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TMI Blog2017 (3) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... rsing the concurrent order passed by the First Appellate Authority and the Assessing Officer under the provision of Section 12(4) of the Orissa Sales Tax Act, 1947 (hereinafter called "the Act") read with Orissa Sales Tax Rules, 1947 (hereafter called "the Rules"). Since common question of law arose in all these revisions, they are being disposed of by this common judgment. FACTS 2. The factual matrix leading to filing of STREV No.101 of 2011 is that the opposite party is the assessee and it has entered into an agreement with the South Eastern Railway for supply of machine crushed track ballast for laying the same on both the sides of railway track in different locations as per the tender call notice. The tender schedule specifies loading of ballast into any type of railway wagon/hopper with contractor's own arrangements including all lead lift crossing of railway line as per the direction of the Engineer-in-charge of the work. 3. During the assessment year 2001-2002, the Assessing Officer demanded under Section 12(4) of the Act for Rs. 36,15,448/- on 31.3.2003. The Assessing Officer has treated the entire receipt by the opposite party to be sale of chattel qua chattel and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchased the ballast and after crushing the same, made boulders and chips and accordingly they are engaged in selling those products to different buyers. But the Assessing Authority demanded sales tax by taking such materials exigible to tax at the rate of 12% of taxable list and the First Appellate Authority also confirmed such order of the Assessing Authority. Again on the intervention in the Second Appeals, the Tribunal decided said material as "minor mineral", being exigible to tax at the rate of 4% in the taxable list. 7. SUBMISSIONS Mr.R.P.Kar, learned Standing Counsel for the Revenue in all the revisions submitted that the Tribunal has committed gross irregularity by reversing the concurrent finding and conclusion arrived at by both First Appellate Authority as well as the Assessing Authority by erroneously deciding the question of law as borne out from the facts available on record. The Tribunal committed allowing deduction of amount received by the opposite parties in respect of loading of the supplied ballasts from the gross receipts because without analyzing the convenants of contracts, the Tribunal jumped to the conclusion on the basis of schedule of rates and fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Counsel for the Revenue submitted that since the ballast in no way is connected with the minerals but it is a specific material in the process as known to the commercial world, the same has been wrongly interpreted by the Tribunal being exigible to tax at the rate of 4% of the taxable list. Further, the Tribunal has erred in law by admitting the Second Appeal which has been filed beyond the period of limitation contemplated under Section 23 of the Act. The Tribunal has also acted with material irregularity by coming to the wrong conclusion without proper independent application of mind for which the same should be quashed and the order passed by the First Appellate Authority and Assessing Officer should be restored. 10. Per contra, Mr.Damodar Pati, learned counsel for the opposite party submitted that the order of the Tribunal is legal and correct because the agreement between the parties is to supply and delivery in stacks of machine crushed track ballast and laying the same into both sides of track in different locations and the opposite party has received the gross bill, which has been treated as contract for sale as against works contract as per agreement for which the works ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no bar for the State to produce evidence contrary to the plea taken by the opposite parties. On the other hand, whether ballast or its different size is exigible to 12% tax or 4% being a question of law can be raised at any stage before any forum. Be that as it may, according to the learned counsel for the opposite parties that the contention of the learned counsel for the petitioner would not stand in the eye of law on this score. He further submitted that the appeal has been admitted by the Tribunal being filed within time and contention of learned Standing Counsel for the Revenue is untenable. So, he supported the impugned judgment of the Tribunal and prayed for a direction to implement the judgment by the State. 13. POINTS FOR DETERMINATION After going through the contentions of both the parties, it appears that the question of law has not been formulated but the same is being formulated now for discussion as the revisions can be allowed on the question of law raised. So, in these revisions, the questions of law are formulated as under: "(1) Whether the ballast or boulder or chips is exigible to tax at the rate of 4% or 12% of the taxable list? (2) Whether such fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxed at the rate of 12% of the taxable list. In other revision cases, the Assessing Authority has taken the rates by assessing of boulder, chips and ballasts and made them exigible to tax at the rate of 12% of the taxable list. 16. The First Appellate Authority in STREV No.101/2011, after hearing both parties, came to the conclusion that the contract between the parties should be interpreted whether it is a sale of good or for work or labour basically. According to him, to constitute sale, there must be an agreement express or implied relating to sale of goods and completion of the agreement by passing of title in the very goods contracted to be sold. He has referred to the tender schedule, which is reproduced as under: "SOUTH EASTERN RAILWAY TENDER SCHEDULE SCHEDULE OF RATES AND QUANTITIES (East No.