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Tribuwandas Gulabchand and Brothers, Nagpur Vs. the State of Maharashtra - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMumbai High Court
Decided On
Case NumberReference Applicaton No. 15 of 1962 and Sales Tax Reference No. 7 of 1964
Judge
Reported in[1965]16STC452(Bom)
ActsCentral Proviences and Berar Sales Tax Act, 1947 - Sections 23(1)
AppellantTribuwandas Gulabchand and Brothers, Nagpur
RespondentThe State of Maharashtra
Appellant AdvocateF.S. Nariman, Adv., i/b., ;J.M. Thakar, ;C.J. Thakar, ;H.M. Thakar and ;P.D. Thakar, Advs.
Respondent AdvocateD.B. Padhye, Assistant Government Pleader
Excerpt:
.....is an article made of glass and, in our opinion, it would be covered by the comprehensive term glass-ware. similar classification was also to be found, it is alleged, for customs tariff in 1956. by reference to all this material the learned counsel wanted to urge that so far as the trade is concerned there was a well-understood distinction between glass and glass-ware on the one hand and articles of glass as well as plate glass and sheet glass on the other, and the two are separately treated and classified for the purpose of tariff customs, import trade, and classification of articles for compiling foreign trade statistics. the assessee could well have led sufficient evidence to show that the meaning given to the term 'glass-ware' by the people who deal with articles does not..........is an article made of glass and, in our opinion, it would be covered by the comprehensive term glass-ware.'5. then the tribunal referred to a division bench decision of this court, holding that glass chatons were included in the term 'glass-ware' and quoted certain observations from that decision. a copy of that decision is made available to us and that decision was given in civil reference applications nos. 21 and 22 of 1955. the observations on which the tribunal relied are to the following effect :- 'there can be no doubt that the subsequent legislation makes it clear that the legislature intended by the expression 'glass-ware' a very large undefined and indefinite category which included all articles made of glass.'6. in view of these decisions the tribunal rejected the.....
Judgment:

Abhyankar, J.

1. This is a reference at the instance of the assessee made by the Sales Tax Tribunal under section 23(1) of the C.P. and Berar Sales Tax Act.

2. The question that is referred is as follows :-

'Whether the view of the Tribunal that glass sheets fall under entry No. 15 of Schedule I, Part I, to the C.P. and Berar Sales Tax Act, 1947, is justified in law.'

3. The assessee does the business of dealing in glass sheets, photo-frames and pictures. The Sales Tax Officer assessee his turnover for glass sheets at the rate of 7 per cent. holding that this item was covered under 'glass-wares' falling under item No. 15 in the First Schedule of the C.P. and Berar Sales Tax Act, 1947. The chargeable accounting period for which the turnover was determined is from 3rd November, 1956, to 23rd October, 1957. The assessment order was passed on 28th October, 1959. Against this order the assessee preferred a first appeal before the Assistant Commissioner of Sales Tax (Appeals), Eastern Division, Range I. His contention before the first appellate authority was that glass sheets were not subject to sales tax at the rate of 7 per cent. of the glass-ware. The first appellate authority rejected this contention and dismissed the appeal on 30th April, 1960. Against this order the assessee preferred a second appeal which was disposed of by the Assistant Commissioner of Sales Tax (Appeals) Eastern Division, Ranges I and II. That authority also did not accept the contention of the petitioner. It is only the decision of the second appellate authority which is included in the paper book before us. In rejecting the contention of the assessee the appellate authority referred to a decision of the Nagpur High Court which is reported in Commissioner of Sales Tax, Madhya Pradesh, Nagpur v. Mohanlal Ramkishan Nathani [1955] 6 S.T.C. 136. It will be necessary to refer to that decision in considering the contentions raised before us. In view of that decision of the Nagpur High Court, the second appellate authority felt itself bound by the decision and rejected the appeal of the assessee.

4. The assessee then preferred a revision before the Sales Tax Tribunal, Bombay. The Tribunal also referred to the same decision of the Nagpur High Court and held that it could not take a contrary view. The Tribunal observed in paragraph 2 as follows :-

'............ the contention of Mr. Thakkar is that glass sheet is not an article made of glass because, according to him, glass sheet is glass itself. We are afraid we cannot accept this line of reasoning. Glass is a substance containing combination of certain chemicals and it need not be in the form of a sheet. It can be in any conceivable form. Therefore glass sheet like glass-ware is an article made of glass and, in our opinion, it would be covered by the comprehensive term glass-ware.'

