the amendment of the section and the
introduction of the Explanation by the Finance
Act (No.2) of’ 1971 could take in gold
ornaments without precious or semiprecious
stones embedded on them?"
The High Court has answered the question thus:-
"The word ’jewellery’ in section 5(1)(viii) of
the Wealth Tax Act of 1957 prior to amendment
of the provision and introduction of
Explanation 1 by the Finance Act (No.2) of
1971 would not take in gold ornaments without
precious or semi-precious stones embedded on
them."
The Commissioner of Wealth Tax has filed the present appeals
from the above decision.
2. The relevant assessment years are 1965-66 to 1971-72.
The relevant valuation dates are 31st of March of each of
the years in question. We are, therefore, required to
consider the provisions of Section 5(1)(, viii) of the
Wealth Tax Act, 1957 as in force during the relevant period.
Section 5 of the Wealth Tax Act. 1957 deals with exemptions
from wealth tax granted In respect of certain assets.
Section 5(i)(Viii), prior to its amendment by the Finance
Act 2 of 1971, was follows :-
"5(i) : Subject to the provisions of sub-
section (1A) weath-tax shall not be payable by
an assessee in respect of the following
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assets, and such assets shall not be included
in the net wealth of the assessee -
(1) x x x x x
508
x x x x x
(viii) furniture, household utensils,
wearing apparel, provisions and other articles
intended for the personal or household use of
the assessee. "
Section 5(1)(viii) was interpreted in the context of the
provisions of Section 5(1)(xiii) and 5(i)(xv) by this Court
in the case of Commissioner of Wealth-Tax Gujarat v.
Arundhati Balakrishna (77 ITR 505). The Court said that
jewellery intended for the personal use of the assessee
would come within the scope of the exemption granted
under Section 5(1)(viii) -- being "other articles intended
for the personal....... use of the assessee." As a
consequence, the Finance Act 2 of 1971 amended the
provisions of Section 5(1)(viii) with retrospective effect
from 1st of April, 1963, to read as follows :-
"5(1)(viii):furniture, household utensils,
wearing apparel, provisions and other articles
intended for the personal or household use of
the assessee, but not including jewellery."
(underlining ours)
By the same Finance Act of 1971, Explanation 1 was also
added to Section 5(1)(viii). The Explanation, however, was
made effective only prospectively, with effect from
1.4.1972. Explanation 1 is as follows :-
"Explanation 1 : For the purposes of this
clause and clause (xiii), ’’jewellery’ in-
cludes -
(a) ornaments made of gold, silver, platinum
or any other precious metal or any alloy
containing one or more of such precious
metals, whether or not containing any precious
or semi-precious stone, and whether or not
worked or sewn into any wearing apparel;
(b) precious or semi-precious. stones,
whether or not set in any furniture untensil
or other article or worked or sewn into any
wearing apparel."
3. In the present appeals we are concerned with the period
during which the retrospectively amended Section 5(1)(viii)
was in operation but without Explanation 1 (which came into
effect from 1st of April, 1972). We have to consider what
is excluded from the benefit of the exemption granted under
Section 5(1)(viii). Is it only those items of jewellery
which are studded with precious or semi-precious stones or
whether all ornaments and jewellery made out of precious
metals (such as gold, silver or platinum or alloys with
precious metals) are excluded from the exemption, although
they may not be studded with precious or semi-precious
stones?
4.It has been urged before us by the assessee that it is on
account of Explanation 1 to Section 5(1)(viii) that the term
"jewellery" would also include ornaments made only of gold,
silver, platinum or any other precious metal or alloy
containing such precious metal, even though no precious
stones arc embedded in them. It is submitted that in the
absence of such an Explanation during the relevant period,
the term "jewellery" would cover only ornaments studded with
jewels or precious stones. It would not cover in its ambit
ornaments made only of gold, silver, platium or any other
precious metal or alloy.
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5.To interpret the word "jewellery" as such without the
benefit of Explanation 1,
509
we must first consider how the term "jewellery" is
ordinarily understood the New Shorter Oxford Dictionary
"jewellery" is defined as :
"gems or ornaments made or sold by jewellers,
especially precious stones in mountings;
jewels collectively or as a form of adornment.
