Full Judgment Text
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PETITIONER:
AVADH SUGAR MILLS LTD.
Vs.
RESPONDENT:
THE SALES TAX OFFICER, SITAPUR & ANOTHER
DATE OF JUDGMENT22/02/1973
BENCH:
HEGDE, K.S.
BENCH:
HEGDE, K.S.
REDDY, P. JAGANMOHAN
KHANNA, HANS RAJ
CITATION:
1973 AIR 2440 1973 SCR (3) 546
1974 SCC (3) 271
CITATOR INFO :
D 1987 SC1316 (3,5)
ACT:
U.P. Sales Tax Act 1948-Purchase tax on oilseeds-Groundnuts
whether oilseeds.
HEADNOTE:
The petitioner appellant purchased groundnuts mostly from
cultivators for the manufacture of oil. Relying on
decisions of the Madhya Pradesh and Punjab High Court he
contended that groundnuts were not oilseeds and thus not
liable to be subjected to purchase-tax under the UP. Sales
Tax Act. The Allahabad High Court rejected the contention.
In appeal by certificate,
HELD : In finding out the true meaning of term ’oilseeds’
found in the Sales-Tax law in question the Court must refer
not to the, dictionary meaning but the meaning ascribed to
the term in commercial parlance. There can hardly be any
doubt that in commercial articles ground nut is dealt with
as oilseed. The commercial journals refer to groundnuts as
a species of oilseeds, [547D-F]
Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant
Singh Charan Singh, (19 S.T.C. 469), relied on.
A seed is one which germinates. It is not disputed that the
groundnut germinates. Hence it is undoubtedly seed. It is
mostly used for the manufacture of groundnut oil which is an
edible oil. The decision relied on by the appellant must
accordingly be held to be wrong and the appeal must be
dismissed. [547F-G]
Commissioner of Sales Tax, Madhya Pradesh, Indore v. Bakhat
Rai & Co. (18 S.T.C. 285) and Hans Rai Choudhri v. J. S.
Rajyana, Excise and Taxation Officer, (19 S.T.C. 489),
disapproved.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1352 of
1970.
Appeal by certificate from the judgment and order dated 7th
day of August 1967 of the Allahabad High Court in Special
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Appeal ’No. 94 of 1967.
M. C. Chagla, Suresh Sethi, R. K. Maheshwari, Maya Krishan
:and B. P. Maheshwari, for the appellant.
N. D. Karkhanis- and O. P. Rana, for the respondents.
The Judgment of the Court was delivered by
HEGDE, J.-This is- an appeal by certificate’ The only ques-
tion that arises for decision is whether groundnut is
oilseed. The High Court has come to the conclusion that the
groundnut is oilseed. The question is ’to the nature of
groundnut came up, for consideration in connection with the
levy of purchase-tax on the purchase of oilseed. The
assessee in this case is a manufacturer of oil and the
assessee appears to have purchased groundnuts in
547
large quantity for the manufacture of oil. He contended
before the assessing authorities as well as before the High
Court, unsuccessfully, that groundnut is not oilseed. In
support of that contention, he relied on the decision of the
Madhya Pradesh High Court in Commissioner of Sales Tax,
Madhya Pradesh, Indore v. Bakhat Rai & Co. (18 S.T.C. 285)
and the decision of a single Judge of Punjab & Haryana High
Court in Hans Raj Choudhri v. J.S. Rajyana, Excise and
Taxation Officer (19 S.T.C. 489). These two decisions
undoubtedly ’support his contention. The learned Judge of
the Allahabad High Court have not accepted those decisions
as laying down the law correctly and we are in agreement
with the view taken by the learned Judges of the Allahabad
High Court..
The petitioner in his Writ Petition has definitely stated
that he purchased groundnuts mostly from cultivators for the
manufacture of oil. Hence there is no doubt that he
purchased groundnut for the purpose of manufacturing oil.
We shall now proceed to consider whether groundnuts are
seeds and further whether they are oilseeds. In finding out
the true meaning of term "oilseeds" found in the Sales-tax
law in question, we are not to refer to dictionaries. We
are to find out the meaning ascribed to that term in
commercial parlance. See the decision of this Court in
Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant
Singh Charan Singh (19 S.T.C. 469). There can hardly be any
doubt that in commercial. circles Ground nut is dealt with
as oilseed. The commercial journals and newspapers while
quoting the market price of oilseeds list groundnuts as one
of the species of oilseeds. From this, it is clear that in
commercial circles groundnut is treated as oilseed.
A seed is one which germinates. It is not disputed that the
groundnut germinates. Hence it is undoubtedly seed. The
next question is whether it is generally used for
manufacture of oil. Here again, there can hardly be any
doubt that groundnut is Mostly. used for the manufacture of
groundnut oil which is used in the manufacture of Dalda and
other cooking media. Groundnut is one of the items which is
mostly used in this country for the manufacture of cooking
media.
In our opinion, both the Madhya Pradesh High Court and the
Punjab & Haryana High Court ’were wrong in holding that’
groundnut is not oilseed.
For the reasons mentioned above, this appeal is dismissed
with costs.
G.C. Appeal dismissed.
548