TMI Blog1994 (3) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... %" in its manufactured or unmanufactured state, whether ginned or unginned, baled, pressed or otherwise but not including cotton waste. Notification dated March 23, 1989 was superseded by another notification dated June 27, 1990, in which the relevant corresponding entry No. 16 reads as under: "16. Cotton, that is to say, all kinds of cotton (indigenous or imported), 4%" whether ginned or unginned, baled, pressed or otherwise including cotton waste. The assessing authority on the turnover up to June 27, 1990, levied the tax at the rate of 4 per cent under entry No. 13 in the notification dated March 23, 1989. However, for the period between June 28, 1990 to December 26, 1990, which was governed by notification dated June 27, 1990, he was of the opinion that "surgical cotton" does not fall in any of the specific entry under the said notification and therefore, he levied the tax under the residuary clause at the general rate of 10 per cent on the turnover of the surgical cotton for that period. This revision petition relates to the question as to under which entry the commodity "surgical cotton" or "absorbent cotton", as the commodity in question is known and marketed, is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tton" for the purposes of tax under the said entry which was earlier excluded from within the meaning of "cotton". The learned counsel for the petitioner urged that as the notification has used the words "all kinds of cotton", to explain the meaning of word "cotton" by using the words "that is to say", the use of words "in its manufactured or unmanufactured state" before their deletion in the notification dated March 23, 1989 was mere surplusage and therefore, by the change brought out vide notification dated June 27, 1990, no change in the meaning of "cotton" has been brought out. As there is no dispute between the parties that prior to the commencement of the notification dated June 27, 1990, the surgical cotton was included in the entry No. 13, it continued to fall within that entry. On the other hand, Mr. Dinesh Mehta, learned counsel for the Revenue, contended that the use of words "that is to say" is usually employed to clarify and fix the meaning of what is to be explained or defined. The term "cotton" has been suffixed with the phrase "that is to say" followed with other words, defining and fixing the meaning of the term "cotton" for the purpose of taxability of sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition of words are to clear the meaning where it was already implied or where change is merely a change in style in drafting, such change may not justify any change of construction in the amending Act from the one already existed. This principle was applied by the apex Court in Lakshmi Devi Sugar Mills Ltd. v. Pt. Ram Sarup AIR 1957 SC 82, Madanlal Fakirchand Dudhediya v. Shree Changdeo Sugar Mills Ltd. AIR 1962 SC 1543, Md. Quasim Larry v. Muhammed Samsuddin AIR 1964 SC 1699 and Kajari Lal Agarwala v. Union of India AIR 1966 SC 1538. Keeping in view the aforesaid principles regarding construction of an entry in a notification providing rate of tax on various commodities on their sale or purchase, the issue may be examined. The principal entry which is to be interpreted in the light of the phraseology used thereafter is commodity known as "cotton". The word "cotton" according to its dictionary meaning has been defined to mean in different senses. In one sense it means fibrous substance covering the cotton seed. In other it means articles manufactured by such fibrous substance like cotton yarn, thread, fabric, etc. In yet another sense it means the cotton plant itself. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of interpretation in the entry in the two notifications did not include the cotton plant and cotton seed separated from cotton. It also does not include to mean cotton in all its grammatical variant meaning but includes all kinds of cotton falling in one of the general meanings which can be given to keeping in view its ordinary common parlance meaning. Obviously cotton yarns, thread or fabrics made from raw cotton, are not commodities in ordinary commercial parlance known as cotton by trading community in the context of sales tax, but is referable to its primary meaning of "fibrous substance" which clothes the seeds of cotton plants. So soon as it loses its identity as fibrous substance it goes out of the scope of entry "cotton". It may be noticed that even in the unamended entry under notification dated March 23, 1989, the words used were all kinds of cotton "in its manufactured or unmanufactured state". Use of words in "manufactured state" carried within its meaning that cotton which remained substantially a fibrous substance after undergoing manufactured process. But still it could not include articles manufactured from fibrous substance known as cotton, but losing its cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to say' is employed to make clear and fix the meaning of what is to be explained or defined. Such words are not used, as a rule, to amplify a meaning while removing a possible doubt for which purpose the word 'includes' is generally employed." This view was reiterated in Rajasthan Roller Flour Mills Association v. State of Rajasthan [1993] 91 STC 408 (SC). In notification dated March 23, 1989, the word is "cotton" of all kinds in its manufactured or unmanufactured state. However, the aforesaid principle is not of universal application. It depends on the context in which the words "that is to say" are used. In