Full Judgment Text
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PETITIONER:
STATE OF U.P. & OTHERS
Vs.
RESPONDENT:
M/S. INDIAN HUME PIPE CO. LTD.
DATE OF JUDGMENT03/03/1977
BENCH:
FAZALALI, SYED MURTAZA
BENCH:
FAZALALI, SYED MURTAZA
BHAGWATI, P.N.
CITATION:
1977 AIR 1132 1977 SCR (3) 120
1977 SCC (2) 724
CITATOR INFO :
R 1980 SC 611 (4)
ACT:
Constitution of India--Article 136--Practice of Supreme
Court--Interference with discretionary orders of High
Court--Article 226--Whether High Court should
interfere--Alternative remedies.
Interpretation--Articles used for business
purposes--Whether in commercial sense--U.P. Sales Tax
Act--Meaning of sanitary fittings.
HEADNOTE:
The respondent manufactures and sells hume pipes and
high quality and high pressure pipes. The pipes are rein-
forced concrete pipes. The U.P. Government issued a noti-
fication under the U.P. Sales Tax Act providing that "sani-
tary fittings" were to be taxed at 7 per cent instead of 2
per cent. The Saks Tax Officer treated hume pipes supplies
by the respondent as sanitary fittings and imposed sales tax
@ 7 per cent. The respondent filed a writ petition in the
High Court assailing the order of the Sales Tax Officer on
the ground that the hume pipes manufactured by the assessee
could not by. any stretch of imagination he construed to be
sanitary fittings nor were they ever used as such. The High
Court after perusing the materials on record and hearing
counsel accepted the plea of the respondent and held that
the hume pipes could not be treated as sanitary fittings.
The High Court accordingly quashed the assessment made by
the Sales Tax Officer. The respondent also filed certifi-
cates of Local Self Government Engineering Department, U.P.
to show that the pipes supplied by the respondent were
not used as sanitary fittings. The said certificate has
been signed by the Executive Engineer on behalf of the’
Chief Engineer of the department.
In an appeal by certificate the appellant
contended:
(1) High Court should not have entertained
the writ petition and should have allowed the
assessee to avail of the remedies provided to
him under the U.P. Sales Tax Act particularly
when question of fact had to be determined.
(2) On merits the conclusion of the High
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Court that hume pipes are nOt sanitary fit-
tings is erroneous, Dismissing the appeal by
certificate.
Held:(1) The Court negatived the contention of the
appellant that the High Court ought not to have entertained
the writ petition and should have allowed the assessee to
avail of the remedies provided to him under the U.P. Sales
Tax Act. In the present case, whether the hume pipes
manufactured and sold by the respondent were sanitary fir-
ings was a question of law and since the entire material on
the basis of which this question could be determined was
placed before the Sales Tax Officer and had pointed in one
and only one direction, namely, that the hume pipes were not
sanitary fittings and there was nothing to show otherwise,
the High Court was justified in entertaining the writ
petition. There is no rule of law that the High Court
should not entertain a writ petition where an alternative
remedy is available to a party. It is always a matter of
discretion and if the discretion has not been exercised by
the High Court unreasonably or perversely, it is the settled
practice of this Court not to interfere with the exercise
of discretion by the High Court. In these circumstances
this Court would not be justified in the interest of justice
to interfere under Article 136 of the Constitution to quash
the order of the High Court merely on that ground after
having found that the order was legally correct. [124
B-E]
(2) It is well-settled that in construcing the articles
used for business purposes the terms must be interpreted in
a purely commercial sense. [123 B-C]
121
Ramavatar Budhaiprasad etc. v. Assistant Sales Tax
Officer, Akola (1962) 1 SCR 279, 282, followed.
The King v. Planters Nut and Chocolate Company Ltd.,
(1951) Canada L.R.. Ex. Court 122. 126 approved.
So construed by sanitary fittings one only understands
such pipes or materials as are used in lavatories, urinals
or bath rooms of private houses or public buildings. In
the present case there was absolutely no material before the
Sales Tax Officer to show that any of the hume pipes manu-
factured and sold by the respondent were meant for use in
lavatories. urinals or bath rooms and. in fact. the material
was used entirely the other way. the Sales Tax Officer was
not at all justified in holding that they were sanitary
fittings [123 F-H]
(3) The Sales Tax Officer does not appear to have ap-
plied his mind at all to the reasons as to how and why hume
pipes could be treated as sanitary fittings. The re-
spondent had filed an application before the Sales
Tax Officer wherein he had clearly alleged substantial facts
showing that the hume pipes could never be used as sanitary
fittings; that it is only the G.I.P. Pipes or other kinds of
pipes which are used in lavatories, urinals and bath rooms
which could be termed as sanitary fittings. The respondent
had placed a large catena of materials in the shape of
certificates from technical experts, engineers and highly
reputed dealers in sanitary fittings that hume pipes are
never used as sanitary fittings. Even where a hume pipe is
used for carrying the escrated material from the Commode to
the Sceptic tank that may be treated as sanitary fittings.
