TMI Blog1974 (4) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,57,356. These turnovers of sales of bone-meal, both under the State Act and the Central Act, were held to be free from liability of tax on the reasoning that bone-meal being a fertilizer was exempt from sales tax under entry No. 22 of Schedule I read with section 10(1) of the State Act. Thereafter notices were issued to the petitioner for reassessment under both the Acts on the ground that the turnovers relating to sales of bone-meal had escaped assessment. The reassessment under the State Act was made on 30th September, 1966, and under the Central Act on 24th March, 1967. In these reassessment orders it was pointed out by the assessing authority that the High Court in Commissioner of Sales Tax v. Sagar Bone Mills, Sagar: No. 11 had held that bone-meal although a fertilizer was not exempt from sales tax. Following the judgment of the High Court, the assessing authority assessed the turnovers of bone-meal to tax both under the State Act and the Central Act. The petitioner thereafter filed the present writ petition challenging the aforesaid reassessment orders. When the petition came up for hearing before a Division Bench, the view taken by the High Court in Commissioner of Sales T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le III is entry No. 2, which is as under: 2. Bones of animals including powdered bones, horns and hoofs. Section 10 of the Act refers to tax-free goods. It provides that "No tax shall be payable on the sales or purchases of goods, specified in the second column of Schedule I subject to the conditions and exceptions, if any, set out in the corresponding entry in the third column thereof." The relevant entry of Schedule I is entry No. 22, which reads 22. Fertilizer other than oil-cakes. 4.. The first contention raised by the learned counsel for the petitioner is that bone-meal is fertilizer within entry No. 22 of Schedule I and, therefore, sales of bone-meal are completely exempt from tax under section 10 and cannot be included in taxable turnover. While so arguing the learned counsel did not dispute that bone-meal consists only of "powdered bones" which are included in entry No. 9 of Schedule II and entry No. 2 of Schedule III. But it was argued that section 10 of the Act is the leading provision and, therefore, the entry of exemption in Schedule I will prevail over the entries in Schedules II and III. It was also argued that entry No. 22 of Schedule I itself shows that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, section 10 read with entry No. 22 in Schedule I shows that the legislature intended to exempt sales of fertilizer other than oil-cakes. As powdered bones also fall within the description of fertilizer, there is an apparent conflict between entry No. 22 of Schedule I and entries Nos. 9 and 2 in Schedules II and III. This conflict has to be resolved by applying the rule of harmonious construction. 6.. The rule of harmonious construction means that when there is an apparent conflict between two provisions of the same Act, they should be so interpreted that, if possible, effect should be given to both: Venkataramana Devaru v. State of MysoreA.I.R. 1958 S.C. 255 at 268. It is the very essence of this rule that effect must be given to both the provisions; therefore, a construction which reduces one of the provisions to a "useless lumber" or "dead letter" is not harmonious construction: Calcutta Gas Co. (Prop.) Ltd. v. State of W.B.A.I.R. 1962 S.C. 1044 at 1051. and J.K.C.S. W. Mills v. State of U.P.(3) To harmonize is not to destroy: J.K.C.S. W. Mills v. State of U.P. A.I.R. 1961 S.C. 1170 at 1174.and Chief Inspector of Mines v. K.C. ThaparA.I.R. 1961 S.C. 838 at 843. A fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l result and the tax on sales of powdered bones will be violative of article 14 of the Constitution and, therefore, the word "fertilizer" should be given its full effect and the entries of "powdered bones " in Schedules II and III should be ignored as redundant is without any substance. It is well-settled that the power of classification allowed to the legislature in enacting a fiscal measure is very wide: S.B. Dayal v. State of U.P.[1972] 29 S.T.C. 206 (S.C) ; A.I.R. 1972 S.C. 1168.The legislature is allowed to pick and choose districts, objects, persons, methods and rates for taxation. The courts have permitted a very wide latitude for tax purposes and clear and hostile discrimination has to be established before a taxing Act is struck down as contravening article 14: Twyford Tea Co. Ltd. v. Kerala StateA.I.R. 1970 S.C. 1133 at 1137-1139.See further M. Match Works v. Assistant Collector, Central ExciseA.I.R. 1974 S.C. 497 at 504, para 19.No material has been placed before us to show that dealers in powdered bones and dealers in other fertilizers come under the same class and that a tax liability imposed on the former will create a hostile discrimination. We cannot assume in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded by the learned counsel for the petitioner that the entries of "powdered bones" in Schedules II and III should be limited to powdered bones which are not fertilizer. It was submitted that powdered bones can be divided into two categories: (1) powdered bones which are fertilizer and (2) other powdered bones. On this premise it was argued that only the latter category is included in the entries of powdered bones in Schedules II and III as the former category is covered fully by the entry of fertilizer in Schedule I. In this connection we were referred to the definition of fertilizer given in the Fertilizer (Control) Order, 1957, made by the Central Government in exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955. 12.. Fertilizer, as defined in section 2(d) of the Fertilizer (Control) Order, means any substance used or intended to be used as a fertilizer of the soil and specified in column 1 of the schedule and includes a mixture of fertilizer and a special mixture of fertilizers. Schedule I of this Order in entries 11 and 12 specifies bone-meal raw and bone-meal steamed in column 1. Bone-meal raw and bone-meal steamed, therefore, are fertilizer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot developed to any appreciable extent in India. According to the trade there are no factories in India that produce bone glue of proper quality. In India generally glue is manufactured on cottage industry scale from hide fleshings and trimmings and bone sinews." (P. 14). "Bone grists.-These are crushed bones of a smaller size, i.e., less than 3/16 inch but more than 3/32 inch. Bone grist is mostly exported and the principal importing country is Ceylon where it is used as a fertilizer. A very small quantity of grist is put to use in India by engineering firms for case hardening of steel." (P. 14). "Bone-meal.-This is obtained as a powder on crushing of bones and can pass through 3/32 inch mesh. There are some mills particularly those situated in South India that crush all bones into bone-meal by re-crushing the crushed bones and grists. Bone-meal finds use only to the country as export of it is totally banned. It is used as a fertilizer both by itself and also in fertilizer mixtures." (P. 14). The following extract from the Standard Cyclopedia of Modern Agriculture, Vol. II, (P. 185) is also useful: "Bone-meals and bone-dusts.-With modern machinery bones can be ground to an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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