"
"Jewel" is defined as:
"An article or value used for (personal)
adornment, especially one made of gold,
silver, or precious stones............. a pre-
cious stone, a gem; especially one worn as an
ornament. "
The term "jewel" and "jewellery", therefore, refer to
articles of value for adornment, especially those made from
gold, silver or precious stones. The terms are, therefore,
wide enough to cover not merely precious stones or articles
of adornment made with the use of precious stones, but also
other articles of value made from gold, silver, platinum or
precious metals. Ordinarily speaking, when a person talks
about jewellery, he includes ornaments which arc made of
gold, silver or any other precious metal also irrespective
of whether these articles have precious stones embedded in
them or not.
6.The difference which is sought to be made out between
ornaments which contain precious stones, and ornaments of
gold, silver and platinum which do not have precious stones
embedded in them, appears to be artificial. The term
"jewellery" is not confined in ordinary parlance to only
those ornaments which have precious stones embodded in them.
It covers all articles of value used for adornment. A
jewellery shop normarlly sells not just precious stories or
articles made of precious stones; it certainly sells
ornaments of gold and silver. It may be that in our local
languages, different kinds of bangles, necklaces and other
ornaments carry different and specific names depending upon
their design and craftsmanship. But these are all covered
by the generic term "jewellery."
7. Undoubtedly, the Explanation has been introduced by the
Finance Act of 1971, partly to clarify this position. The
explanation provides an extensive definition of "jewellery."
It includes ornaments made of gold, silver, platinum or any
other precious metal whether or not containing any precious
or semi-precious stones. It also covers, within the meaning
of the term, such items which may or may not be sewn into
any wearing apparel. It also includes precious and
semiprecious stones whether or not set many furniture,
utensils or other article, or worked or sewn into any wear-
ing apparel. The Explanation may have extended the meaning
of "jewellery" to cover, for example, precious stones by
themselves or precious stones set in furniture or utensils.
But insofar as it includes ornaments made of gold, silver,
platinum or any other precious metal or alloy, it is merely
clarificatory in nature. Merely because ornaments made of
gold and silver are now expressly included in Explanation 1,
it is not possible to hold that they were earlier excluded
from the meaning of the term "jewellery."
8. In the case of Commissioner of Wealth-Tax, Delhi-II v.
Smt. Savitri Devi (140 ITR 525), a Division Bench of the
Delhi High Court held that the word "jewellery" as set out
in the dictionaries and as understood in common parlance,
includes gold
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510
ornaments made for personal use. These are almost always a
jeweller’s job and cannot be made by anyone. The Delhi High
Court has held that the Explanation cannot take away the
ordinary meaning of the word "jewellery". The artificially
enlarged meaning as given by the definition in Explanation 1
also includes, by way of abundant caution, the natural
meaning of the term. hence jewellery, even before coming
into force of the Explanation 1, would include gold
ornaments. We agree with the reasoning of the Delhi High
Court. This view is reiterated in Commissioner of Wealth
Tax, Delhi-III. v. Rukmani Devi(142 ITR 41).
9.A similar view has been taken by the Gujarat High Court in
the case of Commissioner of’ Wealth-Tax. Gujarat L v.
Jayantilal Amratlal (102 ITR 105); by the Allahabad High
Court in the case of Commissioner of Wealth-Tax, Lucknow v.
His Highness Maharaja Vibhuti Narain Singh (117 FIR 246),
and by the Madhya Pradesh High Court in the case of
Nandkishore Girdharilal Modi. v. Commissioner of Wealth-Tax,
M.P. (132 ITR 868). Another Bench of the Madhya Pradesh
High Court in the case of Commissioner of Wealth-Tax, MP. v.
Smt. Sonal K. Amin (127 ITR 427) has, however, taken a con"
view. The Calcutta High Court has also taken a contrary
view in the case of Commissioner of Wealth-Tax, West Bengal-
1, Calcutta v. Aditya Vikrant Birla 14 ITR 711. For the
reasons which we have set out above, we do not agree with
the contrary view expressed by the Calcutta High Court in
Aditya vikram Birla’s case (supra) and by the Madhya
Pradesh High Court in Sonal K. Amin’s Case (supra). The
Calcutta High Court has placed some emphasis on different
vernacular terms used for different types of ornaments. In
our view, this is not, in any manner, conclusive of the
question whether the term "jewellery" includes ornaments
made of precious metals such as gold or silver. The
contrary decisions arc, therefore, overruled,
10.In the premises, the appeals are allowed with costs.
511