Full Judgment Text
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PETITIONER:
STATE OF WEST BENGAL & ORS. ETC.
Vs.
RESPONDENT:
LAL CHAND AGARWALLA & ORS. ETC.
DATE OF JUDGMENT24/03/1987
BENCH:
RAY, B.C. (J)
BENCH:
RAY, B.C. (J)
THAKKAR, M.P. (J)
CITATION:
1987 AIR 1316 1987 SCR (2) 621
1987 SCC (2) 504 JT 1987 (1) 758
1987 SCALE (1)584
ACT:
Taxes on Entry of Goods into Calcutta
Metropolitan Area Act, 1970 as amended in 1972
and 1974, section 6 read with Item 4 of Sched-
ule thereto---Exigibility to levy of Entry
tax-Words and phrases-"Groundnut", whether a
"nut’ within the description of the specified
goods under the head "Class I--Articles of
food and drink-"Edibles" attract levy of
duty--In case the purpose of importer is to
extract only oil therefrom, whether exempt
from the levy.
HEADNOTE:
Section 6 of the Taxes on Entry of Goods
into Calcutta Metropulitan Area Act, 1970
provides for imposition of levy and collection
of taxes on the entry of every specified goods
into Calcutta Metropolitan Area (for consump-
tion, use or sale therein) from any place
outside that area at such rate not exceeding
the rates specified in the corresponding entry
in Column 3 of the Schedule as the State
Government may by notification specify. CIasa
specifies articles liable to tax grouped under
the caption of food and drink. Item 4(t)
specifies "nuts excluding beetal nuts" as one
of the items on which the rate of entry tax
has been specifically mentioned therein. Under
the said Class-l in item No.4(u) "oilman
stores (except edible oils)" has been men-
tioned and in Class-3 under heading (b), item
No. 22 refers to oil seeds of inedible oils as
one of the specified items for imposition of
tax.
The respondents who are licensed dealers
under the West Bengal Edible Oil Seed Dealers
Licensing Order, 1963 challenged the imposi-
tion of entry tax on groundnuts imported into
Calcutta Metropolitan Area for the purpose of
manufacture of groundnut oil under the provi-
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sions of the Taxes on Entry of Goods into
Calcutta Metropolitan Area Act, 1970 on the
ground that such importation of groundnuts as
oil seeds is not subject to any levy under the
provisions of the said Entry Tax Act in as
much as there is no specific provision for
levy on groundnuts as oil seeds for manufac-
turing edible oil. The respondents prayed for
a mandate directing the appellants not to
impose any entry tax on the ground that they
are edible nuts failing under specific entry
01 edibles provided in the Schedule to the
said Act, and with a further prayer for refund
of the taxes already imposed and collected by
the
622
respondents. A learned Single Judge of the
Calcutta High Court issued a writ of mandamus
as prayed for. The State appeal against the
judgment and order was dismissed and the
judgment and order of the learned Single Judge
was affirmed. Hence the appeal by special
leave.