5. Then the Tribunal referred to a Division Bench decision of this Court, holding that glass chatons were included in the term 'glass-ware' and quoted certain observations from that decision. A copy of that decision is made available to us and that decision was given in Civil Reference Applications Nos. 21 and 22 of 1955. The observations on which the Tribunal relied are to the following effect :-

'There can be no doubt that the subsequent legislation makes it clear that the Legislature intended by the expression 'glass-ware' a very large undefined and indefinite category which included all articles made of glass.'

6. In view of these decisions the Tribunal rejected the revision filed by the assessee.

7. It does not appear from the record that any evidence was led on behalf of the assessee before the taxing authorities. In fact, a perusal of the order in revision application before the Tribunal will show that the assessee wanted the entry to be understood excluding sheet glass or plate glass from glass-ware as a matter of construction of the entry, the context in which the entry is found, and the general scheme of the Sales Tax Act and the Schedules.

8. It is contended on behalf of the assessee at whose instance this reference has been made, that the meaning in which a term is understood by common people or the trade is the meaning to be given to a term in a taxing statute. The entry which is required to be considered is to be found at Serial No. 15 in Schedule I to the C.P. and Berar Sales Tax Act. That Schedule enumerates the description of goods in respect of which tax is payable by a dealer on the taxable turnover at the rate of 7 naye Paise in a rupee. If the assessee's contention is accepted and it could be held that plate glass and glass sheets are excluded from this entry, then there is no other Schedule in which plate glass or sheet glass is included, and therefore the rate of tax will be the residuary rate at 3 naya Paise in a rupee, provided for in section 5(1)(c) of the Act.

9. Entry No. 15 in Part I of the First Schedule is as follows :-

'Glass-ware, domestic pottery and china, excepting bottles and lamp and lantern chimneys.'

10. The C.P. and Berar Sales Act when it was originally passed contained entry in respect of this class of goods in the following form :- 'Glass-ware, domestic pottery and china.'

11. The entry was altered to its present form by addition of the words 'excepting bottles and lamp and lantern chimneys' by amendment to the Schedule by C.P. and Berar Act No. 16 of 1949. Since then it continues in the present form.

12. According to the assessee, in order to understand the meaning or the intention of the Legislature as to what is included in the term 'glass-ware' in this entry, and whether it includes plate glass or sheet glass, it was necessary to find out the sense in which the word was understood by the trade or by the people dealing with this article. For this purpose, the learned counsel wanted to rely on certain classifications of articles in Indian Trade Classification for the year 1956, which shows the list of articles to be separately specified in the foreign trade returns of India. The learned counsel referred to Division No. 66 in section 6 under which glass was classified into sheet glass, plate glass, rolled piece glass or wall glass, bricks, tiles and other construction materials, laminated glass, glass bulbs for electric lamps, and they come under the title 'glass'. A separate entry describing the goods under the title 'glass-ware' such as bottles, glasses and other containers, bottles and phials, food bottles, milk bottles, soda water bottles, and articles of glass were separately classified. Similarly our attention was also invited to the classification to be found in the rate book published in connection with the Import Trade Control Orders, where sheet glass and plate glass are separately itemised under section 244 and classed as No. 248. A reference was also made to the report of the Tariff Commission regarding continuance of protection to sheet glass industry for the year 1962, indicating that sheet glass industry was qualifying for separate protection and treatment different from other glass-ware. Similar classification was also to be found, it is alleged, for Customs Tariff in 1956. By reference to all this material the learned counsel wanted to urge that so far as the trade is concerned there was a well-understood distinction between glass and glass-ware on the one hand and articles of glass as well as plate glass and sheet glass on the other, and the two are separately treated and classified for the purpose of tariff customs, import trade, and classification of articles for compiling foreign trade statistics. In our opinion, it is not possible or permissible at this stage to enquire into the question whether glass-ware does or does not include glass sheets as understood in trade parlance. That was a matter of evidence and a question of fact. The assessee could well have led sufficient evidence to show that the meaning given to the term 'glass-ware' by the people who deal with articles does not include sheet glass and plate glass, and is not understood so to include these articles of glass in the general term 'glass-ware.' That not having been done, we do not think it is permissible for us for the first time to make an enquiry into this aspect in order to answer the question that has been referred to us. If there was material or evidence before the Tribunal from which such an inference could be drawn as to the sense in which the term is understood by the people who deal with the articles, the assessee would have been in a better position to canvass support for his proposition that in determining the meaning to be given to an expression in a taxing statute, the meaning in which such a term is understood by the people who dealt with it and the article being dealt with by the trade and trades people are relevant factors to be taken into consideration. But no such material was placed before the assessing authority at any stage of the proceeding and we do not think it is possible to enter into this enquiry at this stage. We must therefore hold that the answer to the question will have to be found only on the basis of construction of the provision which was the sole basis for the contention raised before the authorities.

