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Commissioner of Sales Tax Vs. Dawoodbhoy M. Tayabally - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMumbai High Court
Decided On
Case NumberS.T.R. No. 34 of 1969
Judge
Reported in[1975]36STC291(Bom)
ActsBombay Sales Tax Act, 1959 - Sections 61(1)
AppellantCommissioner of Sales Tax
RespondentDawoodbhoy M. Tayabally
Appellant AdvocateM.S. Sanghvi and ;T.R. Andhyarujina, Advs.
Respondent AdvocateR.V. Patel, Adv.
Excerpt:
sales tax - commercial parlance - section 61 (1) and entry no. 22 of schedule e to bombay sales tax act, 1959 - trade recognised glass and glassware as distinct categories - glass sheets and plain glass did not fall under expression 'glassware' - glass sheets liable to be taxed at rate prescribed in entry no. 22. - - 7. the principle that in the construction of the term 'glassware' the test applicable would be the meaning attributed to the said expression in trade parlance or common parlance in trade, finds strong support from the decision in commissioner of sales tax v......made an application to the commissioner of sales tax requesting him to determine whether the sales of glass sheets made by the respondents under the two cash memos dated 21st july, 1962, were covered by entry no. 22 of schedule e to the said act as contended by the respondents. the commissioner, after hearing the respondents, came to the conclusion that the said glass sheets were covered by entry no. 14 of schedule c to the said act and the sales thereof were liable to be taxed at the rate prescribed in the said entry no. 14 of schedule c. the respondents appealed against this decision to the tribunal. the tribunal remanded the case to the commissioner of sales tax with a direction that the respondents should be given an opportunity to lead evidence in support of their contention.....
Judgment:

Kania, J.

1. This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959 (hereinafter referred to as 'the said Act') made at the instance of the Commissioner of Sales Tax.

2. The facts giving rise to the question raised in this reference are as follows : The respondents are glass merchants. On 26th July, 1962, the respondents made an application to the Commissioner of Sales Tax requesting him to determine whether the sales of glass sheets made by the respondents under the two cash memos dated 21st July, 1962, were covered by entry No. 22 of Schedule E to the said Act as contended by the respondents. The Commissioner, after hearing the respondents, came to the conclusion that the said glass sheets were covered by entry No. 14 of Schedule C to the said Act and the sales thereof were liable to be taxed at the rate prescribed in the said entry No. 14 of Schedule C. The respondents appealed against this decision to the Tribunal. The Tribunal remanded the case to the Commissioner of Sales Tax with a direction that the respondents should be given an opportunity to lead evidence in support of their contention that glass sheets did not come within the ambit of the term 'glassware' in entry No. 14 of the Schedule C to the said Act. The respondents then led evidence before the Commissioner by producing affidavits of some merchants and manufacturers as to the meaning attributed in commercial parlance to the expression 'glassware'. No evidence was led on behalf of the department. The Commissioner of Sales Tax, on this evidence, once again came to the expression that the glass sheets sold by the respondents were covered by entry No. 14 of Schedule C to the said Act. The respondents went in appeal against this decision before the Sales Tax Tribunal. The Tribunal, after considering the evidence led before the Commissioner of Sales Tax as aforesaid and after taking into account certain authoritative texts cited by the respondents, came to the conclusion that the trade has recognised 'glass' and 'glassware' as distinct categories and held that glass sheets and plate glass did not fall under the expression 'glassware'. On the basis of this conclusion the Tribunal allowed the appeal of the respondents and held that the glass sheets sold under the two aforesaid cash memos were liable to be taxed at the rate prescribed in entry No. 22 of Schedule E to the said Act.

3. Arising out of the aforesaid decision of the Tribunal the following question has been referred to us for our consideration at the instance of the Commissioner of Sales Tax :

'Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that glass sheets sold by the respondents under the two cash memos dated 21st July, 1962, were covered by entry No. 22 of Schedule E to the Bombay Sales Tax Act, 1959, and not by entry No. 14 of Schedule C to the Act ?'

4. The description of the goods covered by entry No. 14 of Schedule C to the said Act runs as under :

'Glassware, chinaware or articles made of porcelain and glazed earthenware adapted for domestic use, other than those specified in entry 44 in this Schedule and in entry 5 in Schedule E.'

5. Entry No. 22 of the Schedule E to the said Act is a residuary entry covering all goods other than those specified in Schedule A, B, C and D and the preceding entries of Schedule E. We may make it clear that the only contention which has been raised before us is, whether the glass sheets sold by the respondents, as aforesaid, could be said to be covered by the term 'glassware' used in the said entry No. 14 of Schedule C, there being no controversy that if this is not the correct position, then the said glass sheets would be covered by entry No. 22 of Schedule E to the said Act.

