TMI Blog2009 (4) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 1 of 2007 - - - Dated:- 28-4-2009 - RANJAN GOGOI AND KATAKEY B.P. , JJ. The judgment of the court was delivered by RANJAN GOGOI J. The core issue arising in this revision petition filed by the petitioner-company is whether potato chips manufactured and sold by the petitioner-company under the brand name Lays and Uncle Chips would be covered by entry 80 of Part A of the Second Schedule to the Assam Value Added Tax Act, 2003 (hereinafter referred to as, the Act ) or the said product would fall under the residuary entry covered by the Fifth Schedule to the Act. The aforesaid question arises out of an order dated September 10, 2007 passed by the Commissioner of Taxes, Assam on an application filed by the petitioner-company under section 105 of the Act. The Assam Value Added Tax Act, 2003, has been brought into effect from May 1, 2005. The Act contains five Schedules. The First Schedule enumerates goods that are exempted from payment of tax. The Second Schedule consists of three parts Part A, Part B and Part C which deal with different items chargeable to tax at the rate of four per cent. The Third and the Fourth Schedule which would not be relevant for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following terms: Processed or preserved vegetables and fruits including fruit jam, jelly, pickle, fruit squash, paste, fruit drinks and fruit juice. Once again with effect from October 16, 2008 the said entry was amended to read as follows: Processed or preserved vegetables and fruits including fruit jams, jelly, pickles, fruit squash, paste, fruit drinks and fruit juice but excluding 'potato chips', banana chips and cooked preparation of the vegetables and fruits. Sri C.S. Lodha, learned Senior Counsel for the revision petitioner, apart from contending that the huge volume of materials placed by the petitioner-company before the learned Commissioner in support of its contention that potato chips would be classifiable under entry 80 of Part A of the Second Schedule and not under residuary item included in the Fifth Schedule to the Act were ignored by the said authority as the same do not find any consideration in the impugned order, has also drawn the attention of the court to the amendments made in respect of the said entry. In this regard, the learned counsel has pointed out that processed or preserved fruits and vegetables at one point of time s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood Processing had also issued instructions that potato chips should be treated as a vegetable-based product. In this regard, the attention of the court has been specifically drawn to the specific Government Notifications issued. Relying on a judgment of the apex court in State of Tamil Nadu v. Mahi Traders reported in [1989] 73 STC 228 and that of the Andhra Pradesh High Court in Concap Capacitors v. State of Andhra Pradesh [2006] 148 STC 398, the learned counsel has submitted that the view taken by the Government of India with regard to classification of a product should act as a sufficient basis for the court to hold in a similar manner. Lastly, the learned counsel for the petitioner has contended that the definition of processed vegetable or fruit in entry 80 of Part A of the Second Schedule to the Act is an inclusive definition and jam, jelly, pickles, fruit juices, etc., having been included as items of processed vegetables or fruits, as may be, there is no reason why the inclusive definition should not cover potato chips as an item of processed vegetable. The purport and effect of an inclusive definition has also been sought to be explained by the learned counsel o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aikia has submitted that in the absence of any definition of processed vegetable in the Act, the meaning of the said term must be understood by application of the common parlance test. Sri Saikia has further argued that potato chips in the market is understood by the consumers as a snack item and not as a vegetable item. There is no sale or purchase of potato chips as a vegetable product. In such circumstances, according to Sri Saikia, by application of the common parlance test, which is the judicially approved test for determining the meaning of an item in a taxing statute in the absence of any specific definition, potato chips would be classifiable not as a processed vegetable item under entry 80 of Part A of the Second Schedule. Rather, the said item would be more appropriately classifiable under the residuary item contained in serial No. 1 of the Fifth Schedule to the Act. Sri Saikia has sought to counter the contention advanced on behalf of the petitioner with regard to the inclusive definition of the expression processed vegetable by contending that the reference to jams, jelly, pickle, etc., is illustrative and comprehensive to include only the items specificall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well-settled, what is not excluded would be held to be included . The effect of inclusion of jam, jelly, pickle, etc., within the fold of entry 80 and the absence of any specific exclusion of potato chips from the purview of the said entry until October 16, 2008 would, therefore, express a clear legislative intent of inclusion of potato chips under entry 80. All items of vegetables or fruits that undergo any form of processing so long such items have an acceptable degree of similarity, in our considered opinion, would deserve to be classified as items of processed vegetables or fruits, as may be. A person buying jam or jelly or pickle does not buy such items either as a fruit or vegetable item; yet, jam, jelly and pickle, etc., have been included as items of processed vegetable or fruit under entry 80. Potato chips processed or manufactured from potato, though it may be sold or purchased as a snack item, discloses certain common characteristics or features that are to be found in fruit or vegetable items specifically included under entry 80. In such a situation, we are of the view that it would be correct to hold that potato chips , though not specifically included, y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging to the same genus which is an essential principle of judicial interpretation of an inclusive definition. As already held, in the present case, when the items which are not ordinarily understood to be items of processed vegetable or fruit, i.e., jam, jelly, pickle, etc., are included within the definition of processed fruit or vegetable , the other species of the same genus necessarily has to be understood to be included, particularly, in the absence of any specific exclusion. Much arguments have been advanced on behalf of the rival parties as to whether, in the present case, the words processed vegetables or fruits should be understood by application of the common parlance test, i.e., as to whether the words should be understood in the ordinary sense or the scientific or technical meaning of the said words should be applied. The numerous precedents cited by the learned counsel for the parties on the point have received our due and anxious consideration. There can be no manner of doubt that If a statute uses the ordinary words in every day use, such words should be construed according to their popular sense ... This rule was stated as early as 1831 by Lord Tenterden i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be ascribed to the words used in the statute. In the present case, the specific inclusion of items like jam, jelly, pickles, etc., which in common parlance are not understood to be items of processed vegetable or fruit, gives sufficient indication that processed vegetable or fruit appearing in entry 80 has been given a special or technical meaning as distinguished from the ordinary meaning. If a processed vegetable or fruit is to be understood in the ordinary way, none of the items specifically included in entry 80 could have been so included. That apart, the Government of India has understood potato chips to be a vegetable product for the purpose of classification under the Central Excise Tariff Act. Such understanding has also been reiterated by the Ministry of Food Processing. As held by the apex court in State of Tamil Nadu v. Mahi Traders [1989] 73 STC 228, at page 229, Contemporaneous exposition by the administrative authorities is a very useful and relevant guide to the interpretation of the expressions used in a statute . Considering the above, we are of the view that the words processed vegetables or fruits appearing in entry 80 must be ascribed a fictional mea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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