PETITIONER: COMMISSIONER OF SALES TAX U.P. Vs. RESPONDENT: M/S. S. N. BROTHERS, KANPUR DATE OF JUDGMENT02/11/1972 BENCH: DUA, I.D. BENCH: DUA, I.D. REDDY, P. JAGANMOHAN CITATION: 1973 AIR 78 1973 SCR (2) 852 1973 SCC (3) 496 CITATOR INFO : RF 1977 SC 132 (15) D 1977 SC 597 (41) R 1988 SC2176 (4) R 1988 SC2229 (9) RF 1990 SC1579 (44) RF 1991 SC 494 (3) ACT: U.P. Sales Tax Act (15 of 1948) s. 3 and Notification under s. 3A 'Food colors' if 'dyes and colors' and 'Syrup essences' if 'scents and perfumes' HEADNOTE: Item 10 of the notification under s. 3A of U.P. Sales-tax Act, 1948, referred to 'dyes and colors' and compositions thereof, and item 37 to 'scents and perfumes'. The respondent (dealer) imported from outside U.P., food colors and syrup essences. The appellant held that the food colors fell under item 10 of the notification and syrup essences under item 37 of the notification, and that they should be taxed at six paise per rupee under the Act. The dealer contended that the tax on food colors and syrup essences should be at the rate of two paise per rupee as unclassified goods under s.3 of the Act. The High Court, in reference, agreed with the dealer's contention. Dismissing the appeal to this Court, HELD : The words 'dyes and colors' and the words 'scent and perfumes' have to be construed in their context and in the sense as ordinarily understood and attributed to these words by people usually conversant with and dealing in such goods. Similarly, the words 'food colors' and 'syrup essences', which are descriptive of the class of goods, the sales of which are to be taxed under the Act, have to be construed in the sense in which they are popularly understood by those who deal in them and who purchase and use them. 'Food colors' and 'syrup essences' are edible goods, whereas 'dyes and colors' and 'scents and perfumes', as specified in entries 10 and 37, prima facie do not connote that they are edible goods. The scheme of the list in the notification also suggests that, apart from undoubted edible goods, in cases where the import of the specified goods is wide enough to include both edible and non-edible categories, then the intention has been clearly expressed whether or not to in- clude edible goods. Therefore, entries 10 and 37 are not intended to extend to edible colors like 'food colors' and edible essences like 'Syrup essences'. In any event, the view taken by the High Court is not so grossly erroneous that it should be interfered with in a special leave appeal under Art. 136. [856 F-G; 858 D-E, F-H; 859 A-B] Sarin Chemical Laboratory v. Commissioner of Sales tax [1970] 26 S.T.C. 330, Ramvatar Budhiprasad v. Assistant Sales Tax Officer, Akola, [1961] 12 S.T.C. 286, Commissioner of Sales Tax. M.P. Indore v. Jaswant Singh Charan Singh [1967] 19 S.T.C. 469 and Sales Tax Commissioner U.P. v. Ladha Singh Mal Singh, [1971] 28 S.T.C. 325 referred to. Kishan Chand Chellaram v. Joint Commercial Tax Officer Chintradripet, [1968] 21 S.T.C. 367 approved. JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2088 of
1969.
Appeal by special leave from the judgment and order, dated
April 3, 1969 of the Allahabad High Court in S. Y. R. No.
306 of 1967.
853
S. C. Manchanda and O. P. Rana for the appellants.
A. K. Sen, K. P. Gupta and Champat Rai for the respondents.
The Judgment of the Court was delivered by
DUA, J.-This appeal by the Commissioner of Sales Tax, Uttar
Pradesh is by special leave and is directed against the
judgment of the Allahabad High Court answering the following
question in the negative in favour of the respondent
(hereinafter called the dealer) and against the Commissioner
of Sales Tax, appellant
“Whether the food color and essence are under
the circumstances items to be taxed under
section 3A within the notification No. ST-
905/X dated March 31, 1956 ?”
The dealer carries on the business, inter alia, of selling
food colors and syrup essences. The dealer also carries on
the business of petroleum jelly but we are not concerned
with that item in this appeal nor are we concerned with the
sales of imported scents and perfumes which, according to
the order of the Sales Tax Officer, were separately shown in
the statement filed by the dealer, ,during the assessment
proceedings for the year 1960-61. For the said year the
Sales Tax Officer taxed food colors and syrup essences
imported by the dealer from outside Uttar Pradesh under s.
