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TMI Blog1991 (5) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... n, secured by local purchase, and occasionally by import from outside West Bengal. Turmeric and pepper are notified commodities under the 1954 Act. In RN-207(T) of 1989 [C.R. 11820(W) of 1976], the applicant challenges the assessment order for the year 1376 B.S. and its case is that the entire quantity of the said notified commodities had been locally purchased during the year 1376 B.S. on payment of sales tax to the selling dealer. Up to the year 1373 B.S. (Bengali year), the first respondent, namely, Commercial Tax Officer, Jorasanko Charge, did not assess the applicant to tax on similar transactions. The accounting year of the applicant is according to Bengali calendar. The assessment for the year 1376 B.S. came up for hearing on March 5, 1976. Despite the plea of the applicant to the effect that no part of the turnover would be liable to tax since the purchases were made within West Bengal upon payment of tax, only a part of the turnover representing sales of the commodities in whole form was not assessed to tax, but the balance of Rs. 20 lakhs being sales of the commodities in powder form and a sum of Rs. 45,373.99 being price of goods returned by buyers were assessed to tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than one point "on the same set of goods" only because the original commodity has undergone some change in its form, it will impede free-flow of trade, infringing articles 301 and 304. Section 2(b) of the 1954 Act is allegedly ultra vires articles 286 and 301 to 304, as the State Legislature has no competence to levy tax on inter-State trade or commerce. According to the applicant, the decision in the case of Mahabirprasad Birhiwala [1973] 31 STC 628 (Cal) cannot be applied to this case, as it was per incuriam. It is also contended that if section 2(b) and the said decision of the High Court are capable of two interpretations, that which is favourable to the assessee should be adopted, and a legal provision, if capable of two interpretationsone making it unconstitutional and another making it constitutionalshould be interpreted in the way it will be constitutional. 4.. In RN-608(T) of 1989 [C.R. 10808(W) of 1976], the applicant challenges the assessment order for the year 1377 B.S. In RN-609(T) of 1989 [C.R. 11819(W) of 1976], the assessment order for the year 1378 B.S. is challenged. The grounds of challenge in both these cases are the same as in RN-207(T) of 1989. The three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn the correct proposition of law. 6.. In the affidavits-in-opposition filed in RN-608(T) and 609(T) of 1989, the respondents have further said that turmeric, pepper, etc., in their pulverised form "assume an identity quite separate and distinct from the whole form and are therefore liable to sales tax". They have further stated as follows: "The word 'manufacture' unquestionably refers to an act, among others, whereby a thing in one form is converted into another form. The petitioner undertakes a lot of mechanical activities in order to grind the whole turmeric and pepper into powder and the subsequent packing thereof. The items in their ground form and in their whole form are two different commodities, the whole being changed into powder. They sell in *See Om Prakash Gupta v. Commercial Tax Officer [1976] 38 STC 73 (Cal). the market as different commodities as is understood from the fact that a consumer asking for gota holud will not accept the powdered halud and vice versa." The respondents alternatively contend that even if the act of grinding does not amount to "manufacture", the applicant cannot escape its liability to pay tax, because it is a "dealer", having undertaken th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verruled. The applicant contends: "There cannot be any imposition of tax over and over again on the said notified commodity even if it undergoes some process but does not become different commercial commodity" (paragraph 8). It further contends in paragraph 10: "with each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place". After arguments were over, Mr. Gopal Chandra Chakraborty, learned advocate for the applicant, submitted a "synopsis of argument" in typed sheets. 8.. The constitutional challenges stated in the writ petitions were not pressed. Emphasising the scheme of the West Bengal Sales Tax Act, 1954, namely, maintaining that the scheme is to levy a single point tax, the applicant has projected a case that it locally purchased whole turmeric and whole pepper (that means, purchased within West Bengal) upon payment of sales tax, then converted the same into powder, then packed the powder for sale and fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified under section 25 by Notification No. 885-F.T. dated May 1, 1955, in the following terms: "1. Black and white pepper, known locally as gol marich, that is to say, the berry of the plant 'piper nigrum' whole, broken, ground or powdered, or of any other form or description whatsoever." "2. Turmeric, known locally as haridra or halud, that is to say, the product obtained from the plant 'curcuma longa' whole, broken, ground or powdered, or of any other form or description whatsoever." 