1973 (6) TMI 48 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Classification of bhinda (lady's finger) seeds under the Bombay Sales Tax Act, 1959.
2. Application of the common parlance test versus defined meaning in statutory interpretation.

Issue-wise Detailed Analysis:

1. Classification of bhinda (lady's finger) seeds under the Bombay Sales Tax Act, 1959:

The primary issue in this case was whether bhinda seeds purchased by the opponent-mill should be classified as oil-seeds under entry 6, Part II, of Schedule B to the Bombay Sales Tax Act, 1959, or as vegetable seeds under the residuary entry 22 of Schedule A to the same Act. The Sales Tax Officer initially classified the seeds as oil-seeds, subjecting them to tax under entry 6, Part II, of Schedule B. The opponent-mill argued that bhinda seeds were vegetable seeds covered by entry 22 of Schedule A, which are not liable to tax. The Assistant Commissioner of Sales Tax upheld the Sales Tax Officer's decision, but the Tribunal reversed this decision, concluding that bhinda seeds were not oil-seeds as understood in common parlance.

2. Application of the common parlance test versus defined meaning in statutory interpretation:

The Tribunal's decision was based on the common parlance test, which was contested by the revenue. The revenue argued that the Tribunal should have considered the legislative intent and the defined meaning of oil-seeds as specified in entry 6. The Tribunal, however, relied on the common parlance test, referencing decisions from various High Courts and the Supreme Court's ruling in Commissioner of Sales Tax, Madhya Pradesh, Indore v. M/s. Jaswant Singh Charan Singh, which emphasized the common understanding of terms in fiscal statutes. The Tribunal concluded that bhinda seeds are not commonly understood as oil-seeds.

The High Court examined whether the term "oil-seeds" in entry 6 should be interpreted based on common parlance or a defined meaning. The Court noted that the entry included the phrase "that is to say," which typically restricts the general nature of the preceding term. The Court referred to Stroud's Judicial Dictionary and other relevant case law to interpret this phrase. The Court determined that the legislative intent was not to tax all oil-seeds but only specific types, excluding cotton seeds, groundnut, and coconut in shell and kernel. This exclusion indicated a restrictive interpretation.

The Court concluded that the Tribunal was correct in applying the common parlance test. The term "oil-seeds" should be understood in its popular sense, and there was no evidence to suggest that bhinda seeds were commonly known as oil-seeds. Therefore, bhinda seeds did not fall under entry 6, Part II, of Schedule B, and were not subject to tax as oil-seeds.

Conclusion:

The High Court answered the reference by stating that bhinda seeds purchased by the opponent-mill are not oil-seeds covered by entry 6, Part II, of Schedule B to the Bombay Sales Tax Act, 1959. The Tribunal's application of the common parlance test was upheld, and there was no order as to costs in this reference.

Reference answered accordingly.