6. It was submitted by Mr. Sanghvi, the learned counsel for the applicant, that the question raised in this reference is covered by the decision of a Division Bench of this Court in Tribuwandas Gulabchand & Bros. v. State of Maharashtra [1965] 16 S.T.C. 452.. In that case it was held that the term 'glassware' in entry No. 15 of Schedule I, Part I, to the C.P. and Berar Sales Tax Act, 1947, included glass sheets. The submission of Mr. Sanghvi was that this decision concluded the matter against the respondents in this case. We are afraid that this decision, far from concluding the matter against the respondents in the present case, if at all, concludes the question in favour of the respondents. What has been held by the Division Bench in that case is that the question whether the expression 'glassware' includes glass sheets, as understood in trade parlance, is a matter of evidence and a question of fact. In that case as no evidence was led at any stage of the proceedings to show that in common parlance 'glassware' did not include glass sheets, the question had to be decided on the construction of the entry and the provision in the schedule. A perusal of the decision makes it quite clear that there was no evidence in that case to show as to what was understood by the term 'glassware' in common parlance or in trade parlance. In the absence of such evidence, the Division Bench placed reliance on the definition of the term 'ware' in the Shorter Oxford Dictionary and came to the conclusion that the term 'glassware' would include all articles made of glass and, accordingly, held that the sheet glass was covered by the expression 'glassware'. In our opinion, what this judgment lays down really is that the meaning of terms describing goods in the entries in the schedules to a Sales Tax Act prescribing rates at which commercial articles have to be taxes has to be gathered from the trade parlance or the common parlance in trade. The question as to what is the meaning given to a term used in an entry in common parlance is a question of fact to be determined on evidence and, finally, in the absence of such evidence, the entries could be construed according to their dictionary meaning. If this test is to be applied in the present case, it is quite clear that the respondents must succeed. Voluminous evidence has been led before the Commissioner of Sales tax as to what is the sense in which the expression 'glassware' is understood by traders in this commodity and by persons manufacturing it. It is on this evidence that the Tribunal has come to the conclusion that in trade parlance sheet glass is not included in the expression 'glassware'. The test applied by the Tribunal is completely in accordance with the principles laid down by the Division Bench in the aforesaid case and the Tribunal was, therefore, manifestly correct in the conclusion to which it arrived.

7. The principle that in the construction of the term 'glassware' the test applicable would be the meaning attributed to the said expression in trade parlance or common parlance in trade, finds strong support from the decision in Commissioner of Sales Tax v. Jaswant Singh Charan Singh : [1967]2SCR720 . There it has been held by the Supreme Court that while construing the word 'coal' in entry 1 of Part III of Schedule II to Madhya Pradesh General Sales Tax Act, 1958, the test that would be applicable is, what is the meaning which persons dealing with coal and consumers purchasing it as fuel would give to the word. A sales tax statute, being one levying a tax on goods, must, in the absence of a technical terms or a term of science or art, be presumed to have used an ordinary term as 'coal' according to the meaning ascribed to it in common parlance. It was held that viewed from that angle, both the merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include 'charcoal' in the term 'coal'. The principle laid down in this decision has been reaffirmed by the Supreme Court in Avadh Sugar Mills Ltd. v. Sales Tax Officer : [1973]3SCR546 , where it was held that in finding out the true meaning of 'oil-seeds' found in the sales tax law in question the court has not to refer to dictionaries but to ascertain the meaning ascribed to that term in commercial parlance. In so far as the attempt to rely on the dictionary meaning in preference to the trade meaning is concerned, it would be most apposite to cite the observations of the Supreme Court in Commissioner of Sales Tax v. S. N. Brother : [1973]2SCR852 . It may be mentioned that in that case the department sought to rely on the meanings attributed to the words in question in the Random House Dictionary. In this connection, the Supreme Court has observed as follows :

'This dictionary gives all the different shades of meaning attributable to the words reference but that is hardly helpful in solving the problem raised in the present controversy. The words 'dyes and colours' used in entry No. 10 and the words 'scents and perfumes' used in entry No. 37 have to be construed in their own context and in the sense, as ordinarily understood and attributed to these words by people usually conversant with and dealing in such goods.'

8. In view of the aforesaid discussion, the question referred to us must be answered in the affirmative. The applicant to pay to the respondents the costs of this reference.

9. Reference answered in the affirmative.


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