10.. Mr. Gopal Chandra Chakraborty, learned advocate for the applicant, contended that the specification of turmeric and pepper in the foregoing manner indicates that each of the commodities in all those forms, i.e., whole, broken, ground or powdered, etc., constitutes one notified and one commercial commodity. We have already seen what is the object of specification under section 25. Relevant provisions of the statute do not indicate that the further object is, as argued on behalf of the applicant, to declare that each of the commodities in all possible forms would constitute only one notified or commercial commodity. We have seen that the only object was to declare that each commodity in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se directly in manufacturing, making, processing or packing in West Bengal of notified commodities for sale. This concession is available upon furnishing a declaration obtained from the purchasing dealer. When section 23A(1) is read with sections 2(b) and 4, it will be clear that tax under section 4 is exigible on sales of notified commodities manufactured, made, processed or packed by using the notified commodities which had been purchased on payment of reduced tax under section 23A(1). Therefore, there is no reason for departing from what was said by this Tribunal in paragraph 11 of the said judgment in the case of L.N. Bhandar [1992] 85 STC 92; [1991] 24 STA 11, which is reproduced below: "Upon a consideration of the aforesaid provisions of the 1954 Act, the scheme of the Act till April 7, 1975, appears to be that there would be sales tax at the first point of sale, where notified commodities are brought into West Bengal from outside the State for the purpose of sale in West Bengal and where notified commodities are sold in West Bengal after manufacturing, making or processing the same. It may be to an extent misleading to say in a sweeping manner that the Act imposes a single ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a receiver appointed by a court in respect of a person defined under this clause as a dealer. Explanation.-Where notified commodities are brought into West Bengal from any place outside it, the person who takes delivery or on whose behalf delivery is taken shall be deemed to have brought them into West Bengal." In the instant cases, turmeric and pepper in powdered form are not claimed to have been imported for sale into West Bengal by the applicants. They claim to have converted them into powder by processing, packed the product and then sold the same in West Bengal. The expressions "manufactured", "made", and "processed", appearing in section 2(b) are not defined in the 1954 Act. In the absence of any statutory definition, the expressions should be construed in the sense and context in which the Legislature used them. According to learned advocate for the applicant, the principles for construction of such statutory terms should be followed here, as laid down in [1953] 4 STC 188 (SC); AIR 1953 SC 274 (Poppatlal Shah v. State of Madras), [1958-59] 14 FJR 41 (SC); AIR 1958 SC 353 (Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate), [1959] 35 ITR 408 (SC); AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construed according to the maxim noscitur a sociis, which means that the meaning of a word is to be judged from its context, i.e., by the company it keeps. In support of the maxim of noscitur a sociis, learned advocate for the applicant referred to the cases of Rohit Pulp and Paper Mills Ltd. v. Collector of Central Excise [1990] 3 SCC 447, and Punjab Land Development and Reclamation Corporation Ltd. v. Presiding Officer, Labour Court [1990] 3 SCC 682. This maxim is certainly a rule of construction, but as cautioned by the Supreme Court in Rohit Pulp case [1990] 3 SCC 447, these maxims and precedents are not to be mechanically applied, they are of assistance only to a certain extent. In any case, we have to construe the impugned words, keeping in view the wellsettled principles emerging from the cited decisions. 13.. Mr. P.K. Chakraborty, learned State Representative, contended that the words "manufactured", "made", and "processed" are somewhat akin to each other, and in this case, processing by way of powdering has resulted in the emergence of a new commercial commodity different from the original one. He relied on this Tribunal's judgment in the case of L.N. Bhandar [1992] 85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow admitted before us that the present applicant processes whole turmeric and whole pepper by converting them into powder for sale. It is now argued on behalf of the applicant that processing should be construed as synonymous to manufacturing within the meaning of section 2(b) and the processing done here is not the same as envisaged in section 2(b) and further that the commodities in powder form remain the same substance, commercially and scientifically. As regards the scientific sense, it is well-settled that in a case of this nature, the scientific or technical meaning should make way for the meaning or understanding in the common or commercial parlance. In the commercial parlance, turmeric and pepper in whole form are not treated as the same as turmeric and pepper in powder form. Turmeric is mostly used in cooking after pasting or powdering. Pepper may some times be used in whole form for cooking, but it is generally used for cooking purpose after grinding it into powder. All buyers or users of these goods are not of uniform thinking. Some want to avoid the trouble of converting the whole articles into paste or powder, as the case may be, and therefore, may opt for the articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the word "processed" at all. It would then be sufficient to use the solitary word "manufactured". Therefore, the Legislature certainly had some object behind employing the word "processed". When we search for this object, we find no object other than that processing does not always mean manufacturing and often means something different from manufacturing. Therefore, we are of the view that processing and manufacturing, as contemplated in section 2(b), are not synonymous terms, and they generally bear different meanings. 