The appellant in his counter affidavit before the High Court
did not controvert any of the facts mentioned by the re-
spondent, The State produced no material to controvert the
facts. [122 D-G--123A]
(4) The Court observed that if at any time the material
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produced before the Sales Tax Authorities establishes that
in a given case hume pipes were meant to be used in the
bath rooms, urinals and lavatories etc., then the notifica-
tion of the Government would be attracted. [124 A-B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 784 of 1972.
(From the Judgment and Order dated 29-9-1970 of the Allaha-
bad High Court in Civil Misc. Writ No. 1111/70).
S.C. Manchanda and O.P. Rana, for the appellants.
S.V. Gupte, S.V. Vaidya, K. Rajendra Chaudhary and Mrs.
Veena Devi Khanna, for the respondent.
The Judgment of the Court. was delivered by
FAZAL ALI, J. This appeal by certificate raises a short
question of law as to whether or not hume pipes which are
the subject-matter of the. present case amount to "sanitary
fittings" as contemplated by a notification issued by the
Government under the U.P. Sales Tax Act. The respondent is a
dealer engaged in the manufacture and supply of hume pipes.
The pipes manufactured by the respondent are reinforced with
cement concrete pipes and the respondent also manufactures
high quality and high pressure pipes like prestressed
concrete pipes for water supply, R.C.C. pressure pipes,
penstock pipes used in hydroelectric projects etc. The
respondent was a supplier of pipes to various Governmental
Departments both Central and State, such as Irrigation,
Public Works, Local Self Government Engineering, Railways
and Ministry of Petroleum etc. It appears that a dispute
arose between the respondent and the Sales Tax Department
with respect to the
122
rate of tax for sale a-pipes manufactured by the respondent
for the assessment years 1962-63, 1963-64 and 1964-65,
According to the notification issued by. the Government in
pursuance of the U.P. Sales Tax Act, items classed as
"sanitary fittings" were to be taxed at 7% instead of 2 %.
The Sales Tax Officer treated the hume pipes supplied by the
respondent as "sanitary fittings" and imposed sales tax at
the rate of 7 %. Instead of going in appeal to the Assist-
ant Commissioner (Judicial) the respondent filed a writ
petition in the High Court assailing the order of the Sales
Tax Officer on the ground that the hume pipes manufactured
by the assessee could not, by any stretch of imagination, be
construed to be "sanitary fittings", nor were they ever used
as such. The High Court, after hearing counsel for the
parties and after perusing the materials on the record,
accepted the plea of the respondent and held that the hume
pipes could not be treated as "sanitary fittings" and the
Sales Tax Officer was., therefore, not entitled to levy tax
at the rate of 7%. The High Court accordingly quashed the
assessments made by the Sales Tax Officer and hence this
appeal by the Department after obtaining a certificate. from
the High Court.
In our opinion, the facts of this appeal lie within
a very narrow compass. The only point which arises for.
consideration is whether or not the hume pipes manufactured
by the respondent could be said to be "sanitary fittings".
The notification dated September 1, 1966 amended the
existing entry as "sanitary goods and fittings" but in these
assessment years-we are concerned with the entry as it
stood unamended. The Sales Tax Officer does not appear to
have applied his mind at all to the reasons as to how and
why hume pipes could be treated as sanitary fittings..
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Apart from his ipsi dixit that hume pipes amounted to sani-
tary fittings, he based his order on no other material. The
respondent had filed an application before the Sales Tax
Officer wherein he had clearly alleged substantial facts
showing that the hume pipes could never be used as "sanitary
fittings"; It is only the G.I. pipes or other kinds of
pipes which are used in lavatories, urinals and bath-rooms
which can be termed as ’sanitary fittings". Neither the con-
tract nor the tender by the respondent show the exact use
for which the hume pipes were meant. On the other hand the
respondent had produced a large catena of materials in the
shape of certificates from technical experts, Engineers and
highly reputed dealers in sanitary fittings to show that
hume pipes are never used as sanitary fittings. In spite of
these materials, the State, when it filed its counter-affi-
davit before the High Court, did not controvert any of the
facts mentioned by the respondent, vide paragraphs 4, 5 and
6 of the counter-affidavit filed before the High Court. The
materials consist of certificates by Local Self Government
Engineering Department, U.P., to show that the pipes sup-
plied by the respondent were not used as "sanitary fit-
tings". This certificate appears at p. 34 of the Paper Book
and shows that R.C.C.Pipes purchased from the respondent had
not been used as sanitary fittings by the L.S.G.E. Depart-
ment. This certificate is signed by the Executive Engi-
neer: on behalf of the Chief Engineer of the Department.