Allowing the appeals, the Court,
HELD: 1. On a plain reading of the provi-
sions of the Taxes on Entry of Goods into
Calcutta Metropolitan Area Act, 1970, it is
clear and evident that groundnuts which answer
the description of nuts is excisable to entry
tax under the said Act. Once the goods answer
the description of the item exigible to tax,
under Item 4(t) the importer of such goods
cannot escape liability depending on the use
to which he puts. No question of speculating
about intention of the legislature arises when
"nuts" are in term specified as goods which
are exigible to tax and "groundnuts" fall
under the description of "nuts". That ground-
nuts are nuts is not disputed nor disputable
that it is not so. Groundnuts are "nuts"
whether the same are consumed as they are or
whether they are crushed for extracting
oil--they do not cease to be nuts. [626E-H;
627A-B]
2. The legislative intent to tax nuts
being very clear there is no room for consid-
ering whether groundnut is also oil seed used
for manufacturing edible oil, "why" it is
imported and whether it is exempt from entry
tax on that account. Undoubtedly, nuts include
groundnut also. Though the 1970 Act was re-
placed by the Taxes on Entry of Goods into
Calcutta Metropolitan Area, 1972 making iden-
tical provisions for the imposition of entry
tax on specified goods entering into Calcutta
Metropolitan Area, West Bengal Act XIX of 1974
specifically mentioned in SI.No.4 item No. (u)
for the words "nuts excluding betel nuts" the
words "nuts including groundnuts, cashewnuts
and walnuts but excluding betel nuts" shall
be, and shall be deemed always to have been
substituted. [627B-G]
3. The words "nuts including groundnuts,
cashewnuts and Walnuts but excluding betel
nuts" has been substituted retrospectively for
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the words "nuts excluding betel nuts" in item
No. 4(u). This amendment is clarificatory in
nature and makes explicit what was implicit
out of abundant caution, and clearly puts an
end to all controversies as to whether ground-
nuts imported into Calcutta Metropolitan Area
from outside is liable to imposition of entry
tax. It makes patently clear that groundnuts
as one of the "nuts" was always subject to the
imposition of entry tax under the said Entry
Tax Act. Therefore, the contention that
groundnut imported into Calcutta Metropolitan
623
Area for the purpose of manufacture of ground-
nut oil which is one of the edible oils and
which is exempted from the imposition of levy
of entry tax cannot be sustained any longer in
view of the express provisions of the Act.
[627G-H; 628A-B]
Avadh Sugar Mills Ltd. v. Sales Tax Offi-
cer & Anr., [1973] (Vol. 31) STC 469 (SC),
distinguished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1387 of 1973.
From the Judgment and Order dated
31.5.1973 of the Calcutta High Court in Appeal
from Original Order No. 612 of 1971.
WITH
CIVIL APPEAL NO. 4301 of 1984.
From the Judgment and Order dated 9.9.
1981 of the Calcutta High Court in Appeal from
Original Order (F.M.A.) No. 459 of 1980.
Govind Das and Mr. G.S. Chatterjee for the
Appellants.
D.N. Mukherjee for the Respondents in C.A. No.
1387 of 1973.
A.K. Ganguli and Miss Mridula Ray for the
Respondent in C.A. No. 4301 of 1984.
The Judgment of the Court was delivered by
B.C. RAY, J. Civil appeal No, 1387/73.
This appeal by special leave is against the
judgment and order passed in appeal from
Original Order No.612 of 1971 dated May 31,
1973 by the Division Bench of the High Court
of Calcutta affirming the judgment and order
of the learned Single Judge made in Civil
Revision Case No. 5805 of 1970. The respond-
ents who are licensed dealers under the West
Bengal Edible Oil Seed Dealers Licensing
Order, 1963 have challenged the imposition of
entry tax on groundnuts imported into Calcutta
Metropolitan Area for the purpose of manufac-
ture of groundnut oil under the provisions of
the Taxes on Entry of Goods into Calcutta
Metropolitan Area Act, 1970 on the ground that
such importation of groundnuts as oil seeds is
not subject to any levy under the provisions
of the said Entry Tax Act in as much as there
is no specific provision for levy on ground-
nuts as oil seeds for manufacturing edible
624
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oil. They have therefore prayed for a mandate
directing the appellants not to impose any
entry tax on the ground that they are edible
nuts failing under specific entry of edibles
provides in the Schedule to the said Act.
There was also a prayer or refund of the taxes
already imposed and collected by the respond-
ents.
The learned single Judge who issued the
rule after hearing both the parties held that
though under SI. No. 4, item No. (t) of the
Schedule to the said Act, ’nuts’ was a speci-
fied item for purposes of imposition of entry
tax as shown in corresponding column No. 3 in
the said Schedule yet the learned Judge held
that since groundnut is oil seed for manufac-
turing edible oil which is not subject to
entry tax, the groundnut imported for the
purpose of extracting oil as oil seed by the
dealers was not subject to the imposition of
entry tax. It was further held that the term
groundnut might answer the description of
being nuts used as edibles as also oil seeds
for edible oils. The legislature intended to
impose levy on ’nuts’ imported as edibles and
not to cover such nuts imported as oil seeds
for edible oils. The rule was made absolute
with costs and a writ of mandamus was issued
directing the appellants herein not to impose
any levy under the provisions of the said Act.
