TMI Blog1955 (2) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... duction in respect of refined oil but refused it with regard to the hydrogenated oil and freight charges. The Tribunal held that the hydrogenated oil other- wise called Vanaspathi was not the same thing as the oil obtained from crushing the groundnut and therefore fell outside the scope of rule 18(2). As regards the freight charge it was decided that the benefit under rule 5(1)(g) was not available to the petitioner as it was not shown as something different from the price of the goods sold. The view of the Tribunal on both the matters is canvassed before us in this Revision Case. We will first deal with the claim for deduction under rule 5(1)(g) of the Turnover and Assessment Rules, as it can be disposed of easily. The contention of Mr. Rajah Ayyar in this behalf is that deduction is allowable in the case of freight charges as they are shown as separate items in the bills. In order to appreciate this argument, it is necessary to refer to the relevant rule: "15. (i) The tax or taxes under section 3 or 5 or the notification or notifications under section 6(1) shall be levied on the net turnover of a dealer. In determining the net turnover the amounts specified in clauses (a) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has an interest whether as owner, usufructuary mortgagee, tenant or otherwise shall be excluded from his turnover." We are not concerned in this enquiry with the change in- troduced into this definition by the recent amendment by the Andhra Legislature. It is seen that whatever money is realised by way of consideration for the sale of goods or paid for the purchase of goods forms part of the turnover. The essential element of turnover is that the sums collected should be towards the price stipulated or agreed to be paid by the buyer or sold as the case may be. If any discount is given by a trader by way of trade discount, that could be excluded from the turnover under clause (a). Otherwise, the aggregate amount collected by the dealer will be the basis of the assessment. From what precedes, it follows that the taxing authorities rightly disallowed the claim under this head and the petition to that extent is dismissed. But the more difficult and substantial question relates to the con- struction of rule 18 (2) of the Turnover and Assessment Rules, This rule recites: "18. (i) Any dealer who manufactures groundnut oil and cake from groundnut and/or kernel purchased by him may, on app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as gathered from its language is the one sug- gested for the petitioner. We have, therefore, to consider whether the hydrogenated groundnut oil is groundnut oil for the purpose of sub- rule (2). To understand the relative view-points, it is necessary to ascertain the meaning and the process of hydrogenation. The meaning of the word "hydrogenate", as given in Chamber's 20th Century Dic- tionary, is "to cause to combine with hydrogen, as in the hardening of oils by converting an olein into a stearin by addition of hydrogen in the presence of a catalyst such as nickel or palladium." In Schmidt's "Organic Chemistry" it is stated: "Thus when oleic acid is treated with hydrogen at ordinary temp- erature in the presence of colloidal palladium, it yields stearic acid." In paragraph 6 of the affidavit filed by the petitioner's expert it is described thus: "By a process of passing hydrogen into the heated oil in the pre- sence of catalyst, the oil is hardened to a melting point of 37 degrees C." In the chapter dealing with hydrogenation of fats in "Industrial and Manufacturing Chemistry", Part I, Organic, at page 110-a, it is stated: "Oleic acid is an unsaturated acid only differing from st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... data such as digestive coefficient, calorific value etc., of the vegetable product, which is practically the same as that of the oil. (Digestive coefficient is the percentage of the fat which is absorbed by the system during digestion)." In support of this contention, Mr. Rajah Ayyar called in aid a ruling of the Madhya Pradesh Board of Revenue in Tomco Sales Depart- ment, Kingsway, Nagpur v. The State(1) and another of the Assam High Court in Kapildeoram Baijnath Prosad v. J. K. Das(2). Neither of these decisions is of any assistance to the petitioner. The first one is a case of cocogem. Exemption was claimed from taxation for cocogem on the ground that it was a vegetable oil within the meaning of the second schedule to the Central Provinces and Berar Sales Tax Act, 1947, which exempted inter alia from sales tax vegetable oils except hydrogenated oil. The contention of the assessee that cocogem was not a hydrogenated oil and therefore qualified for exemption found favour with the Board of Revenue. The position is different when the hydrogenated oil is sought to be brought within the purview of the rule granting deduction. In Kapildeoram Baijnath Prosad v. J. K. Das(2) the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assages in Stanley v. Western Insurance Co.