From pp. 36-39 and 41 of the Paper Book appear the certifi-
cates given by certain reputed dealers in sanitary goods and
fittings, who have categorically certified that the hume
pipes are never
123
recognised as sanitary-wares or sanitary fittings. As
against this, the State produced no materials to controvert
these facts, which could not be brushed aside. At p. 40
there is a certificate by the Ex. Special Engineer, Bombay
Municipal Corporation and Ex. Director, Central Public
Health Engineering Research Institute, Nagpur, in which he
has clearly observed that sanitary-wares and sanitary fit-
tings are applicable to fittings used in the household for
W.Cs. wash-basins, traps, sinks etc. and, therefore, hume
and R.C.C. pipes cannot be recognised as sanitary-wares or,
sanitary fittings. As against this, the State produced no
material to controvert these facts.
It is well settled that when we are dealing with the
articles used for business purposes, the terms must be
interpreted in a purely commercial sense. In Ramavatar
Budhaiprasad etc. v. Assistant Sales Tax Officer, Akola(1)
this Court, while construing the import of the word "vegeta-
bles", observed as follows:
"But this word must be construed not in
any technical sense nor from the botanical
point of view but as understood in common
parlance. It has not been defined in the Act
and being a word of every day use it must be
construed in its popular sense meaning "that
sense which people conversant with the subject
matter with which the statute is dealing
would attribute to it." It is to be construed
as understood in common language;"
To the same effect is a decision of the Exchequer Court of
Canada in The King. v. Planters Nut and Chocolate Company
Limited(2) where the Court observed as follows:
"The words "fruit" and "vegetable" are
not defined in the Act and so far as ’I am
aware they are not defined in any other Act in
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pari material. They are ordinary words in
every-day use and are therefore to be con-
strued according to their popular sense".
In these circumstances, therefore, we have to construe
the expression "sanitary fittings" in the popular sense of
the term as it is used in our every-day life. Thus constru-
ing, it would be manifest that there could be no question of
use of R.C.C. or hume pipes which are generally laid
underground and are extremely heavy. for the purpose of use
in lavatories, urinals or bath-rooms etc. By "sanitary
fittings" we only understand such pipes or materials as are
used in lavatories, urinals or bath-rooms of private houses
or public buildings. Even where a hume pipe is used for
carrying, the secreted material from the commode to the
septic tank that may be treated as sanitary fittings. In
the instant case as there was. absolutely no material before
the Sales Tax Officer to show that any of the hume pipes
manufactured and sold by the respondent were meant for use
in lavatories, urinals or bath-rooms and in fact the materi-
al was used entirely the other way, the Sales Tax Officer
was not at all justified in holding that they were sanitary
fittings.
(1) [1962] 1 S.C.R. 279, 282.
(2) (1951) Canada L.R. Ex. Court 122 126
124
Of course, we must make it clear that if at any time the
material produced before the Sales Tax authorities estab-
lishes that in a given case the hume pipes were meant for
use in a bathroom, lavatory, urinal etc.. then the. notifi-
cation of the Government would attracted and the assessee
must be liable to be taxed at the rate of 7%.
Lastly, it was feebly argued by Mr. Manchanda that the
High Court ought not to have entertained the writ petition
and should have allowed the assessee to avail of the reme-
dies provided to him under the U.P. Sales. Tax Act, particu-
larly when questions of fact had to be determined. In the
instant case, the question as to what is the true connota-
tion of the words "sanitary fittings" and whether the hume
pipes manufactured and sold by the respondent were sanitary
fittings within the meaning of that expression was a ques-
tion of law and since the entire material on the basis of
which this question could be determined was placed before
the Sales Tax Officer and it pointed in one and only one
direction, namely, that the hume pipes were not sanitary
fittings and there Was nothing to show otherwise, the High
Court was justified in entertaining the writ petition.
Moreover, there is no rule of law that the High Court should
not entertain. a writ petition where an alternative remedy
is available to a party. It is always a matter of discretion
with the Court and if the discretion has been exercised by
the High Court not unreasonably, or perversely, it is the
settled practice of this Court not to interfere with the
exercise of discretion by the nigh Court. The High Court
in the present case entertained the writ petition and decid-
ed the question of law arising in it and in our opinion
rightly. In these circumstances, therefore, we would not be
justified in the interest of justice in interfering in our
jurisdiction under Art. 136 of the Constitution to quash
the order of the High Court merely on this ground after
having found that the order is legally correct. We are,
therefore, unable to accept this contention.
For these reasons. therefore, we find ourselves in
complete agreement with the view taken by the High Court and
affirm the same. The result is that the appeal fails and is
accordingly dismissed with costs.
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P.H.P. Appeal dismissed.
125