There was also a further mandate upon the
appellants herein directing them to refund all
taxes realised under the said Act on groundnut
imported by the petitioners, respondents
herein into Calcutta Metropolitan Area.
Against this judgment and order the appel-
lant State of West Bengal preferred an appeal.
This appeal was dismissed and the judgment and
order of the learned single Judge was af-
firmed. It was held that the intention of the
legislature was that edible oil or oil seeds
would not be liable to tax. The Court refer-
ring to the decision in Avadh Sugar Mills Ltd.
v. Sales Tax Officer & Anr., [1973] (Vol. 31)
STC 469 (S.C.) held that in commercial circle
’groundnut’ was treated as ’oil seed’ for
manufacture of oil. It did not refer to ’nuts’
as such, and as such groundnut did not fail
with the ambit of entry tax as provided in the
said Entry Tax Act. Against this judgment and
order the instant appeal on special leave was
filed.
The sole question that poses itself for
consideration in this appeal is whether
groundnuts falling within the description of
’nuts’ in Schedule in Class-l, item No. 4(t)
is liable to be taxed under the Taxes on Entry
of Goods into Calcutta Metropolitan Area Act,
1970 in case the purpose of importer is to
extract oil therefrom. It has been urged on
behalf of the respondents that oil seeds or
edible oils are not
625
specified items for the purpose of imposition
of entry tax under section 6(1) of the said
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Act. The importation into Calcutta Metropoli-
tan Area of groundnuts by the respondents for
the purpose of manufacturing groundnut oil is
exempt from the levy of entry tax according to
them. It is necessary to quote here the rele-
vant provisions of the Schedule for the pur-
pose of determining this question.
...................................................
.........
Serial No. Specified goods
Rates of tax
1 2
3
...................................................
.....
X X X X Class
I--Articles of food
and drink
4. Edibles--
X X X X
t. nuts, excluding betal nuts 6 per-
cent ad valorem
u. oilman stores (except ( 1/2 per-
cent ad valorem
edible oils) for dry
fruits)
-do-
x x x
x x
Class-III. Articles for industrial
use and articles used for fuel,
lighting, washing and polishing.
A .-- Articles for industrial use
and articles used for fuel.
X X X
X
16. Mineral oils of all sorts--
X X X
X
(xii) Turkey red oil, bye-products 2
paise per litre
of mineral oils
x x
x
(b) Crude oil 1
paise per litre
(c) grease, petroleum jelly 2 percent
ad valorem
B .--Arti-
cles used for
0lighting.