3A of U.P. Sales Tax Act, 15 of 1948 (hereinafter called the
Act) treating them as imported colors and perfumes. The
figures of the dealer’s trading account were accepted by the
Sales Tax Officer. The dealer, according to whom, food
colors and syrup essences being unclassified goods were
taxable under s. 3 and not under s. 3A of the Act,
unsuccessfully appealed against the order of the Sales Tax
Officer to the Assistant Commissioner (Judicial); II Sales
Tax, Kanpur. Further revision to the Court of the Judge
(Revisions) Sales Tax, Lucknow also failed. It may,
however, be pointed out that for the assessment year 1957-58
the Appellate Authority had, in disagreement with the
assessing officer, held food colors and essences of syrup to
be unclassified items and had granted the relief claimed by
the dealer. Against that decision of the Appellate
Authority the Department preferred a revision to the Court
of the Judge (Revision), Sales Tax. Both these revisions,
by the Department with respect to the assessment year 1957-
58 and by the dealer with respect to the assessment year
1960-61 were heard together and disposed of by the common
order dated November 19, 1965. The dealer’s application for
reference was, however, allowed and the learned Judge
(Revisions). Sales Tax referred for determination of the
Allahabad High Court “he question reproduced in the
beginning of this Judgment. The High Court agreed with the
dealer’s contention and held food colors and syrup essences
not to fall within the entries at items nos. 10 and
854
37 of the Notification under S. 3A of the Act. The
reference was accordingly answered in the negative and
against the Department. The only question which now’ falls
for determination is the one referred to the High, Court and
which has already been reproduced. There is no dispute
about the turnover. The dealer claims that on imported food
colors and syrup essences the rate of tax should be 2 nP.
per rupee as unclassified goods under S. 3, whereas
according to the Commissioner the tax should be 6 nP. per
rupee under s. 3A of the Act. Section 3 provides for
liability to tax under the Act whereas section 3A, which was
inserted by U.P. Act 25 of 1948 and has thereafter been
amended from time to time, deals with single point taxation.
Section 3A reads :
“3-A. Single point taxation : (1)
Notwithstanding anything contained in Section
3, the State Government may, by notification
in the official Gazette, declare that the
turnover in respect of any goods or class of
goods shall not be liable to tax except at
such single point in the series of sales by
successive dealers as the State Government may
specify.
(2) If the State Government makes a
declaration under sub-section (1), it may
further declare that the turnover in respect
of such goods shall be liable to tax at such
rate not exceeding ten naya paise per rupee as
may be specified.
(3) Every notification made under this
section shall be laid before the
Legislative Assembly of the State as soon as
may be after it is made and if a resolution
amending or modifying it is passed by the
Assembly within the session in which it is
laid, it shall, from the date of passing of
the resolution, be amended or modified
accordingly but without prejudice to the
validity of anything previously done or of any
liability incurred or assessment made.”
On March 31, 1955 the Governor of Uttar Pradesh issued a
notification in exercise of the powers conferred by s. 3A of
the Act. That notification so far as relevant for our
purpose reads :
“Notification No. ST-905/X dated 31st March,
1955.
In exercise of the powers conferred by section
3A of the U.P. Sales Tax Act, 1948 as amended
from time to time and in supersession of all
previous Notifications on the subject, the
Governor of Uttar Pradesh is hereby pleased to
declare that the turnover in respect of the
good,, specified in the List below shall not
with effect from April 1, 1956, be liable to
tax “cept-(a)
855
in the case of goods imported from outside
Uttar Pradesh at the, point of sale by the
importer; and
(b) in the case of goods manufactured in
Uttar Pradesh at the point of sale by the
manufacturer; and the Governor is further
pleased to declare that such turnover shall
with effect from the said date be taxed at the
rate of one anna per rupee.
LIST
10. Dyes and colors and compositions
thereof.
37. Scents and perfumes.
The narrow point requiring decision is whether good colors
and syrup essences imported by the dealer from outside U.P.
fall within the entries 10 and 37 respectively. If they do,
then the appeal of the Department has to succeed and if they
do not then the appeal must fail. As noticed earlier the
High Court has in the impugned judgment, in disagreement
with the view taken by the Sales Tax Officer, the Assistant
Commissioner (Judicial) and the Judge (Revisions), Sales
Tax, held that the food colors and essences do not fall in
the entries at items 10 and 37 of the Notification. This is
how the High Court has dealt with the point in
controversy:–
“The notification with which we are concerned
in the instant case is notification no. ST-
905/1 dated March 31, 1956. Item nos. 10 and
37 of that notification read as follows :
’10. Dyes and colors and composition thereof.
