TMI Blog2011 (3) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... the Gujarat Sales Tax Act, 1969 ( the Act ), at the instance of the State of Gujarat:- Whether, on the facts and in the circumstances of the case, the Gujarat Sales Tax Tribunal was right in law in holding that sale of cutting oil evidenced by invoice No. 4062 dated June 10, 1983 is classifiable under entry 34 of Schedule II, Part A of the Gujarat Sales Tax Act, 1969 and should be taxed accordingly and not under entry 15 of Schedule E, Part A of the said Act or under any other entry thereof? The respondent is a Government company engaged in the business of manufacturing and sale of various kinds of petroleum products including lubricants and speciality oils. Among the various industrial speciality oils manufactured by the assessee are metal cutting and machining oils broadly known as cutting oils which are being marketed by the assessee under the brand name Koolkut and Trimofin . These oils are manufactured predominantly from refined base stocked produced at the assessee's refinery at Trombay mixed with certain additives to meet the end-use requirements. Koolkut and Trimofin grade of cutting oils cover a wide range of water mix and straight cutting oils fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IIA to the Act or as petroleum products under entry 32 of Schedule IIA to the Act, an application was filed by the assessee under section 62 of the Act before the Commissioner of Sales Tax, Ahmedabad, seeking determination of the correct rate of tax on the sales of cutting oils evidenced by invoice dated June 10, 1983. The case of the assessee was that having regard to the predominant functions and end-use, cutting oils cannot really be classified as lubricants under entry 15 of Schedule IIA to the Act. The Commissioner was requested to determine the correct rate of tax, which according to the assessee, was the one applicable under entry 32 of Schedule IIA to the Act, being a petroleum product other than lubricants . The question sought for determination was whether the sales of cutting oils evidenced by invoice No. 4062 dated June 10, 1983 is covered by entry 32 of Schedule IIA to the Act and attracts sales tax at the rate of 5 per cent, ad valorem as prescribed therein. The said question was answered in the negative by the Deputy Commissioner of Sales Tax (Audit), by his order dated July 27, 1984 who, inter alia, held that 'the product cutting oils evidenced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, there is no appearance on behalf of the respondent. The only issue that arises for determination is as to whether the product, viz., cutting oil is classifiable under entry 34 of Schedule II, Part A to the Act or under entry 15 of Schedule II, Part A to the Act. A perusal of the impugned order of the Tribunal indicates that before the Tribunal, it had been contended on behalf of the assessee that the assessee had established from the commercial literature as also from the certificate issued by the processing industries that the product in question could not be characterized as a lubricant on the application of the doctrine of common parlance. In support of the submission, reliance was placed upon the decision of the Supreme Court in the case of Indo International Industries v. Commissioner of Sales Tax, Uttar Pradesh [1981] 47 STC 359 (SC) for the proposition that if any term or expression has been defined in the enactment, then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted. Reliance was also placed upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning attached to them by those dealing in them. If any term or expression has been defined in the enactment, then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment, the meaning of the term in common parlance or commercial parlance has to be adopted. The court, in the said case, observed that though the dictionary meaning of the expression glassware is articles made of glass in a commercial sense glassware would never comprise articles like clinical syringes, thermometers, lactometers and the like, which have a specialized significance and utility. Applying the aforesaid test, the court was of the opinion that the clinical syringes manufactured and sold by the assessee therein should not be considered as glassware , falling within entry 39 of the First Schedule to the U. P. Sales Tax Act, 1948. In the case of Delhi Cloth and General Mills Co. Ltd. v. State of Rajasthan [1980] 46 STC 256 (SC), the Supreme Court held that in determining the meaning or connotation of words and expressions describing an article or commodity, the turnover of which is taxed in a sales tax enactment, if there is one pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry function of these cutting oils is to keep the cutting tool as well as the job cool so that there is no undue deformity and/or fire hazard during the machining/cutting operations. These cutting oils also carry away the metal filling generated during the machining/cutting operations so that there is no undue overloading on the machining/cutting tool. These cutting oils are not used for the lubrication of the machine tools and if there is any lubricating advantage attained during the metal machining/cutting operations that is only secondary and incidental. Thus, applying the common parlance test, the product of the assessee is commonly known as coolant in the commercial as well as common parlance. The invoices produced by the assessee evidencing sale of the product in question indicate that the same has been sold as coolant and not as a lubricant . Thus, when the principal function of the product is to act as a coolant, the consumer recalls primarily the cooling function of the product more than anything else, and consumer purchases the same for using the same as a coolant, merely because the product also has a lubricating effect, the same cannot be classified as lubrica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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