x
22. Oilseeds for inedible oils 50 paise
per 50 kilograms
Section 6 of the said Act provides for
imposition of levy and collection of taxes on
the entry of every specified goods into Cal-
cutta Metropolitan Area (for consumption, use
or sale therein) from any place outside that
area at such rate not exceeding the rates
specified in the corresponding entry in column
No. 3 of this Schedule as the State
626
Government may by notification specify. The
State Government specified the goods entry of
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which into Calcutta Metropolitan Area will be
liable to tax under this Act at the rate
specified in corresponding column No. 3 of the
Schedule. On a reading of the aforesaid Sched-
ule it is clear and evident that Class-I
specifies articles liable to tax grouped under
the caption of food and drink. Item No. 4(t)
specifies nuts excluding betel nuts as one of
the items on which the rate of entry tax has
been specifically mentioned therein. Under the
said Class-I in item No. 4(u) oilman stores
(except edible oils) has been mentioned and in
Class-3 under heading (B) item No. 22 refers
to oil seeds of inedible oil as one of the
specified items for imposition of tax. It has
been urged on behalf of the respondents that a
edible oils are exempted from imposition of
tax under the said Act groundnut which is
imported by the respondent dealers from out-
side the State into Calcutta Metropolitan Area
for the purpose of manufacture of groundnut
oil is exempted from the imposition of entry
tax. It has been further urged in this connec-
tion that a very negligible quantity of
groundnuts is used for edible purposes. The
ground nuts are generally used as oil seeds
for the purpose of manufacturing edible oil
i.e. groundnut oil. It has been submitted that
though groundnut is included within nuts in
item No. 4(t) yet it was rightly held by the
Courts below that ground nuts used as oil
seeds for the purpose of manufacture of
groundnut oil is free from imposition of entry
tax and as such the appeal should be dis-
missed. This contention of the learned counsel
on behalf of the respondents cannot be sus-
tained in as much as ’nuts’ has been specified
as one of the items liable to be taxed under
4(t) for imposition of tax at the rate men-
tioned in corresponding column No. 3. So on a
plain reading of the said provisions it is
clear and evident that groundnuts which answer
the description of nuts is excisable to entry
tax under the said Act. It is unnecessary to
go into the question as to whether groundnut
is also used for the purpose of extracting
edible oil. The observations of this Court in
the case of Avadh Sugar Mills Ltd. v. Sales
Tax Officer & Another (supra) wherein ground-
nut has been taken as oil seed for the purpose
of U.P. Sales Tax Act. This has no beating for
the purpose of imposition of entry tax under
the said Entry Tax Act, 1970 as it has been
mentioned already hereinbefore that under item
No. 4(t) ’nuts’ has been specifically men-
tioned as one of the specified goods for the
imposition of entry tax. Once the goods answer
the description of the item exigible to tax,
the importer of such goods cannot escape
liability depending on the use to which he
puts. No question of speculating about inten-
tion of the legislature arises when ’nuts’ are
in term specified as goods which are exigible
to tax and ’groundnuts’ fall under the de-
scription of ’nuts’. That groundnuts are
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627
nuts is not disputed nor disputable that it is
not so. An extract from Encyclopedia Britanni-
ca also leaves no room for doubt on this score
and even the contention of the respondents is
not that groundnuts are not ’nuts’ but that
when same are imported for extracting oil the
same are not exigible to tax. Groundnuts are
’nuts’ whether the same are consumed as they
are or whether they are crushed for extracting
oil--they do not cease to be nuts. The relevant
extract is appended below as appendix "A".
The legislative intent to tax nuts being very clear
there is no room for considering whether groundnut is also
oil seed used for manufacturing edible oil ’why’ it is
imported and whether it is exempt from entry tax on that
account. Undoubtedly, nuts include groundnut also. The
contention of the respondents in our considered opinion is
totally devoid of any merit and as such it is overruled. It
is very relevant to mention here that the Taxes on Entry of
Goods into Calcutta Metropolitan Area Act, 1970 was replaced
by the Taxes on Entry of Goods into Calcutta Metropolitan
Area Act, 1972 (West Bengal Act V of 1972). In the said Act
identical provision has been made for the imposition of
entry tax on specified goods entering into Calcutta Metro-
politan Area’, at the rates specified in corresponding
column No. 3 of the items mentioned in the Schedule. Class
I, item 4(u) specifies edible nuts excluding betel nuts as
was in the previous Act of 1970. In Entry No. 22 under Class
IV oil seeds of vegetable oils other than mustard, rape,
groundnut etc. was mentioned. In item No. 24 of the said
Class IV vegetable oils, other than mustard oil, groundnut
oil etc. has been specifically mentioned. So this Act of
1972 also specifically mentions ’nuts’ as one of the goods
entry of which into Calcutta Metropolitan Area is subject to
the levy of entry tax. This Act of 1972 was further amended
in 1974 by West Bengal Act XIX of 1974. By the said Act it
has been specifically mentioned in the Schedule to the Taxes
on Entry of Goods into Calcutta Metropolitan Area Act, 1972
in S1. No. 4, item No. (u) for the words ’nuts excluding
betel nuts’ the words ’nuts including groundnuts, cashewnuts
and walnuts but excluding betel nuts’ shah be, and shah be
deemed always to have been, substituted. In other words, the
words ’nuts including groundnuts, cashewnuts and walnuts but
excluding betel nuts’ has been substituted retrospectively
for the words ’nuts excluding betel nuts’ in item No. 4(u).
