JUDGMENT
D.K. Kapur, J.
(1) Under Sales tax law goods are taxed either at 10% or 5% or 2% while 4th category (in schdule II) is totally exempt. Entry 9 of Schedule Ii exempts sugar and molasses. The dispute was whether Misri & Patasa are sugar and therefore exempt. Deptt. claimed that these were not and hence ordered reference to High Court. High Court observed that in Mangoomal Ramkishore 1974. S.T.C. 182, on consideration of Central Excise Act, 1944 and Prevention of Food Adulteration Rules 1955, it was held Bura was a form of Sugar and hence exempt. In Channulal Motilal Vs Comm. S.T , M P., it was held that Misri and Patasa are not sugar as undertood in their popular sense and hence not exempt In State of Gujrat Vs Sakarwala Bros. 1967. S.T C. 24, Supreme Court held that in the Bombay Act, word sugar has not been used in popular sense but has been given same meaning as it has in Excise Act which is any form of sugar with 90% Sucrose and as Misri and Patasa contained more than this Chemical content it was exempt.] Judgment, para, 6 onwards is :-
(2) In the Act we are dealing with, there is no limit on the words ‘sugar and molasses’. The question we have to ascertain is whether the words ‘sugar’ and molasses, have been used from the point of view of common parlance or from the point of view of the essentlal ingredient of the article in question.
(3) In the Prevention of Food Adulteration Rules, Appendix ‘B’ sets out the definitions and standards of quality. Item A. 87 deals with Sweetening Agents. There area number of sweetening agents mentioned. A. 0701 defines cane sugar and also Misri which is crystallised sugar with sucrose content not less then 98 per cent. Similarly cane sugar is defined as crystallised sugar obtained from sugar-cane having not less than 96.5 percent of sucrose It would thus appear that Misri is a super form of cane-sugar because it has a higher sucrose content. Then refined sugar is defined. It in obtained from the juice of sugar-cane of sugar-beet. In this case, the sucross content is not less than 99.8 per cent. Then Bura is defined as containing not less than 96.5 per cent of total sugar. In this definition khandsari is mentioned as having minimum sugar content of not less than 90 per cent. Gur or jaggery is defined as having total sugar content not less than 60 per cent. Cube sugar is defined as sugar in the form of cubes or cuboid blocks with not less than 99.8 per cent sucrose content. Icing sugar is defined as sugar with or without odible starch. The total of starch and sucrose not less than 98.0 per cent.
(4) It therefore, appears from the definitions of various types of sugars above, that the market knows of a number of different kinds of sugar. The question for our consideration is whether the exemption specified in Entry No. 9 to the Second Schedule is confined only to one of these types of sugar i.e., crystallised and refined sugar or toother sugars also.
(5) The point of view that has prevailed with the M.P. High Court and in the other judgments referred to therein, is that if a person goes to the market to buy sugar, he will not be satisfied with obtaining misri or patasa or any such like product. But the real question which has to be posed is whether Misri and Patasa are sugar or not. If there is a product made entirely of sugar which has 98.5 per cent purity as per the definition, it may be distinguishable from ordinary sugar as used in the house-hold, but nevertheless, it cannot be described as anything but sugar.
(6) These are two points of view on the question as to how the exemption is to be interpreted, Either it is to be understood from the common parlance point of view which has prevailed in several reported cases or it has to be from the point of view of determining the nature of the thing with which we are concerned. If the common parlance view point is used, it is at once obvious that ‘sugar’ is a word of the English language whereas Misri and Batasa are words of either Hindi or someother Indian languages There is no English word corresponding to Misri or Batasa, though they may be described as a kind of sugar candy of some sort. Either of the points of view just mentioned can be applied to the circumstances of its cases. But we are really concerned whether Legislature intended to use the words ‘sugar and molasses’ in the special way in which ‘sugar’ only means chini and no other form of sugar.
