TMI Blog2017 (3) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... he loading charges while computing the sales tax. 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? - Held that: - the word “mineral” is a word of common parlance used in various way but cannot be used in narrow sense. Similarly, it appears from the aforesaid decision that entries in the schedules of sales tax and excise statutes draws colour from the other words therein because of the principle of noscitur a sociis. Thus depending on the aforesaid doctrine in the present context, we have to see whether the ballast is a mineral even if it is not to be defined as mineral under the Act, 1957 or Rules made thereunder. Since the facts are clear in this case to show that the ballast has been prepared from the spalls which are extracted from the quarry taken by the opposite parties on payment of royalty and it has not been defined separately in the tax list, it is to be understood with common parlance - 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” unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded under Section 12(4) of the Act for ₹ 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 made the same exigible to tax at the rate of 12% of the taxable list. Challenging the assessment order, the opposite party preferred First Appeal before the concerned Assistant Commissioner of Sales Tax on the ground that the supply of machine crushed track ballast would come within the fold of works contract and accordingly claimed 85% deduction towards labour and service charges and the rest was claimed to be taxed at the rate of 8% as tax under works contract. The First Appellate Authority disposed of the First Appeal keeping in view the order of this Court passed in P.K.Satapathy V- State of Orissa, reported in (1999) 116 STC 494 (Ori) with the observation that the scope of contract, being supply of machine crushed ballasts, would be liable to be exigible to tax at the rate of 12%. So, the First Appellate Authority confirmed the order of the Assessing Officer. 4. Against the order passed by the First Appellate Authority, the opposite party carried Second Appeal before the Tribunal in the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 that the loading charges of supplied ballasts into Railway wagons would be deducted from assessment under the Act as the same is purely labour work. The Tribunal ought to have considered all clauses of the contract. The Tribunal, being the final fact finding authority, should have taken into consideration the relevant statutory provisions along with the convenants of the contract in order to independently arrive at the conclusion whether the loading charges would form part of the consideration so that the sales tax could be levied on taxable turnover. 8. Mr.Kar, learned Standing Counsel for the Revenue further submitted that the Tribunal erred by considering the claim of the opposite parties that the ballast supplied by it to the Railway is mineral which is exigible to tax at the rate of 4% as per Entry 117 of the taxable list because the Tribunal has transgressed its jurisdiction and authority by deciding the facts which has never before any of the authorities below raised. The Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 contract tax has been deducted at source by the Railways. He further contended that the ballast being the material and the same having been deduced from the quarry which is made out of minerals, the ballast qua ballast is a mineral, the same has been specifically exigible under the Entry 117 of taxable list. As the ballast is deducible like boulder and other material from the quarry by using the dynamite and specifically processed through machine or by manual work, the same is rightly observed by the Tribunal to be classified as minerals being exigible to tax at the rate of 4% of taxable list. 11. Mr.Pati, learned counsel for the opposite parties submitted that the Tribunal, in its Full Bench, has considered that the opposite parties have supplied ballast made out of spall to the Railways and the ballast being the material used as to the bed of a road or a Railways with specific size, the same cannot be a stone as pointed out by the State. The Tribunal, after analyzing in detail un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, 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 plea can be raised in the second appeal without the same being raised in the forums below. 14. DISCUSSIONS Point No.(1) It is not in dispute that the opposite party in STREV No.101 of 2011 is an assessee having undertaken the work of supplying, delivering, stacking and loading of one lakh Cum of machine crushed track ballast to Railways. It is also not in dispute that there was an agreement between the opposite parties and the S.E.Railways for supply and delivery in stacks of machine crushed track ballast and laying the same into both side of track in different locations at Balangir Depot including all costs of materials, loading, unloading, handling, transportation including crossing of Railway lines, if required and royalty, octroi, sales taxes, cess charges and any taxes imposed by the Central/State Government and local bodies on one lakh Cum of loading of ballast supplied into any type of Railway wagons/hoppers with contractor s own loading arrangements including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ription 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 all costs of materials loading, unloading, handling, transportation including crossing of Railway lines if required and royalty, actroi, sales taxes, cess charges and any other taxes imposed by Central/State Govt. and local bodies including all other incidental charges with all lead, lift, etc. complete as per the directions of the Engineer-incharge of the work. 1,00,000 Cum Rs567/- (Rupees five hundred sixty seven only) per cum. Loading of ballast, supplied vide Srl. No.1 above into any type of Railway Wagons/hoppers with contractor/s own loading arrangements including all lead lift crossing of Railway lines etc. complete as per the directions of the Engineer-incharge of the work. 1,00,000 cum Rs.54/- (Rupees fifty four only) per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite party has received ₹ 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 mining, digging, drilling, dredging, laying, draulicing, quarrying or by any other operation and includes mineral oil which in term included defines minerals include all minerals except mineral oils which in term included natural gas and petroleum. But, as per the Act, 1957, the mineral is defined under Section 3(a) which includes all minerals except mineral oil. Similarly, Section 3(e) of the said Act, 1957 defines minor minerals means buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 contract for sale or a contract for work and labour. They merely focus on one or the other aspect of the transaction and afford some guidance in determining the question. 24. From a perusal of the aforesaid decisions with due regard, it appears that whether a contract is one for the sale of goods or for executing works or rendering services are all questions of fact which depend on the terms of the contract including the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions 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 and First Appellate Authority have placed the ballasts as exigible to 12% of tax but the Tribunal after taking the cue from the fact that the ballasts being prepared from the spalls which are stones b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 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 bricks should not be comprehended within the meaning of the word any other mineral which may be declared as a minor mineral by the Government. The word mineral is not a term of art. It is a wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral 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. This distinction between under ground mines and open workings was expressly repudiated in Midland C. v. Haunchwood Brick Tile Co. ((1882) 20 Ch Div 552) and in Hext v. Gill ((1872) 7 Ch 699) 6. The Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 been explained by this Court in Pardeep Aggarbatti V- State of State of Punjab Ors. (1997) 107 STC 567 (1997) 8 SCC 511 (pages 565 of 107 STC): Entries in the Schedules of sales tax and excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 derived from Latin 'texere' which means 'to weave' and it means woven fabric. When yarn, whether cotton, silk. woollen rayon, nylon or of any other description or made out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 interpretation in terms of scientific and technical meanings should be avoided in such circumstances. This, however, is by no means an absolute rule. When the legislature has expressed a contrary intention, such as by providing a stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 accordingly. 39. POINT No.(2) Section 23(3) of the Act states as follows: 23.(3)(a) Any dealer or as the case may be, the State Government dissatisfied with an appellate order made under sub-section (2) may within sixty days from the date of receipt of such order prefer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 charges from the computation of the sales tax in STREV No.101 of 2011. Thus, the findings of the Tribunal in all the second appeals are correct and legal and we confirm the said orders of the Tribunal. In the result, these Revisions, being devoid of an ..... 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