13. The learned counsel relied on the observations of the Supreme Court in its two decisions, Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola [1961] 12 S.T.C. 286, and Ram-Bux Chaturbhuj v. State of Rajasthan [1961] 12 S.T.C. 330, both of which were concerned in determining the meaning to be given to 'vegetables' in the Sales Tax Act. In both these cases the assessees claimed an exemption in respect of turnover of his business of selling betel leaves on the ground that betel leaves were vegetables. This contention was rejected in both the cases on the ground that the term 'vegetable' must be construed not in technical sense, nor from botanical point of view, but as understood in common parlance, the term not having been defined in the Sales Tax Act. The learned counsel wanted to rely on this principle in support of his contention that in common parlance the term 'glass-ware' is understood as those articles of glass which are commonly used on the table, such as crockeries, saucers, plates and other articles for domestic purpose, and does not include plate glass or sheet glass which is used either for window panes or for similar uses. We are not in a position, on the material before the authorities and before the Tribunal in this case, to come to the conclusion that the word 'glass-ware' is commonly understood as excluding plate glass or sheet glass, and this is because there was no evidence led at any stage of the proceeding to show that in common parlance glass-ware does not include sheet glass or plate glass.

14. Thus, in our opinion, the test of common parlance among the people who deal with the article is not available to the assessee in this case in the absence of evidence or material on record to show that the glass-ware is understood in common parlance as excluding sheet glass and plate glass.

15. It was next contended that on a comparison of the various entries in the First Schedule in different parts and also some entries in the Schedule, the intention of the Legislature to exclude sheet glass or plate glass was clear and the entry is liable to be considered as excluding sheet glass or plate glass. Reference was first made to entry No. 35 in the First Schedule, Part 1, which speaks of marbles and articles made thereof, and it is contended that the Legislature could well have said 'glass or articles made of glass'. The use of the word 'glass-ware' suggests that the goods described in entry No. 15, so far as glass-ware is concerned, would not include all articles of glass or glass as such. Then reference is made to entry No. 4 in Schedule 1. Part 1, which speaks of all articles and wares made of gold and silver or of specie, excepting ornaments, or again entry No. 7 in the same part of Schedule 1, which speaks of electroplated articles and wares and articles plated with gold and silver. By reference to these various entries it is contended that where there was an intention to include not only wares of a particular basic material but also articles made of that material, there is a specific reference to wares as well as articles. According to the learned counsel the term 'glass-ware' is analogous to pottery-ware, table-ware, suggesting articles of the type of containers and for table, i.e., at the time of eating. In further support of this contention the learned counsel relied on the definition of the word 'ware' in the dictionary which means a utensil or a container (Shorter Oxford Dictionary which gives a special meaning of 'ware' to be 'vessels etc. made of baked clay,' chiefly with defining word, such as 'brown-ware', 'china-ware', 'delf-ware', 'glass-ware'). But the same Dictionary has also given other known meanings attributed to the word 'ware' such as 'articles of merchandise or manufacture; the things which a merchant, tradesman, or peddler has to sell; goods, commodities.' The learned counsel would want us to select the special meaning given to the word in the Dictionary, as contradistinguishing from the ordinary meaning. If the special meaning is to be given to the word 'glass-ware', it will mean glass vessels, but if the term 'glass-ware' is to be given the ordinary meaning, it would appear that the Dictionary gives the meaning as 'articles of glass' or as goods or merchandise made of glass. There does not therefore appear to be any reason why a special meaning should be given to the term 'glass-ware' as meaning only glass vessels. Webster is another Dictionary to which reference was made. At page 742 the Dictionary describes 'glass-ware' as articles or utensils of glass. According to this meaning, an article of glass is also a glass-ware. If that is so, it would not exclude plate glass or sheet glass. Unless, therefore, there is a compelling reason to restrict the meaning of the term 'glass-ware' as utensils or containers of glass, it would not be a proper construction of the description in entry No. 15 to exclude plate glass or sheet glass from 'glass-ware'.