(1) in which the word "gas" in the clause "for such loss or damage as shall arise from explosion by gas" in an insurance policy fell to be considered. In that connection, Kelley, C.B., remarked thus: "The words of the policy are to be construed not according to their strictly philosophical or scientific meaning, but in their ordinary and popular sense. Now, in the ordinary language, not only of men of busi- ness, and the owners of property (the subject of insurance), but even of scientific men themselves the explosion in the present case would not be said to have been caused by gas. It was not, therefore, within the saving to the exception, which, indeed, was obviously intended by the parties only to refer to gas in the more limited sense of ordinary illuminating gas." (1) (1868) L.R. 3 Ex. Ch. 71. To a similar effect are the remarks of Martin, B: "We should not be justified in adding words to give it the most artificial meaning which Mr. Quain contended for. Next, what is the meaning of 'gas'? I apprehend it means gas as ordinarily understood by mankind, and not as the word may be used in works of art." On the basis of these passages, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles, such as flour and meal, as distinguished from the natural products of earth untreated except by gathering, the language would have been altogether different to that which is to be found in this statute. Therefore, I think it is impossible to construe these words as including such products as those which were sold in the present case." On the basis of these observations, it is contended that the Legis- lature was aware of the manufacture of Vanaspathi and if it were the intention to include that commodity it would have defined the oil in a comprehensive way so as to bring within its scope Vanaspathi also. According to him, this omission is significant. We do not think that the failure to mention hydrogenated oil is decisive of the matter. It could equally be argued that if the intendment of the section was to exclude this commodity, the Legislature would have stated so in express terms. So we cannot speculate on the presumed intentions of the Legis- lature in this respect. We have to give effect to the intention of the Legislature as expressed in the language of the enactment. It is not necessary for us to pursue this matter any further. We have already expressed the opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions were issued under clause 5(1) of the Vegetable Oil Products Control Order which was promulgated in exercise of the powers conferred by sub-section (i) of section 3 of the Essential Supplies (Temporary Powers) Act, XXIV of 1946, and in supersession of the Vegetable Oil Products Control Order, 1946. It is useful to turn to the definition of "vegetable oil product" in this order. Section 2(e) says, "vegetable oil product means any vegetable oil subjected to a process of hydrogenation in any form or any preparation thereof for cooking purposes containing not less than 50% hydrogenated vegetable oil." This definition makes it clear that when once a vegetable oil under- goes a process of hydrogenation it is transformed into a product of that oil. It was contended by Mr. Rajah Ayyar that on the language of this sub-section it is only hydrogenated oil containing not less than 50% of hydrogenated vegetable oil that could be called a vegetable oil product. We find no basis for this construction. This interpretation would deprive the definition of a good portion of its content. It contemplates two categories of the product: (1) vegetable oil subjected to a process of hydrogenation in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion between the two commodities has not been brought out in that order. Mr. Rajah Ayyar next invited our attention to the schedule annexed to rule 81(D) in which only vegetable oils are mentioned and argued that if really hydrogenated oil was not a kind of vegetable oil, specific mention of it would have been made, for hydrogenated oils are as essential as ordinary vegetable oil for the life of the community. This argument can be disposed of by remarking that the list is not exhaustive and is only illustrative. As is seen from the definition of "essential article" in rule 81-D(aa), essential article means "an article which the Provincial Government or the District Magistrate, being of opinion that the maintenance of the supply thereof is essential to the life of the community, declares by order in writing to be an essential article." Under this, it is left to the Provincial Government or the District Magistrate to declare any article to be an essential article within the purview of the sub-rule. We, therefore, feel no assistance can be derived by the petitioner from any of the notifications referred to above. On the other hand, they clearly indicate that hydrogenated oil is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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