This amendment is clarificatory in nature and makes explicit
what was implicit out of abundant caution, and clearly puts
an end to all controversies as to whether groundnuts import-
ed into Calcutta Metropolitan Area from outside is liable to
imposition of entry tax. It makes patently clear that
groundnut as one of the ’nuts’ was always
628
subject to the imposition of entry tax under the said Entry
Tax Act. The contention that groundnut imported into Calcut-
ta Metropolitan Area for the purpose of manufacture of
groundnut oil which is one of the edible oils and which is
exempted from the imposition of levy of entry tax cannot be
sustained any longer in view of the express provisions of
the Act.
Considering all these facts and circumstances as well as
considering that nuts excluding betel nuts being one of the
specified goods mentioned in the Schedule to the said Act
clearly bring within its field groundnut; so groundnut
imported into Calcutta Metropolitan Area is liable to the
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imposition of entry tax under the said Entry Tax Act. We
therefore allow this appeal and set aside the judgment and
order passed in Appeal from Original Order No. 612 of 1971
without any order as to costs. The writ petition giving rise
to the appeal will stand dismissed.
In Civil Appeal No. 4301 of 1984 the respondent made a
similar challenge that groundnut which the petitioner im-
ported from outside the State into Calcutta Metropolitan
Area could not be subjected to the levy of entry tax as the
same is used as oil seed for manufacturing edible oil i.e.
groundnut oil which is exempted from the incidence of entry
tax under the said Act.. This challenge was made in 1974
when the Taxes on Entry of Goods into Calcutta Metropolitan
Area Act, 1972 as amended by the Amendment Act (West Bengal
Act XIX of 1974) came into operation. We have already men-
tioned hereinbefore that in the Schedule to the Taxes on
Entry of Goods into Calcutta Metropolitan Area Act, 1972 in
S1. No. 4, item (u) for the words ’nuts excluding betel
nuts’ the words ’nuts including groundnuts, cashewnuts and
walnuts but excluding betels’ shall be deemed always to have
been substituted. In other words, this amendment has been
given retrospective effect and groundnut being specifically
mentioned in SI. No. 4(u) of the Schedule to the said Act,
there is no scope for any controversy that ’groundnuts’
imported into Calcutta Metropolitan , Area are liable to
entry tax under the provisions of the said Act.
In this view of the matter this judgment will also
govern Civil Appeal No. 4301 of 1984 wherein identical
questions have been raised. This appeal is also allowed
without any order as to costs. The writ petition giving rise
to the appeal will stand dismissed with no order as to
costs.
S.R. Appeals al-
lowed.
629
Book Name: ENCYCLOPAEDIA BRITANNICA
Volume 16 Napoleon I to Ozonolysis
(Page 797 Nusaybin-NUI) Edition 1768
NUT, generally any seed or fruit consisting of a kernel,
usually oily, surrounded by a hard or brittle shell. Most
edible nuts, e.g., walnut, brazil nut, peanut, etc., are
well known as dessert nuts. Not all nuts, however, are
edible; some are used as sources of oil or fat and may be
regarded as oil seeds (see Oil Plants); others are used for
ornaments. The botanical definition of a nut, based on
morphological features, is more restrictive: a hard, dry,
one-called one seeded fruit that does not split open at
maturity. Among the nuts that fit both the botanical and
popular conception are the acorn, chestnut and filbert;
other so-called nuts may be botanically seeds (Brazil nuts),
legumes (peanuts) or drupes (almond, coconut, pecan and
walnut), In this article the term nut will be used in its
broadest sense unless otherwise indicated.
630