17.. In the judgment of this Tribunal in the case of L.N. Bhandar [1992] 85 STC 92; [1991] 24 STA 11, dictionary meanings and a good number of reported decisions had been discussed for ascertaining the meaning of the terms "manufactured" and "processed". Since both the parties to the present applications referred extensively to that judgment of this Tribunal, we do not consider it necessary to deal with it any further, or to discuss those dictionary meanings and reported decisions except to the extent unavoidable. Mr. G.C. Chakraborty, appearing for the applicant, called for reconsideration of the judgment in the case of L.N. Bhandar [1992] 85 STC 92; [1991] 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o double taxation which is not permissible. Learned State Representative opposed this contention. This charge of double taxation is not the same as the challenge that was thrown as contrary to the single point taxation scheme of the 1954 Act. On behalf of the applicant reliance was placed on the case of Sri Krishna Das v. Town Area Committee [1990] 3 SCC 645. In that case it was held that to constitute double taxation in the strict legal sense, the two or more taxes must have been levied on the same property or subject-matter, by the same Government or authority, in the same territory, during the same taxing period and for the same purpose. Thus, one of the ingredients of double taxation is that the two or more taxes must be levied on the same property or the same subject-matter. In the context of the facts of the cases before us the same property or subject-matter means the same commercial commodity. As soon as a commodity gets transformed to a different commercial commodity, it ceases to be the same property or subject-matter. In the instant cases, powdered turmeric and pepper are different commercial commodities. That being so, there is no question of double taxation, and the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the proviso to section 23A. Section 8 is about returns and payment of tax and section 9 is about assessment. Rule 1(2) gives definitions, clauses (g) and (h) of rule 1(2) being definitions of "notified commodity" and "return period". Rule 20A gives the manner of determination of taxable specified purchase price referred to in section 4(6). Rule 21 speaks of furnishing returns in forms III and IIIA. Form X is a declaration form. Having considered all these provisions and forms and the arguments of Mr. G.C. Chakraborty with reference to the same, we have found no reason to take a view different from what this Tribunal had taken in the case of L.N. Bhandar [1992] 85 STC 92; [1991] 24 STA 11. It may be stated once again that in that case this Tribunal did not enter into the questions whether powdering amounted to manufacture and whether a different commercial commodity emerged by way of powdering. Contentions in that case were partly similar to those in these cases, but there was also a lot of difference. Accordingly, we are unable to hold that the decision in L.N. Bhandar's case [1992] 85 STC 92 (WBTT); [1991] 24 STA 11 needs revision. By referring to the case of Distributors (Bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist dispensing prescriptions of doctors was held to be producing goods for sale within section 4(5)(a) of the Bengal Finance (Sales Tax) Act, 1941. He submitted that the latter case was quoted with approval in [1957] 8 STC 325 (MP) (Hiralal Jitmal v. Commissioner of Income-tax), which was approved in the case of Empire Industries Limited [1987] 64 STC 42 (SC). He also referred, inter alia, to Om Prakas Gupta's case [1965] 16 STC 935 (Cal), affirmed in [1981] 47 STC 124 (SC); AIR 1981 SC 1014 (Chowgule & Co. Pvt. Ltd. v. Union of India), and to Pyare Lal Malhotra's case [1976] 37 STC 319 (SC) at pages 323 and 324. The learned State Representative referred to the case of Hajee Abdul Shukoor and Co. [1964] 15 STC 719 (SC) at page 728. He placed reliance on [1987] 64 STC 42 (SC) (Empire Industries Limited v. Union of India) regarding meanings of processing and manufacture. He distinguished the decisions cited on behalf of the applicant. In view of the foregoing discussions, we do not propose to discuss the decisions relied on by the learned State Representative. But since he and also the learned advocate for the applicant placed reliance on [1987] 64 STC 42 (SC) (Empire Industries Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een wrongly estimated. These are questions of fact. We do not pass any opinion thereon. We propose to allow the applicant to prefer appeals on those two grounds only. 24.. To sum up the main points of decision: (i) The case of Lakshmi Narayan Bhandar, reported in [1992] 85 STC 92; [1991] 24 STA 11, was correctly decided. On the basis of arguments of the parties in that case, this Tribunal had held that the activity of marketing of the powdered variety of turmeric and black pepper for sale after converting the whole spices into powder amounted to processing within the meaning of section 2(b) of the West Bengal Sales Tax Act, 1954, thereby making the applicant of that case a "dealer" and making the sales of such powdered products exigible to sales tax, even if tax had earlier been paid on the sales of the whole commodities which had been subjected to powdering. The questions whether the activity amounted also to manufacture and whether a new commercial commodity emerged were not answered in that case. (ii) On the basis of arguments of the parties in the present batch of cases, we are of the view that the activity of converting whole turmeric and whole pepper into the powdered vari ..... X X X X Extracts X X X X X X X X Extracts X X X X
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