TMI Blog1989 (11) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has effected purchases of rice bran extraction, GN extraction, wheat bran, mollasses, maize, chemicals, fish, etc. Out of the above purchases, purchases of dry fish are to some extent from unregistered dealers. As the fish is exempted from tax under section 8, it does not attract tax under section 6." After the assessment was completed notice under section 12-A was issued by the Assistant Commissioner of Commercial Taxes (Assessments), Hubli, as per annexure-B on 18th February, 1989, proposing to levy purchase tax under section 6 on the turnover of dry fish on the value of Rs. 2,32,831.52. The reason for issuing this notice as can be seen from the notice itself is, that the Commissioner of Commercial Taxes, Bangalore, has clarified that such turnover is to be subjected to tax when those goods are consumed by a manufacturer in cattle feed and poultry feed. There are two circulars issued by the Commissioner. The first circular is dated 23rd April, 1987, which reads thus: "14. No. CLR. CR. 1502/86-87 Dry fish for use as poultry feed in 23rd April, 1987 gunny bags would be taxable under section 5(1) at 7 per cent." The next circular is dated 18th May, 1987, which reads: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy purchase tax on the dry fish since it does not attract tax, fish being exempted from tax under section 8. Sri Shimoga Subbanna, the learned Government Pleader, has argued justifying the circulars issued by the Government. He submitted that the Commissioner has power to issue clarification by virtue of section 3-A of the Act as substituted by Act 27 of 1985. It is his argument that the clarification is issued by the Commissioner in the case of dry fish since he was of the opinion that such clarification or instructions was felt necessary for the purpose of administration of the Act and to levy tax in all cases covered by the two circulars. I have considered the contentions of the learned counsel for the petitioners and the argument of the learned Government Pleader. Before dealing with the validity of the circulars, it is necessary to refer to the scheme of the Act. In these cases the tax is sought to be levied on the purchase turnover of dry fish under section 6 on the ground that it has not suffered tax under section 5(1) of the Act. In the other case tax is sought to be levied on the sales turnover of dry fish under section 5(1) of the Act. Section 5 speaks of levy of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure in exempting "fish" from the levy of tax under the Act? The fish, that is referred to in the Fifth Schedule, is not classified as dry fish and fresh fish nor is any exemption carved out in order that only non-edible fish could be subjected to levy and further whether such nonedible fish supplied to manufacturers of poultry feed could be subjected to levy under the Act. Therefore, the Commissioner proceeds to make a classification of two categories of fish which should attract tax under section 5(1): (i) dry fish sold for use as poultry feed; (ii) dry fish which is non-edible and sold for use as poultry feed. What follows from the clarifications issued by the Commissioner is that all fish other than edible fish should be subjected to levy under the Act. The question, that, therefore, arises for consideration is, whether the Commissioner is justified in making such a distinction on the basis of use to which the dry fish is put and whether his opinion that only the edible fish is exempted under the Fifth Schedule flows from the provisions of the Act and its language? The power to exempt tax in respect of goods is vested in the legislature. There is no other provision except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cannot ignore the meaning of the words used in the statute and the acceptance of the popular meaning of the term "fish" and the acceptance of a particular meaning by the trade and give a different meaning for purposes of taxation. One other approach by the courts in such matters is the "user-test", "whether the use for which the articles or the goods are put, should be the criteria for determining the liability to tax." In support of these propositions, Sri Indra Kumar has relied upon the following decisions: (i) Annapurna Carbon Industries Co. v. State of Andhra Pradesh [1976] 37 STC 378 (SC). The Supreme Court was interpreting entry 4 of the First Schedule to the Andhra Pradesh General Sales Tax Act, and the Supreme Court ruled that the entry should be interpreted on the basis of the predominant user for determining the category in which the articles fell under entry 4 referred to above. Though the decision proceeded on the basis of the observations only one sentence occurring in page 381 supports the contention of the petitioner, namely, that the meaning of an entry can only be satisfactorily determined in the light of the language of the entry itself considered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be applied in the hands of a special consumer is not determinative of the nature of the goods. Allowing the appeals of the assessee in part, the Supreme Court held that the subsidiary parts of the eucalyptus tree could not be called timber, meant or fit for building purposes. The matter was, however, remanded to the High Court to find out as to which other entry the goods in question attract. In the light of the enunciation of the law as explained by the Supreme Court in the decisions cited above, what remains to be decided on the facts of the present case is: whether dry fish when sold for nonedible purposes can be subjected to levy under section 5(1) of the Act and, whether the respondent was justified in following and applying the clarification issued by the Commissioner in this regard? As already stated, the expression, "fish" should be understood as inclusive of all types of fish, whether fresh or dry, edible or non-edible. The only exception which is provided in entry 6-A itself is that the said entry excludes prawns, shrimps and lobsters when sold in sealed containers. Therefore, the plain meaning to be attached to that entry is clear and it should be given effect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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