16. According to the learned counsel for the assessee, though the word may be capable of having a general meaning, a special meaning in the context in which the word is associated in this entry is to be given, namely, glass vessels including glass crockery, or glass table-ware, and thus excluding glass-sheets or plate glass. In this context, the learned counsel referred to a few decisions where it was held that a word of general meaning does not include a special class or a special article. In Vrajlal Bhukhandas v. State of Gujarat [1964] 15 S.T.C. 437 a decision of the Gujarat High Court, the question was whether a shetranji of handloom cloth would be covered by the entry in respect of 'cloth' or 'handloom cloth'. The Court has held that it would not. The learned counsel has also relied upon Industrial and Commercial Service, Allahabad v. Commissioner of Sale Tax [1963] 14 S.T.C. 299, a case of the Allahabad High Court, where the question was whether the word 'books' would include diaries, and it was held that it would not. The learned counsel has referred to a decision of the Supreme Court in Commissioner of Income-tax, Madhya Pradesh v. Sodra Devi : [1957]32ITR615(SC) . The question in that case was whether the words 'any individual' in section 16(3) of the Indian Income-tax Act would include females and children. It was held that the words would include only the male of the species and not females and children. In all these cases the principle of construction that is followed is to understand the context in which the word is used and to see whether restricting it to a particular class would lead to a harmonious construction.

17. Another mode of approach pressed before us by the learned counsel was the association of words in the entry and the colour which the word 'glass-ware' takes from association of similar words in that entry. In other words the learned counsel relied on the principle of construction in the legal maxim noscitur sociis, Maxwell in Interpretation of Statutes at page 325 has explained this maxim of construction as follows :-

'When two or more words which are susceptible of analogous meaning are coupled together noscitur a sociis, They are understood to be used in their cognate sense. They take, as it were, their colour from each other, that is, the more general is restricted to a sense analogous to the less general.'

18. In support of this proposition the learned counsel has emphasized that other items in this entry No. 15 are domestic pottery and China. According to this line of approach, domestic pottery would mean pottery articles for domestic use made of porcelain, crockery or chinaware, such as cups, saucers, bowls and similar articles or containers used on the table. The contention therefore is that the first word 'glass-ware' in this entry must also be understood as pertaining to the same species or having a common characteristic of articles with other articles of domestic pottery or chinaware. In support of this proposition the learned counsel invited our attention to a decision of the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 S.T.C. 286, and the English case of In re An Arbitration between the Podar Trading Company, Bombay, and Francois Tagher, Barcelonese [1949] 2 K.B. 277. In the English case the issue was the interpretation of a term of a contract before the arbitrator. The question was whether the liability of the defendant in that case to supply cotton was governed by a time factor for which provision was made in force majeure clause of events or contingency in which the supplier may be absolved from liability. It was held by the King's Bench Division that the words in the force majeure clause could not be said to include a contingency wholly different from those enumerated in this clause.

19. In our opinion, this contention is also not sound. In the first place, noscitur a sociis is not a rule of universal application. As Crawford in his book on Statutory Construction has pointed out at page 325, paragraph 190, the maxim is not to be applied where the meaning of the word or phrase is clear and unambiguous; nor is it to be used so as to render general words useless. Like all other principles of construction, it is to be used only as an instrumentality for determining the intent of the Legislature where it is a doubt. The question therefore is whether there is any occasion for application of the maxim in the construction of entry No. 15. In our opinion, the addition of the words 'excepting bottles and lamp and lantern chimneys' does not lead to any different meaning as to the import of description of goods in the entry 'glass-ware'. It could not be said that the excepting words would apply to domestic pottery or china also. We cannot normally conceive of lamps and lantern chimneys made of china or pottery, though that is not an impossibility. But those articles are generally of glass and are well-understood by the term 'glass-ware'. The only glass-wares or articles of glass that are excluded are bottles, lamps and lantern chimneys, and not anything else. We must therefore hold that in view of this interpretation of the word 'glass-ware' in entry No. 15 there is no scope for the appellation of the maxim noscitur a sociis.