(1)33/SBP/97), (2) 34/SBP/97 (3) 35/SBP/96 (4) 34/SBP/96 (5) 30/SBP/97, (6) 35/SBP/97 Sl. No Description of work Approximate Qnty. Rate accepted both in Figures & in words Supply and delivery in stacks of machine crushed track ballast and laying the same into both side of track in different locations. (as per RDSO's specifications Jan-99) at Balangir Depot including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer. In other revision cases, the First Appellate Authority has confirmed the order of the Assessing Officer as ballast, boulder and chips are exigible to the tax at the rate of 12% of the taxable list. 18. On perusal of the order of the Second Appeal, it appears that the Full Bench of the Tribunal has considered the argument of both parties. After going through the contract executed between the parties, Tribunal found that the present opposite party has received Rs. 54/- per Cum towards loading charges of the supplied ballast into any type of Railway wagons as per his own loading arrangement, which is purely a labour work and hence directed to deduct the loading of supplied ballast from the total amount of computation of sales tax liability of the opposite party. Moreover, the Tribunal went on discussion whether the ballast is a mineral exigible to sales tax at the rate of 4% of the taxable list. The Tribunal has discussed about the dictionary meaning of mineral and has also considered the definition of minor mineral under the Act, 1957 and Rules made thereunder. According to Section 2(jj) of the Mines Act, 1952, mineral means all substance which can be obtained from earth by mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding the nature of the obligations to be discharged thereudner and the surrounding circumstances." 22. The Hon'ble Supreme Court, in the case of Patnaik & Company -V- State of Orissa; 16 STC 364, has observed as follows: "The primary difference between a contact for work or service and a contract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole notwithstanding that a part or ever the whole of the materials used by him may have been his property. In the case of a contract for sale, there is in the first instance a chattel which belongs exclusively to a party and under the contract property therein passes for money consideration." 23. Further, the Hon'ble Supreme Court, in the case if Sentinel Rolling Shutters and Engineering Company Pvt. Ltd -V- the Commissioner of Sales Tax; 42 STC 409, has observed as follows: "To distinguish between a contract for sale and contract for work and labour there is no rigid or inflexible rule applicable alike to all transactions. They do not give any magic formula by the application of which one can say in every case whether a contract is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oading of ballasts supplied is a labour charge and the same cannot be termed as a sale after going through the contents of the deed of contract. On the other hand, the supply and delivery of stacks including all other nature of works as agreed to between the parties as per Serial No.1 is a sale. The order of the Tribunal is correct for deducting the loading charges while computing the sales tax. 26. Next question comes in all revisions as to whether the sale of ballasts or boulders or chips including all incidental charges as per Serial No.1 of the tender schedule stated above "mineral" or not. Under the Act, OST schedule as amended vide Finance Department Notification dated 31.3.2001 is as follows: "Under the Orissa Sales Tax (OST) Act, 1947 OST Schedule (Ad amended vide Finance Department Notification dated 31.3.2001) Sl. No. Description of Goods Rate of tax 1 2 3 117 Ores and minerals 4% 189 All other goods 12%" 27. It appears from the aforesaid table that ores and minerals as per Entry No.117 is exigible to 4% tax whereas all other goods which are not mentioned in the schedule is exigible to 12% of tax. Now, both learned Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lasts or boulders or chips supplied spalls being cut to size and spalls have been extracted from quarry. It is a fact that the ballasts, boulders and chips are to be interpreted under the Act but by not taking aid of any other Act. The ballasts, boulders and chips have not been defined under the Act. The question of taking aid of other Act will only arise if there is no use of the same on common parlance. 31. It is reported in the case of Banarasi Dass Chadha and others -V- L.T. Governor, Delhi Administration and others; AIR 1978 SC 1587 where Their Lordships at paragraphs 4 to 7, have observed as follows: "4.We agree with the learned Counsel that a substance must first be a mineral before it can be notified as a minor mineral pursuant to the power vested in the Central Government under Section 3(e) of the Act. The question, therefore, is whether brick-earth is a mineral. The expression "Minor Mineral" as defined in Section 3(e) includes 'ordinary clay' and 'ordinary sand'. If the expression "minor mineral" as defined in Section 3(e) of the Act includes 'ordinary clay' and `ordinary sand', there is no reason why earth used for the purpose of making br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in a given case. Thus, the scientific division of all matter into the animal, vegetable, or mineral kingdom would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom, and therefore, could not be excepted from the grant without being destructive of it. Upon the other hand, a definition which would confine it to the precious metals-gold and silver-would so limit its application as to destroy at once half the value of the exception. Equally subversive of the grant would be the definition of minerals found in the Century Dictionary: as "any constituent of the earth's crust" ; and that of Beinbridge on Mines: "All the Sub- stances that now form, or which once formed, a part of the solid body of the earth". Nor do we approximate much more closely to the meaning of the word by treating minerals as substances which are ""mined"" as distinguished from those are "quarried", since many valuable deposits of gold, copper, iron, and coal lie upon or near the surface of the earth, and some of the most valuable building stone, such for instance, as the Caen stone in France, is excavated from mines running far beneath the surface. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of instrument in question, the word meant in the vernacular of the mining world, the commercial world, and among land owners, and in case of conflict this meaning must prevail over the purely scientific meaning." No material was laid by the assessee before the Tribunal to suggest that in the export world granite was treated as anything but a mineral. Reference was made to the judgment of this Court in Banarsi Dass Chadha & Bros. -V- Lt. Governor. Delhi Administration AIR 1978 1587; (1979) 1 SCR 271. It was there held that the word 'mineral' is a word of common parlance, capable of a multiplicity of meanings depending upon the context. For example, the word is occasionally used in a very wide sense to denote any substance that is neither animal or vegetable. Sometimes it is used in a narrow sense to mean no more than precious metals like gold and silver. Again, the word 'minerals' is often used to indicate substances obtained from underneath the surface of the earth by digging or quarrying. It is at this stage appropriate to refer to the argument of learned counsel for the assessee based upon the doctrine of noscitur a sociis which as he submitted, has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adesh Pan Merchant's Association, Santara Market, Nagpur V State of Madhya Pradesh (Sales Tax Department) and others, 7 STC 99 at 102 referred (1 to E Gretfell V IR.C. (1876) I Ex. D. 242 at 248, Planters Nut and Choco Co. Ltd V. The Kind (1951) 1 DLH 385 and 200 Chest of Tec (1824) 9 Wheaton (U.S.) 430 at 438; quoted with approval. Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention us clearly expressed by the Legislature. The reason is that the Legislature does not suppose our merchants to be 'naturalists, or geologists, or botanists". In the instant case the word 'textiles' is not sought by the assessee to be given a parlance. 3. The concept of 'textiles' is not a static concept. It has, having regard to newly developing materials, methods techniques and processes, a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language be regarded as textiles. The word 'textiles' is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Court) 122. The question involved in the said decision was whether salted peanuts and cashew nuts could be considered to be "fruit" or "vegetable" within the meaning of the Excise Tax Act. Cameron J., delivering the judgment, posed the question as follows: "...would a householder when asked to bring home fruit or vegetables for the evening meal bring home salted peanuts, cashew or nuts of any sort? The answer is obviously `no'." Applying the test, the Court held that the words "fruit" and "vegetable" are not defined in the Act or any of the Acts in pari materia. They are ordinary words in every-day use and are therefore, to be construed according to their popular sense. Xx xx xx xx 31. Therefore, what flows from a reading of the afore- mentioned decisions is that in the absence of a statutory definition in precise terms; words, entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or according to their popular meaning. In other words they have to be constructed in the sense that the people conversant with the subject-matter of the statute, would attribute to it. Resort to rigid int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraphs, the meaning of mineral has been well decided in the case of Banarasi Dass Chadha and others -V- L.T. Governor, Delhi Administration and others (Supra). When the ballasts, boulders and chips have got "common parlance" with the minerals as available in Entry 117 even without taking the aid of the Act, 1957 or Rules made thereunder, the facts remain that the quarry leased out to opposite party in STREV No.101 of 2011 or the chips or boulders purchased by other opposite parties from the M/s.OCL who have also got the same from quarry by taking the mining of the same on "common parlance" is nothing but "mineral". It is, therefore, the opinion of the Tribunal in this regard in all the revisions that they are all mineral cannot be said to be incorrect. Of course, the finding of the Tribunal is based on the definition of mineral in the Act, 1957 or Rules made thereunder. Even if taking the "common parlance test" without going to the reasons by the Tribunal, the result is same to the effect that the ballasts, boulders or chips are nothing but "mineral" under Sales Tax Act exigible to tax at the rate of 4% as per Entry 117 of the taxable list. The Point No.(1) is answered acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r clear from the assessment order and the First Appellate Authority's order that sales tax has been demanded for dealing in ballasts or boulders or chips by the respective opposite parties. So, the question is whether they are to be exigible to tax at the rate of 4% or 12% of taxable list in the schedule attached to the Act is a question of law as per the interpretation made by the parties. It is trite in law that the question of law can be raised at any stage. Moreover, the contention of the State that such plea of exigibility to tax at the rate of 4% of the taxable list before the Tribunal is barred by limitation is not acceptable as the said being question of law can be raised at any stage, as discussed above. Point No.(2) is answered accordingly. 43. CONCLUSION From the foregoing discussions, we are of the view that ballasts or boulders or chips being mineral as per Entry 117 of the taxable list are exigible to tax at the rate of 4% of taxable list. Moreover, the appeal has been purportedly filed before the Tribunal with proper perspective and there is no defect in raising any such plea before it. It has already been observed that rightly the Tribunal has excluded the loading ..... X X X X Extracts X X X X X X X X Extracts X X X X
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