37. Scents and perfumes.’
The case of Commissioner of Sales Tax is that
food colors would fall under item no. 10 i.e.,
‘dyes and colors and composition thereof’ and
essence would fall in the entry given in item
no. 37 i.e., ‘scents and perfumes’. Food
colors are edible, articles. The expression
‘dyes and colors and composition thereof’ does
not relate to item of food but only to
coloring and dyeing material i.e., material
for color washing or color painting o
r dyeing
of fabrics. In our opinion, it stands in
contradistinction to bleaching material.
Similarly, the entry at item no 37 relates to
articles which cater to the smelling sense
i.e., those which appeal to nose. Essence is
a flavoring material and its function is to
add flavor to the food i.e., to make it more
palatable. It appeals to the tongue or to the
palate. By scents and per-fumes is meant
articles of perfumery. In our opinion.
therefore, the food colors and essences would
not fall in the entries at items nos. 10 and
37 of the notification
856
aforesaid. In our opinion they could not be
taxed under section 3A but under section 3 of
the Act.”
Shri Manchanda, learned counsel for the appellant, assailed
the reasoning and approach of the High Court. According to
him the words “dyes and colors” in entry no. 10 of the List
in the Notification in question and the words “scents and
perfumes” in entry no. 37 of the said List are unqualified
and there being no limitation discernible on their plain and
general meaning, they must be held to be wide enough to
cover ‘food colors’ and ‘syrup essences’. In seeking
support for this submission reference was made to the Random
House Dictionary of the English Language (prepared in
U.S.A.) for ascertaining the meanings of the words ” color”
(color, as spelt in this dictionary), “dye” and “essence”,
as also to Encyclopedia Britannia Vols. 8 & 17 and Corpus
Juris Secunduin, Vols. 28 and 70 for the same purpose.
Strong reliance was placed on the decision of this Court in
Commissioner of Sales Tax U.P. v. Indian Herbs Research &
Supply Co.(1) in which the word “perfume” was held to
include “dhoop” and “dhoop batti”. The word “perfume”, it
may be recalled occurs in the entry no. 37 of the List in
the Notification in question.
In our opinion the Random House Dictionary cannot serve as a
safe guide in construing the words used in the List in the
Notification in question for the purpose of deciding whether
or not the words used in entries nos. 10 and 37 cover food
colors and syrup essences : indeed this Dictionary is apt to
be a somewhat delusive guide in understanding the meanings
of the words and expressions with which we are concerned in
the context in which they are used. This Dictionary gives
all the different shades of meanings attributable to the
words referred but that is hardly helpful in solving the
problem raised in the present controversy. The words- “dyes
and colors” used in entry no. 10 and the words “scents and
perfumes” used in entry no. 37 have to be construed in their
own context and in the sense, as ordinarily understood and
attributed to these words by people usually conversant with
and dealing in such goods. Similarly the words “food
colors” and “syrup essences” which are descriptive of the
class of goods the sales of which are to be taxed under the
Act have to be construed in the sense, in which they are
popularly understood by those who deal in them and who
purchase and use them. The respondent’s learned counsel has
in support of this view referred us to some decided cases.
In Kishan Chand Chellaram v. Joint Commercial Tax Officer,
Chintradripet(2) a Bench of the Madras High Court held that
Terylene, Terene, Decorn, Nylon, Nylex etc., came within the
expression “artificial silk” occurring at item no. 4 in the
Third Schedule to the Madras General Sales Tax Act, 1959.
In the course of the judgment in
(1) (1970) 25 S.T.C. 151.
(2) (1968) 21 S.T.C. 367.
857
that case it was observed that the import and content of
those words have not been defined in the Sales Tax Acts and
the Courts are bound to have recourse to the meaning
attributable to such words by persons who are dealing in and
utilising such goods. The extreme, peculiar and scientific
meaning of the goods which might sometimes deviate from the
popular meaning, cannot prevail. The meaning which the
trade, Government officials and statutes attribute to the
words “artificial silk” was considered by the High Court to
be the ordinary and popular meaning of that expression. In
Sarin Chemical Laboratory v. Commissioner of Sales Tax(1)
this Court held tooth powder to be a “toilet requisite” and
liable to sales tax at a single point under s. 3A of the Act
read with entry no. 6 of the: notification, with which we,
are also concerned in the present case, it being observed
that the names of the, articles, sales and. purchases of
which are liable to be taxed, given in a statute, unless
defined in the statute, must be construed not in a technical
sense but as understood in common par lance. In this
decision reference was made to an earlier decision of this
Court by five Judges in Ramvatar Budhiprasad v. Assistant
Sales Tax Officer Okola (2 in which “betel leaves” were not
considered as “vegetable”. In Commissioner of Sales Tax,
M.P. Indore v. Jaswant Singh Charan Singh(3) the word “coal”
was held by this Court to include “charcoal”, it being
observed that, while interpreting items in statutes like the
Sales Tax Acts, resort should be had not to the scientific
Or 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. In the
course of the judgment, after referring to certain
decisions, including the decisions from Australian, Canadian
and English Courts, it was observed :
“The result emerging from these decisions is
that while construing the word “coal” in entry
1 of Part III of Schedule 11, the test that
would be applied is what would be the meaning
which persons dealing with coal and consumers
purchasing it as fuel would give to that word.
