TMI Blog1969 (2) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1958-59 the opposite party admittedly sold sodium silicate manufactured by it for Rs. 98,028.00. The Sales Tax Officer treated sodium silicate as a chemical and charged sales tax in accordance with the aforesaid notification. His order was affirmed in appeal. But the Judge (Revisions) reversed his decision. He took the view that sodium silicate was not a chemical. But at the instance of the Commissioner, Sales Tax, the applicant, he referred to this court this question: "Whether sodium silicate as used in the manufacture of soap is included in 'chemicals of all kinds' appearing at item 7 of the notification... dated 31st March, 1956?" A Division Bench of this Court has already given an affirmative answer to this question in the Commissioner of Sales Tax v. Banaras Chemicals[1967] 20 S.T.C. 246.. But the present reference was made before this decision. Counsel for the opposite party has strenuously urged before us that sodium silicate is not a chemical and has requested us to reconsider the decision. But I am quite certain in my mind that Banaras Chemicals[1967] 20 S.T.C. 246. is rightly decided. At this stage it is proper to touch upon a minor matter. It seems to me that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s convenience and despatch in the levy and collection of taxes. It is accordingly not wise to demand scientific simplicity (or definiteness) in a sales tax enactment. Two, scientific definitions are now becoming more abstract and more divorced from common understanding. Hence the word "chemical" should not be interpreted according to the true scientific definition. "The word ,chemical', however, as used in a constitutional exemption from taxation of capital and machinery employed in the manufacture of chemicals, is to be understood not from a scientific point of view, but in its generally accepted meaning..........."Words and Phrases (Permanent Edition), Vol. 6, page 740. In Commissioner of Sales Tax, Madhya Pradesh v. M/s. Jaswant Singh Charan Singh[1967] 19 S.T.C. 469., the Supreme Court observed: "But it is now well-settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the 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." (Emphasis* mine). In His Majesty the King v. Planters Nut and Chocolate Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic and Inorganic Chemicals" in the Catalogue issued by Vora Brothers1968 Edn., page 32. It is manifest from these catalogues that sodium silicate is regarded as a chemical by dealers in chemicals in the U.S.A., Germany, England and India. Their opinion is in accord with the dictionary meaning of the word "chemical". According to Shorter Oxford Dictionary "chemical" means anything obtained or used in chemistry. The word has been judicially construed in the U.S.A. There it means a substance used for producing a chemical effect or produced by a chemical processWords and Phrases (Permanent Edition), Vol. 6, page 740. judged by these meanings, sodium silicate is a chemical for it is produced by fusing together sodium carbonate and silicate. The passage which I have extracted from the decision of the judge (Revisions) shows two errors in his reasoning. Firstly, the use of a substance in a chemical process or chemical industry is not the sole test of it being a chemical. I do not know if lithnem bicarbonate is used in any chemical process or chemical industry but it is undisputedly a chemical. Secondly, he is also wrong in thinking that sodium silicate is not used as a detergent in so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sales by successive dealers attracts the tax. Section 3-A was then enacted. It empowers the State Government to specify that the tax will be levied only at such single point in the series of sales by successive dealers as the State Government may specify. It confers the further power upon the State Government to declare the rate of tax in respect of such turnover. Under section 3-A the State Government made Notification No. ST-905/X dated 31st March, 1956, declaring the single point at which the turnover of certain goods would be liable to sales tax and further declaring that the rate of tax would be one anna per rupee. The goods were specified in a list made part of the notification. An examination of the list shows that some entries refer to specific commodities, such as "cigars, cigarettes and pipe tobacco", while other entries mention a general head or class of goods capable of including a number of commodities falling within it, as for example "electrical goods" and "jute goods". Not infrequently, the question arises whether a commodity sold by a dealer can be said to be covered within an entry in the notification. The principles on which the question must be resolved are, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied to any particular science or art, and that, therefore, the words used are to be construed as they are understood in common language. To the words 'fruit' and 'vegetables', therefore, there must be given the meaning which they would have when used in the popular sense-that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. Now the statute affects nearly everyone, the producer or manufacturer, the importer, wholesaler and retailer, and finally, the consumer who, in the last analysis, pays the tax. Parliament would not suppose in an Act of this character that manufacturers, producers, importers, consumers and others who would be affected by the Act, would be botanists. The object of the Excise Tax Act is to raise revenue, and for this purpose, to class substances according to the general usage and known denominations of trade. In my view, therefore, it is not the botanist's conception as to what constitutes a 'fruit' or 'vegetable' which must govern the interpretation to be placed on the words, but rather what would ordinarily in matters of commerce in Canada be included therein. Botanically, oranges and lemons are berri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wetting, the silicate strengthens the fibre of the article. Mercerising of cotton is found to be improved by substituting sodium silicate for sodium hydroxide. Many articles of clothing are treated with silicates to reduce fire hazard. Its adhesive and wetting properties allow the use of sodium silicate as a binding material for numerous materials. It is used as a mordant and fixing agent in the dyeing and printing industry, and as a constituent of lead-free enamels for glazing pens. Small water systems can be protected from corrosion by sodium silicate. It is now finding application in the welding and degreasing industries. Plastics from sodium silicate and phenol, suitable for coating paper and cloth, have been made. As an anti-pyrogenic in coal mines, sodium silicate is used in conjunction with calcium chloride and sodium bicarbonate in decreasing the oxygen absorbed by coal dust. A familiar domestic application of sodium silicate is its use as an egg preservative. Sodium silicate may be used in medicine as a therapeutic against tuberculosis. The use of sodium silicate in the soap industry is well established. During the Second World War its use for this purpose was greatly incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical when used in the manufacture of soap. The answer to this question would depend upon as to whether sodium silicate when used in the manufacture of soap undergoes or brings about a chemical process. This is purely a technical question. A chemical process must necessarily involve a chemical change or a chemical reaction represented by a chemical equation resulting in the production of a chemical compound. All these are technical terms. In the Concised Dictionary of Sciences by F. Gaynor some of these technical words have been defined as under: Chemical change: "A rearrangement of atoms or molecules into chemically different structures, the substances undergoing such a change as to lose their original identity." Chemical reaction: "Any chemical change or transformation of molecules of one kind into molecules of another kind brought about by the rearrangement of atoms when two or more elements or compounds are brought into contact under given conditions." Chemical equation: "A symbolic representation of a chemical reaction showing the relation between the substances and their products, e.g. Zn+2HCL=Zinc Chloride+Hydrogen." Chemical exchange reaction: "A process in which an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it seeks to levy tax on the total sales during a year of a dealer which, according to the definition given in the Act, means a person who carries on the business of buying and selling goods Any entry in a notification issued under the U.P. Sales Tax Act, therefore, has to be interpreted in a sense in which it would be understood in the commercial world. I am, therefore, of opinion that the expression "chemicals of all kinds" has to be given not any technical or scientific meaning but a meaning which this term has in the commercial world. The term "chemical" according to the books of chemistry has a very wide connotation inasmuch as anything that pertains to chemistry is regarded as a chemical. But that obviously is not the sense in which this term has been used in the notification in question because otherwise articles like gold, silver, iron and even plain water would be chemicals which admittedly are not regarded as chemicals in the popular sense. The assessee M/s. Prayag Chemical Works, as its name suggests, is a dealer in chemicals. It deals in imported sodium silicate and also manufactures in its own factory sodium silicate which is popularly known as "soda silicate". Sodi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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