(7) To our mind, the problem should be resolved from the points of view of the producers and consumers Sugar can be manufactured in various ways If it is done in the factory, it will lead to the production of refind sugar. If it is done in a slightly less sophisticated manner, canesugar will result. If it is done in a little more cruder form, Bura sugar will be produced. And finally if the product is even less sophisticated, khandsari will be produced. The two words in common use for sugar in the Indian language are chini or khandsari The translation of khandsari and Chini is ‘sugar’ in English. Bura, if it had to be translated into English would also be translated as ‘sugar’ as there is no corresponding word to describe bura sugar. Therefore, it appears that the Legislature could not have intended to the use of the word sugar as meaning only refined canesugar. It meant to use the word as commercial sugar as normally understood in any form.
(8) If we accept this interpretation, then the question will still remain whether misri and Batasa are sugar within the meaning of the words used in Entry No. 9. As already mentioned, misri is actually mentioned in Food Adulteration Rules to mean the crystalised juice of cane-sugar. It has to have 98.5 per cent sucrose content. It is, thereforce, a purified and crystallised form of sugar.
(9) The test for determining whether a thing is sugar or not can more conveniently be made by asking the question whether article in question can be used as a substitute for the factory product. If you have to sweeten a cup of tea, it seems quite plain that you can do it just as easily with misri and batasa as with ordinary powdered sugar purchased from the shopkeeper. Merely because these articles misri and batasa are in a different form do not mean that they cease to be sugar It is quite clear from what has been explained to us that misri and batasa are prepared from ordinary sugar, they do not contain any additional article. Therefore, it is merely sugar made into another shape. In the case of misri the sugar is made into a lump and no longer remains powdered. In the case of such lumps, it appears that the same can be preserved for long periods. In the case of batasa, the sugar is converted into a hollow marble shaped mass. Sugar in this form is generally used in the religious offerings. It appears that sugar used in this form cannot be anything but sugar because there is no conversion except in the shape. It would, therefore, appear that misri and batasa being pure sugar with no additional mixtures or anything else added must also be described as sugar, although in common parlance they may be distinguistable from powdered sugar. They have to be so distinguishable because they are deliberately converted into a different shape, but the conversion does not convert the sugar into some other product Sugar merely takes a different form from the normal powdered in which it is sold. To our mind, sugar remains sugar if sold in cubes. Nobody can deny that cube sugar or brown sugar or any other type of sugar remains sugar. Hence, it is only sugar converted into something else by mixing another ingredient which will cease to be sugar.
(10) Learned counsel for the commissioner of Sales Tax referred to the decision in The Commissioner of Sales Tax, V. M/S Puran Chand and Sons. S.T R. Nos 6 and 7 of 1973 decided on 27th August, 1979. In that case, the item under consideration was ‘icing sugar’ which consisted of 5% of starch and 95% of sugar. The court observed ‘The item which can be considered to be exempt is sugar simpliciter and not sugar with any additives, like icing sugar, which has an additive of starch.”
(11) We agree with this view. If the item we are now considering had any additive in addition to sugar, we would have also held that they are not sugar. But, there are no additives. So the articles continued to be sugar. Two other judgments need now be referred to.
(12) In Paro and Co. V. State (1970) 25, S.T.C. 64, the question arose whether sugar candy was exempt as being sugar. In that case, the appellate Tribunal had held that sugar candy and Bura sugar were chargeable to additional duties of excise and were, therefore, not subject to the Andhra Pradesh General Sales Tax Act. There are certain observations in the judgment which are of assistance in the present case. At page 37, it was stated : – Apart from all other considerations, prima facie, it is difficult to comprehend that ‘sugar candy’ can be other than purified sugar itself, for it contains no other ingredient but sugar. If sugar tablets are to be included in the expression ‘sugar’ and we do not see any reason why they should not be included therein. There is no reason why ‘sugar candy’ should be excluded there from. It is, however, argued that if it was intended by the Legislature that sugar in whatever form it may-be must be included in the term ‘sugar’ used in Schedule v, the Legislature would have expressed so in clearer terms. It would have used the expression ‘sugar in all itsforms’. But as we have already noticed, having regard to the historic background and the expression used in the Central Act, we do not think there can be any clear context evidencing the intendment of the Legislature that the expression ‘sugar’ used was not confined to sugar in its ordinary form but covered sugar in all its forms provided the sugar element is wholly predominant and that sugar candy is undoubtedly such form of sugar.”