20. The learned counsel for the State has relied on three decisions, two of the Nagpur High Court and one of this Court. Commissioner of Sales Tax v. Mohanlal Ramkisan Nathani [1955] 6 S.T.C. 136 was a single Bench decision of the Nagpur High Court. In that case this entry in its original form came for examination and it was held that the term 'glass-ware', whether it is interpreted in a narrow sense or otherwise, would include glass sheets. The other decision in the same volume at page 141 Haji Jamaluddin v. The State [1955] 6 S.T.C. 141 was in respect of glass bangles and it was held that they were included in the term 'glass-ware' in entry No. 15. In so holding the Division Bench observed as follows :

'Of course, if it is clear from the statute that a certain word is used in a special sense, it would have to be given the meaning instead. Where, however, it does not appear from the statute that the word is used in a special sense, the natural or dictionary meaning of the word must be given to it.'

21. Ultimately it was held that the expression 'glass-ware' was wide enough to include all articles made of glass. The Division Bench further observed that if there is any doubt about the matter, it would be deemed to have been removed by the addition of the words 'excepting bottles, lamp and lantern chimneys' in entry No. 15.

22. The learned counsel for the State also relies on a Division Bench decision of this Court in Civil Reference Nos. 21 and 22 of 1955 Amritlal Brothers v. State of Bombay decided on 3rd February, 1956. A copy of that decision is made available to us. The question in that case was whether glass chatons were included in 'glass-ware'. In that case also, as here, one of the contentions pressed on behalf of the assessee was that when a particular item is not defined by the Legislature and if the term is not a term of art or science, the Court should interpret it in the sense in which it is understood by people dealing with the subject-matter of the particular statute, and that as the Sales Tax Act is intended to apply to merchants and business people, we must try and find out what meaning is to be given to the expression 'glass-ware' in ordinary parlance and in dealing among these people. The Division Bench then observed as follows :-

'There does not seem to be any clear evidence on record as to what is the meaning given to the expression 'glass-ware' and in the absence of any specific evidence to that effect we must fall back upon the ordinary dictionary meaning of that expression. We have had a look at the Shorter Oxford Dictionary and also the Webster's Dictionary. Both these Dictionaries give only one meaning to the expression 'glass-ware' and that is an article made of glass. If that is the meaning of 'glass-ware' is there anything in the Act which would justify us in limiting the class of goods made of glass. No suggestion is made as to what should be the limitation. It is not sufficient for Mr. Mehta to say that these chatons are not glass-ware. He must tell us how we should limit the definition of glass-ware, and if there is no limitation possible which can be suggested, then the ordinary dictionary meaning must prevail which is any article made of glass.'

23. When this decision was pointed out, the learned counsel for the assessee distinguished the same on the ground that there are other limitations in the statute now under examination and particularly in the Schedule, which show that other articles of glass are separately provided for. For this purpose, our attention was invited to entry No. 13 which speaks of cameras, cine-cameras, projectors, enlargers, lenses and other parts and accessories to cameras, projectors and enlargers, films, film-packs and photographic plates, and to entry No. 25 which speaks of binoculars, telescopes and opera-glasses. The argument is that camera lenses, telescopes, binoculars and opera-glasses which are articles of glass have been separately provided for and therefore the word 'glass-ware' used in entry No. 15 is not all pervading or all comprehensive.

24. The short answer to this contention is that the use of the expression 'lenses' is intimately connected with lenses of cameras. Similarly, entry No. 25 speaks of binoculars, telescopes and opera-glasses. Now, opera-glass is a distinguishing article and is not glass. It is also possible that by describing the goods in two entries there might be some overlapping of entries, which is not uncommon. Thus, the mere fact that some article may fall within the same categories of goods so far as the tax rate is concerned in more than one entry, could not lead to an inference that the general words used in item No. 15 are to be understood in a restricted sense. We must therefore hold that the decision of this Court in Amritlal Brothers v. State of Bombay referred to above, still holds good and does not indicate that a different test is to be applied to the interpretation of entry No. 15 in this case. It would be an entirely different matter if there was material or evidence before the Tribunal from which a finding could be arrived at by those authorities as to the sense in which this entry 'glass-ware' may be understood in the trade parlance or by the people who are called upon to deal with these articles. If there is no such evidence, it is difficult to hold as a matter of construction of the entry and the provision in the Schedule that the term 'glass-ware' excludes either sheet glass or plate glass.

25. Thus, on a consideration of all the objections raised by the assessee we have come to the conclusion that the view taken by the Tribunal that entry No. 15 regarding glass-ware does include sheet glass and plate glass is correct and is justified in law. We therefore answer the question referred to us in the affirmative and against the assessee.

26. The reference is answered accordingly. As the reference is decided against the assessee, the costs of this reference shall be borne by the assessee.

27. Reference answered accordingly.


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