A sales tax statute, being one levying a fax
on goods must, in the absence of a technical
term or a term of science or art, be presumed
to have used an ordinary term as coal
according to the meaning ascribed to it in
common parlance. Viewed from that angle 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’. It is only
when the question of the kind or variety of
coal would arise that a distinction would be
made between coal and charcoal; other-
(1) (1970)26S.T.C.339. (2) (1961) 12
S.T.C. 286.
(3) (1967) 19 S.T.C. 469.
858
wise both of them would in ordinary parlance
as also in their commercial sense be spoken as
coal.”
It may be pointed out that the entry in the case cited read
“coal including coke in all its forms”. In Sales Tax
Commissioner/ U.P. v. Ladha Singh Mal Singh(1) cloth
manufactured by means of power-looms was held by this Court
not to fall within the words ” cloth manufactured by mills”
in the Notification dated June 8, 1948, issued under s. 3A
of the Act and the sale of such cloth was held not liable to
be taxed at the higher rate of 6 ps. in a rupee. According
to this decision power-loom cloth in popular language is
never associated with mill cloth. In view of these and some
other decisions the learned counsel for the appellant, it
may be said in fairness, did not dispute that the words with
which we are concerned must be construed in the sense which
is imputed to them by the persons who deal in and who
consume such articles.
“Food colors” and “syrup essence” being themselves known
articles of common use, the question arises whether the
words and expressions used in entries 10 and 37 of the List
are intended to take within their fold goods popularly known
in common parlance by the names of “food colors” and “syrup
essences”.
It cannot be gain said that “food colors” and “syrup
essences” are edible goods whereas “dyes and colors and
compositions thereof” and “scents and perfumes” as specified
in entries nos. 10 and 3 7 of the List do not seem prima
facie to connote that they are edible goods. This is the
reasoning of the High Court and it appears to us to be both
logical and rational. Indeed, except for items like ‘salt’
in entry no. 34, the “sugar manufactured by mills’ (entry
no. 49) and “Banaspati, including refined coconut oil”
(entry no. 43) which is capable of being used as medium for
cooking is prima facie edible there does not seem to be any
other edible article included in the List. Item no. 25
speaks of “Oils of all kinds other than edible oils
manufactured on Ghanis by human or animal power”. This
scheme suggests that, apart from the undoubted edible goods,
in cases where the import of the specified goods is wide
enough to include both edible and non-edible category then
the intention has been clearly expressed whether or not to
include edible goods. How in the case of entries nos. 10
and 37 we are inclined to think in agreement with the High
Court that these entries are not intended to extend to
edible colors like food colors and to edible essences like
syrup essences. It would indeed be straining the meanings
of the words and expressions in those entries as understood
in popular commercial sense to include edible colors and
essence-,. If the intention of the State Government was to
include food colors in entry no. 10 and syrup essences in
entry no. 37 then in our view these goods could easily have
been
(1) (1971) 28 S.T.C. 325.
859
specified by their own popularly known description. In any
event assuming that another view as to the meaning of these
entries is possible we have not been persuaded to hold that
the view taken ‘by the High Court is so grossly erroneous
that we should interfere on special leave appeal under Art.
136 of the Constitution.
Shri Manchanda made a passing reference to the Prevention of
Food Adulteration Rules, 1955 framed under ss. 4 and 23 of
the Prevention of Food Adulteration Act, 37 of 1954 and
pointed out that r. 23 postulates addition of coloring
matter to an article of food when permitted. This,
according to the argument, suggests that the word ‘color’ as
used in entry no. 10 of the List of the Notification in
question has been used in a broad enough sense so as to take
within its fold edible color or food color. We are not
impressed by this argument. Rule 23 of the Prevention of
Food Adulteration Rules indeed seems to go against the
submission.
The appellant’s learned counsel had at one stage suggested
that the goods intended to be taxed under s. 3A of the Act
are all luxury goods and therefore food colors and syrup
essences which are normally used by comparatively richer
class of society should be presumed to have been intended to
be included in items nos. 10 and 37 of the List. On closer
scrutiny of the List, however, this point was rightly not
developed.
For the reasons foregoing this appeal fails and is dismissed
with costs.
V.P.S. Appeal dismissed.
860