(13) We do not see any reason to hold any differently from what is observed above. It appears to us that the exemption provided to sugar and molasses was intended to cover all items which could be so described and not only to sugar as used in the English language. The exemption was in the interest of the public and, there is no reason why the exemption should apply to some types of sugar and not to others.
(14) Then there is a decision of the Allahabad High Court reported as Commissioner of Sales Tax, Lucknow V. Roshan Lal Balam(1972) 30. S.T.C. 166. This was a case in which Batasha were directly involved. The contention of the assessed was that Batasha and Khandsari sugar are one and the same commodity and in fact Batasha was another form of Khandsari sugar. This contention was not accepted by the Sales Tax Officer, who levied tax on the turnover of Batasa at the rate of 2%.In the final revision, the assessed contended that Batasha and Khandsari were not a different commodity but the same. This was accepted and then a reference was brought to the court. It was contended by the assessed that he was neither an importer nor a manufacturer of Khandsari he merely prepared Batashas from sugar and Batashas were nothing more than Khandsari sugar in a different form. The court accepted this contention and held that Batasha were not different from Khandsari sugar.
(15) For our item, it is necessary also to note a notification dated 25th November, 1958, issued under the U.P. Act, which granted exemption to tax regarding certain commodities. The exemption was granted to one containing more than ninety per cent of sucrose, but excluding Khandsari sugar, sugar candy, batasha, cooked food, confectionary and sweetmeats. This form of notification shows that Batasha, Khandsari, Sugar as well as sugar candy etc. had been specifically excluded from the exemption under sugar and, therefore, Khandsari sugar was taxed at the rate of 2% but was not fully exempt. The case really involved the question whether Khandsari which had once been taxed could again be taxed sugar when converted into Batasha which the court said could not be done.
(16) From the various points of view expressed above, it would appear that the questions referred to us have usually been answered by the courts in favor of the view that misri and Batasa should also be treated as sugar. In most cases, this has been done because sugar ‘has itself been defined as sugar in the Central Excise Act.’ There are no words of limitation in the present case. The words used in our Act, i.e. the Bengal Finance (Sales Tax) Act, 1941, are ‘sugar is used in its extended meaning or in its restricted meaning. In the U.P. Act, just referred to. the legislature had give a restricted meaning. So Khandsari sugar, etc. were not covered. In other cases we have referred to, the court has held that world ‘sugar’ should be given a restricted meaning. As has been analysed above, there is no real difference between various types of sugar. They are all produced from the juice of sugar-cane which is the principal source of sugar in this country. In some cases, greater refinement leads to a greater percentage of sucrose. The refined product is normally more costly. The mere fact that it is produced in a factory and Khandsari sugar and Bura sugar may be produced by hand machines, does not mean that the end product is very much different from the other. The natural juice of the sugar cane when dried produces Gur which has comparatively low percentage of sucrose. This may not be sugar as generally understood. All the other products such as refined sugar, cane sugar. Khandsari and Bura sugar are products of the juice after it has been subjected to various types of refinement and exclusion of non-sucrose element. The fact that they had to be differently prepareddoes not mean that they are different items. They are really all different types of sugar. Misri and Batasha we are dealing with are produced from highly refined sugar as is obvious from the definition in the prevention of Food Adulteration Act and the standard which has to be maintained. They are, therefore, sugar, but in a different form. They are not sugar additive mixed with another ingredient, but are sugar formed into different shapes It would appear that they continue to be sugar, and hence, the exemption should apply to these articles also.
(17) Turning now to the questions of law referred to us, the first question is whether the term ‘sugar’ used in entry No. 9 of the Second Schedule of the Act means sugar containing more than 90% of sucrose. We think the answer to this question has to be in the affirmative. All products which can be described ‘sugar’ and which are not produced by mixing sugar with some other ingredient such as starch (as in icing sugar) or with nuts (as in sweet peas or confectionary) are sugar provided the contain more than 90% of sucrose. The 90% sucrose seems to be the standard of all the sugar defined in the prevention of Food Adulteration Act. So, this can be taken as a standard for defining sugar. The same type of definition is to be found in the Central Excise Act. We would accordingly answer the first question in the affirmative.
(18) As regards the second question two hold that Misri and Batasha are sugar within the meaning of entry No. 9 of the Second Schedule and accordingly this question is answered in the affirmative.
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