State of Tamil Nadu's case [1976] 37 STC 319 (SC), the position was made amply clear when their Lordships after referring the decision of Megh Raj v. Allah Rakhia AIR 1947 PC 72, observed as under: ".........depending upon the context of the words 'that is to say', this expression may be followed by illustrative instances. In Megh Raj v. Allah Rakhia AIR 1947 PC 72 the words 'that is to say', with reference to a general category 'land' were held to introduce, 'the most general concept' when followed, inter alia, by the words 'right in or over land'. We think that the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Central Sales Tax Act, providing for goods of special importance in the course of interState trade and commerce, the expression used is: "Cotton, that is to say, all kinds of cotton (indigenous or imported) in its unmanufactured state, whether ginned or unginned, baled, pressed or otherwise, but not including cotton waste." For cotton fabric and cotton yarn separate entries were made. In both the above expressions, the framers of the Constitution and Parliament in unmistakable terms confined the meaning of cotton to cotton in its natural form which has not undergone process of manufactures. To signify this intention in the entry 33 of the Concurrent List of the Seventh Schedule, the expression "cotton" was prefixed with word "raw". In the Central Sales Tax Act where prefix "raw" was not there to qualify "cotton", it was made clear by using the words "in its unmanufactured state ". It was by using these very words, that the meaning of cotton was confined to its unmanufactured state in the Second Schedule appended to the Tamil Nadu General Sales Tax Act, 1959. In this context, it may also be noticed that under the Rajasthan Sales Tax Act, an extended meaning to the word " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e use of word "raw" which according to dictionary meaning is in natural or nearly natural form, was accepted and the respondent's contention was rejected by saying: "In our opinion, the submissions urged by the learned Advocate-General are substantial and must be upheld. The Tribunal has been influenced by the fact that cotton wool is described as raw cotton by the dictionaries. But the article with which we are concerned is not cotton wool. It is absorbent cotton wool or surgical cotton wool, which is cotton wool or raw cotton, which has been subjected to certain processes of preparation and is a finished or prepared product from cotton wool as the raw material. Raw cotton after it is changed into absorbent cotton wool would neither in its appearance, nor in its tests and qualities give the same results and effects as the raw cotton, which has not undergone the same processes. The argument advanced by the learned Advocate for the respondents that 'cotton' so long as it retains essentially its substance as cotton, is included within the entry No. I of Schedule B, cannot be accepted in view of the language used in the entry. It is only cotton which can qualify to the description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tton ", but has followed all kinds of cotton as illustrative clause prefixed by word "whether". I am also of the opinion that amendment or the change in phraseology in the notification providing rate of sales tax by notification dated June 27, 1990, replacing the earlier notification dated March 23, 1989, has not resulted in any alteration in the meaning of the term "cotton" as a taxable commodity except to further expand it to include cotton waste also. This brings me to the next question whether the surgical cotton falls within entry 58 as pharmaceutical preparation. This question survives because the general rule of construction demands that if a commodity is covered by a general entry of common genre and a specific entry for the purpose of such Schedule the commodity must be held to be falling under the specific entry. The contention of the learned counsel for the Revenue in this connection was that as there is a specific entry in the Schedule prescribing rate of tax on pharmaceutical preparations under which "surgical cotton" comes, it cannot be taxed under entry 16 for the period in question as cotton because in the context, the term "cotton" is a general entry for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the entry 95 of the First Schedule attached to the Tamil Nadu General Sales Tax Act, 1959, which reads as under: "Drugs, patent or proprietary medicines as defined in section 3 of the Drugs and Cosmetics Act, 1940 (Central Act XXIII of 1940), or medicinal mixtures or compounds, the components of which have not already suffered tax, but excluding arishtams or asavas and including surgical dressing." It would be noticed that the entry in question specifically referred to the words "surgical dressing" which undoubtedly a surgical cotton or the absorbent cotton, which is the commodity in question, is and generally and commercially known as a commodity used in surgical dressing. It may also be noticed that item 2 of the Second Schedule to the Tamil Nadu General Sales Tax Act confined the meaning of cotton to all kinds of cotton "in its unmanufactured state". It was a clear indication that the cotton in its manufactured state in any form did not fall within the general entry of cotton. This also can be safely stated without the fear of contradiction that the surgical cotton is a specie of cotton in its manufactured state. Therefore, the decision of the Madras High Court given in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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