TMI Blog1966 (9) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ---------------------------- Appeal by special leave from the judgment and order dated December 11, 1962, of the Gujarat High Court in Sales Tax Reference No. 10 of 1961. Civil Appeal No. 549 of 1965. This reference came on for hearing before a Division Bench of the Gujarat High Court consisting of K.T. DESAI, C.J., and BHAGWATI, J., and the reference was answered in favour of the assessee on 11th December, 1962. The following judgment of the High Court was delivered by DESAI, C.J.- This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959. The opponents are registered dealers dealing inter alia in "patasa", "harda" and "alchidana". The opponents requested the Deputy Commissioner of Sales Tax (Appeals), Gujarat State, Ahmedabad, to determine under section 52(1)(e) of the Bombay Sales Tax Act, 1959, whether any tax was payable in respect of the sales of "patasa", "sakar ", "bura sugar", "harda" and "alchidana". Along with their application, they sent two copies of bills Nos. 46, 85 and 92 dated respectively 2nd May, 1960, 1st July, 1960, and 9th July, 1960. The Deputy Commissioner of Sales Tax held that the sale of "bura sugar" was exempt from tax as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of hydrogen sulphide is passed through the sugar solution for bleaching purposes after which patasas are prepared by splashing the solution on a piece of wood which converts the sugar into amorphous sugar, the hardas are prepared by pouring the solution into moulds which is then allowed to cool and the alchidanas are pre- pared by rapidly passing the solution of appropriate thickness through a sieve so as to convert it into granulated lumps of sugar. But whatever the process these articles are only forms of refined sugar with the requisite sucrose content...............After undergoing all the process, the articles continue to be sugar as defined by the Excises and Salt Act and the fact that they are distributed on festive occasions will not make them anything else than sugar on that account. It may be noted that it is possible to convert any of these articles into other articles by dissolving them in water and subjecting the solution to an appropriate process. They can also be put to the same use to which sugar-candy or bura sugar can be put." Section 5(1) of the Bombay Sales Tax Act, 1959, provides as under: "Notwithstanding anything in this Act, but subject to the condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riety of sugar. The words "any form" have been used also in connection with item 9 in the same Schedule in connection with tobacco. It is there stated that tobacco means any form of tobacco whether cured or uncured and whether manufactured or not and includes the leaf, stalks and stem of the tobacco plant but does not include any part of tobacco plant while still attached to the earth. The Legislature has used the words "any form" in a sense distinct and different from any variety. The words "any form of sugar" are intended to cover sugar in any form, by whatever name called. The qualifying words are that it must contain more than 90 per cent. sucrose. In considering the use of these words in the Central Excises and Salt Act, 1944, we are dealing with the use of the words in an enactment intended for the levy of excise duty. The Legislature, by using the words "any form of sugar" has intended to cover sugar of any variety in whatever form it may be found and by whatever name it may be called. Mr. Nanavaty the learned Advocate on behalf of the opponents, drew our attention to a decision of the Assam High Court in the case of Kapildeoram Baijnath Prosad v. J.K. Das and Others 1954] 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption. The words which we have to construe in the present case are distinct and different from the words which the High Court of Rajasthan had to consider. It was urged by the learned Advocate-General that the word "sugar" in entry 47 has been used in the same sense in which it is used in common parlance and that in common parlance, "patasa", "harda" and "alchidana" are not commercially known as and cannot be asked for or obtained as sugar. The learned Advocate-General is right when he says that the articles known as "patasa", "harda" and "alchidana" bear a distinct and different name from sugar and are not commercially purchased or sold as sugar. The Legislature, in entry 47, does not use the word sugar simpliciter. It has in terms stated that what is covered is sugar as defined in item No. 8 of the First Schedule to the Central Excises and Salt Act, 1944. When we turn to the definition appearing in the aforesaid item No. 8 that definition is not intended merely to cover sugar as known in common parlance. As stated by us earlier, it is intended to cover all forms of sugar. It is further intended to cover only sugar in any form which contains more than 90 per cent. of sucrose. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The State of Gujarat appealed to the Supreme Court. N.S. Bindra, Senior Advocate (R.H. Dhebar with him), for the appellant. A.K. Sen, Senior Advocate (S.L. Modi and O.C. Mathur of J.B. Dadachanji Co. with him), for the respondents. JUDGMENT The judgment of the Court was delivered by RAMASWAMI, J.- The question of law involved in this appeal is whether the sales of patasa, harda and alchidana (small lumps of sugar) fall within the definition of "sugar" in entry 47 of Schedule A to the Bombay Sales Tax Act, 1959 (No. 51 of 1959) (hereinafter called the "Bombay Sales Tax Act") and are exempt from the payment of sales tax. The respondents applied under section 52 of the Bombay Sales Tax Act to the Deputy Commissioner of Sales Tax to determine whether any tax was payable on the sales of patasa, sakar, bura sugar, harda and alchidana effected by them under their bills No. 46 dated 2nd May, 1960, No. 85 dated 1st July, 1960, and No. 92 dated 9th July, 1960. The Deputy Commissioner of Sales Tax held that the sale of "bura sugar" was exempt from tax as the item was covered by entry 47 of Schedule A to the Bombay Sales Tax Act, whilst the sales of other articles we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified in column 3 of Schedule A, no tax shall be payable on the sales or purchases of any goods specified in that Schedule." Entry 47 in Schedule A states as under: "Sugar as defined in item No. 8 of the First Schedule to the Central Excises and Salt Act, 1944." Sugar as defined in item No. 8 of the First Schedule to the Central Excises and Salt Act, 1944, is thus exempt from payment of tax under the Bombay Sales Tax Act. Item No. 8 of the First Schedule to the Central Excises and Salt Act, 1944, defines sugar as follows:- "Sugar means any form of sugar containing more than 90 per cent. of sucrose." Item No. 31 of Schedule C of the Bombay Sales Tax Act states: "Goods, the sale or purchase of which is subject to sales tax or purchase tax and the rates of tax. S.No. Description of goods Rate of sales tax Rate purchase tax of 31 Sweets and sweetmeats (including shrikhand, basundi and doodhpak) except when sold in sealed containers of weight not exceeding five seers in each containers. Five naye paise in the rupee. Five naye paise in the rupee." The Tribunal said that alchidana or small lumps of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occasions. But this circumstance has no relevance on the question of legal classification for the purpose of the Bombay Sales Tax Act. On the other hand, it appears from the judgment of the Tribunal that it is possible to convert these articles into sugar by dissolving them in water and by subjecting the solution to an appropriate process. It is stated by the Tribunal that these articles can be put to the same use to which sugar-candy can be put. It is, therefore, manifest that patasa, harda and alchidana are only different forms of refined sugar with the requisite sucrose contents. It is argued by Mr. Bindra that the phrase "any form of sugar" referred to any variety of sugar and the phrase cannot be taken to mean sugar in any form. It is not possible to accept this argument as correct. If the Legislature had intended to refer to "any variety of sugar" there is no reason why it should not have used that expression in item No. 47. It is significant that item No. 14 which relates to tea states as follows: "'Tea' includes all varieties of the product known commercially as tea and also includes green tea." Item 16 which relates to soap provides that soap means "all varieties of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not able to decide upon the evidence whether the article was liable to be charged to specific duty as sugar but affirmed the decree of the lower court that the property seized should be restored to the claimant on the payment of 15 per cent. of ad valorem duty and that the libel be dismissed. The Supreme Court treated the question as essentially a question of fact and thought fit not to interfere with the finding of the lower court that the contents of the casks were syrup and were liable to the lower rate of duty. On behalf of the respondents, however, reliance was placed on M/s. Tungabhadra Industries Ltd. v. Commercial Tax Officer, Kurnool [1961] 2 S.C.R. 14; 11 S.T.C. 827., in which the question at issue was whether the appellant was entitled to a deduction in respect of sales of hydrogenated groundnut oil under rules 4 and 5 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. It was decided by this Court that the hydrogenated groundnut oil continued to be "groundnut oil" notwithstanding the processing which was merely for the purpose of rendering the oil more stable. To be groundnut oil two conditions had to be satisfied-it must be from groundnut and it m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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