TMI Blog2010 (9) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 56(2) of the Haryana Value Added Tax Act, 2003 (for short, the Act ), seeking clarification whether caster de-oiled cake, neem de-oiled cake and mahua de-oiled cake are covered by entry 27 in Schedule B to the Act dealing with organic manure and chemical fertilizer, which were tax-free. Order dated May 24, 2004 was passed to the effect that the items in question were not covered by Schedule B and were not tax-free. The same were covered by entry 6 of Schedule C and were taxable. On appeal, the Tribunal reversed the said view and held that the said items will be covered by entry 27. We have heard learned counsel for the parties. The entries in question are reproduced below: SCHEDULE B 27. Organic manure and chemical fertilizer. SCHEDULE C 6. Oil-cakes and de-oiled cakes including de-oiled rice bran. The Tribunal in support of its view that items in question were covered by entry 27, held as under: . . . Now the question arises whether (a) castor de-oiled rice cake, (b) neem de-oiled cake and (c) mahua deoiled cake are organic manure not liable to tax falling within entry 27 of Schedule B to the Act or these are de-oiled cakes falling in entry 6 of Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... norganic fertilizers whenever they are applied together. Gaseous N losses from oil-cakes applied to the plough layer are much smaller than losses from No. 3 fertilizers. Some of these oilcakes retard nitrification of the soil/urea and thereby increase N uptake by the plants. P uptake from calcium phyte ex oil-cakes is higher than that from the super phosphate in maize plants. The learned counsel for the appellant submitted that (a) castor de-oiled cake, (b) neem de-oiled cake or (c) mahua de-oiled cake is an 'organic manure' and is tax-free falling in entry 27 of Schedule B of Act, 2003. It was submitted that oil-cakes are slow in mineralizing and hence compliment quicker acting inorganic fertilizers when they are applied together. Solvent Extractors Association of India which is Premier Association of Vegetable Oil Industry and Trade has observed that oil-cakes/oil meals provide slow nourishment stimulation protection from soil me matodes and insects, improve yields and quality of product like taste, flavour amino acid composition, etc. It was submitted that neem, mahua and castor are tree borne oil-seeds. The Solvent Extractors Association of India (Premier Associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the nature of an organ (in any sense) of an organism, organum or organization organized inherent in organization structural formed as if by organic process organic manure is derived from something which has its origin in living organism. Mahua, neem, castor are tree borne oilseeds. The learned counsel for the appellant thus, submitted that neem de-oiled cake, mahua de-oiled cake, castor de-oiled cake is organism manure. It was submitted that M/s T.R. Solvent Oils Pvt. Ltd., Dunds (Palwal), Mathura Road, Faridabad, sought to obtain permission from the Director of Agriculture, Haryana, under the Fertilizer (Control) Order, 1985 for giving them licence to deal in the sale of neem de-oiled cake, mahua de-oiled cake and castor de-oiled cake and he replied that these items are 'organic manure' and not covered within the Fertilizer (Control) Order, 1985 and as such no licence was needed under the Fertilizer (Control) Order, 1985 by them to be able to sell these items. The learned counsel for the appellant submitted that the Director, Agriculture is an expert who knows what is and what is not 'organic manure' within the meaning of the Fertilizer (Control) Order, 1985 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Sales Tax v. Fadral Chemical Works [1983] 53 STC 425 (All) To submit that three tests for classification of commodities common parlance test, predominant user test and sale purpose test should be applied simultaneously. (ii) Commissioner of Sales Tax, U.P., Lucknow v. Triloki Nath Sons [1984] 57 STC 322 (All) To submit that if there are two competing entries covering the same item, entry more beneficial to the assessee should be held to be applicable. (iii) Commissioner of Sales Tax, U.P. v. Ram Chandra Asha Ram [2001] 123 STC 415 (SC) To submit that predominant user test should be applied when a commodity could be put to more than one uses. Question for consideration is whether the Tribunal was justified in holding caster de-oiled cake, neem de-oiled cake and mahua de-oiled cake to be organic manure under entry 27 of Schedule B in preference to entries of oil-cakes, i.e., entry 6 of Schedule C. Before considering the rival submissions, we may notice the nature of commodities involved. Oil-cake is the coarse solid residue obtained when oil is extracted from oil-seeds. It is commonly used as cattle feed and poultry feed. Oil-cake containing toxic elements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7)-73 dated 3rd April, 1975. It is common knowledge that 'neem ki khali' is not generally used as cattle fodder, but it is commonly known to be used as 'fertilizer'. . . In United Oil Mills v. State of Haryana [1992] 84 STC 72 (P H), it was observed (at page 74): . . . . there can be no escape from the conclusion that oil-cakes and de-oiled cakes cannot be clubbed together to deny exemption from payment of sales tax to de-oiled cakes as has been done by the Legislature in respect of oil-cakes. In other words, de-oiled cakes being fertilizers, would be exempt from payment of sales tax for the relevant period. . . In State of Andhra Pradesh v. Modern Proteins Ltd. [1994] 95 STC 181 (SC); [1994] Supp (2) SCC 496, para 1, it was observed (at page 182 of STC): . . . After decortication and passing through expellers of the groundnut seeds, groundnut oil and groundnut oil-cakes are obtained. The groundnut oil-cake again is subjected to the process in the solvent in which 'food hexane' is sprayed to obtain solvent groundnut oil and groundnut deoiled cake. . . The Tribunal has found that items in question though being part of generic items of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court also referred to a pithy sentence from '200 Chest of Tea' per Story, J. [1824] 9 Wheaton (U.S.) 435 that 'the Legislature does not suppose our merchants to be naturalists, or geologists, or botanists'. 31. The above Planters Nut case [1951] Canada Law Reports 122 was referred to with approval by this court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 STC 286 (SC); AIR 1961 SC 1325. In Ramavatar's case [1961] 12 STC 286 (SC); AIR 1961 SC 1325 this court was concerned with the meaning of the word 'vegetables' occurring in Central Provinces and Berar Sales Tax Act, 1947. This court held as follows: 'But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of everyday use it must be construed in its popular sense meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it . It is to be construed as understood in common language.' 32.. Again in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 203, it was observed: 40. It may be pointed out that this court has clearly and unequivocally laid down that it is not permissible but in fact it is absolutely necessary to depart from the trade meaning or commercial nomenclature test where the trade or commercial meaning does not fit into the scheme of the commercial statements. This court referring to the observation of Pullock, B. in Grenfell v. Inland Revenue Commissioners [1876] 1 Ex. D. 242, 248; 45 LJ QB 465 observed: (quoted at SCR page 724) 'that if a statute contains language which is capable of being construed in a popular sense such statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense, meaning of course, by the words popular sense , that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. But 'if a word in its popular sense and read in an ordinary way is capable of two constructions, it is wise to adopt such a construction as is based on the assumption that Parliament merely intended to give so much power as was necessary for carrying out the obj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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