1. By this petition, the petitioner, who deals in oil extraction and runs his business in the name and style of M/s. Laxmi Oil Mills, questions the validity and legality of the general sales tax imposed for the years 1971-72 and 1972-73, as well as the penalty for non-return in those years.
2. Before we turn to the controversy, the admitted facts may be stated. The petitioner extracts oil at the mills by mechanical process using for that purpose groundnut and linseed. The oil so extracted is put to sale by the petitioner. It is not in dispute that thus he is a 'dealer' for the purpose of the Bombay Sales Tax Act, 1959 (hereinafter called the Act). For the relevant period, i.e., for the years 1971-72 and 1972-73, upon the admitted turnover, the petitioner has been assessed to pay sales tax under entry 6A of Schedule D in the sum of Rs. 436.98 and Rs. 559.03 respectively. Under section 36 of the Act, he has been asked to pay the penalty after giving due notice of Rs. 110 and Rs. 150 respectively for those two years. It is not disputed before us that no returns were filed by the petitioner for those two years. Similarly, it is not in dispute that the petitioner has been heard after giving the show cause notice before the levy of the said penalty.
3. Two questions are urged by the learned counsel, Mr. Natu, in support of the petition. Firstly, it is contended that upon true construction of entry 6A in Schedule D, oil extracted from linseed and groundnut would not be 'vegetable non-essential oil' and, as such, the demand and assessment is not authorised. It is urged that the policy underlying the provisions of section 5 to section 10, along with Schedules A to E, indicate legislative intent to exempt from the impost of sales tax or even the general sales tax sales of items of food-stuffs. This policy would be furthered if edible oil being an article of food-stuff used for human consumption should be deemed to be excluded from the terms of entry 6A by descriptive specific adjective preceding 'oil'. The word 'non-essential', according to the learned counsel, has a reference to items essential for human consumption. In other words, vegetable oils, which are edible, are not within the scope of item 6A of Schedule D. Thus, the first part of the submission is based on this type of approach, wherein 'essential' is tried to be equated with 'edible'. Secondly, it is submitted that though show cause notice and opportunity was given, the order imposing the penalty cannot be sustained as no grounds are disclosed as to why the penalty is being levied. It is submitted that it is a non-speaking order and as such the same is vitiated.
4. Turning to the second ground, we find little merit to delve into it. It is admitted that before the proceedings under section 36 were taken, a due notice was served and that further hearing was afforded. Even on facts there is no dispute that as required by law the petitioner, who was the dealer, failed to make return for the year concerned. The provisions of section 36(2)(c), which are referred to in the body of the order, are clearly, on the admitted positions, answered and the submission that the order is a non-speaking order in such a state of affairs can hardly help the petitioner.
5. Coming to the first part about the interpretation of entry 6A in Schedule D, it is undoubtedly true that the principles that apply to the provisions of taxing statutes are fairly well set, in that the terms of taxing statutes are to be strictly construed and that meanings or connotations attached to the words in such statutes should be understood in their commercial connotation as distinguished from its scientific and technical import. The language of the legislature is primarily meant for communicating its intention to the taxpayer. It will be a valid presumption, therefore, to attribute common and popular meaning to the denominating words with regard to the articles which are the objects of sale and of which the transactions are subjected to the incidence of tax. (See Minerals & Metals Trading Corporation v. Union of India : 1973ECR23(SC) and judgment in Civil Appeal No. 1446 of 1972 : Dunlop India Limited v. Union of India decided by the Supreme Court on 6th October, 1975.) It follows that while interpreting the terms of entry 6A, the petitioner would be entitled to rely on popular or commercial connotation of the article mentioned therein. Before we notice the exact conspectus of the item, at the threshold it is obvious and it is indeed difficult to attach even the common or commercial parlance meaning of the word 'non-essential' as 'non-edible'. It is primary that essential is not necessarily edible; nor edible can be equated with essential.
6. It would be useful to extract the entry itself which is the part of Schedule D appended to the Act and which has to be read along with section 9 directing levy of general tax on the turnover of sales of goods specified in Part I in that schedule, for finding its import.
7. The entry 6A reads as follows :
Schedule D - Part-I
----------------------------------------------------------------------- Sl. Description of goods Rate of general Rate of purchase tax No. sales tax -----------------------------------------------------------------------
* * * *
'6A. Vegetable non-essential Three paise Three paise oils other than in the rupee. in the rupee.' hydrogenated vegetable oils and those to which entry 39 in Schedule C applies.
8. This entry was inserted in the schedule under the notification of 14th March, 1960, and was further amended by amending Act No. 42 of 1971 and the words 'and those to which entry 39 in Schedule C applies' were added by section 13 of that Act. In the setting of entry 6A, the only word on which all emphasis is being put is the descriptive word 'non-essential', for the words 'vegetable oil' do not admit of any difficulty even to the petitioner so also the words 'hydrogenated vegetable oils' and the oils mentioned in entry 39 of Schedule C like 'double boiled linseed oil, blown linseed oil, stand oil, sulphurised linseed oil, perilla oil, whale oil and tung oil'. As stated earlier, the petitioner contends that vegetable non-essential oil means, commercially and in popular sense, 'vegetable non-edible oil', for, 'essential' is equivalent to 'edible'.
9. Even on a plain reading in the context of the object of oil, such a construction appears to us unwarranted. The legislative choice of the item for tax impost is generically 'oil'. Out of it the class of vegetable and non-essential oil is carved out specifically. This is so because oils by themselves are of different kinds, having reference to its origin as well as its uses in the various fields of human activity. To provide for specific description of the kind of oils, it appears, the qualifying words 'vegetable' and 'non-essential' have been used followed by provisions for excepting from those categories specific oils, which would have otherwise fallen in the description of 'vegetable and non-essential oils'. The words 'vegetable' and 'non-essential' are both governing the word 'oil', one denoting the source from which oil is extracted and another mainly indicating its classification, which is determined by its common use or quality.
10. As a kind, 'essential oil' is a separate and specific well-recognised term in commercial as well as in popular parlance. Even in scientific and chemical terms, this term 'essential oil' finds specific place. There is little scope therefore for admission of any doubt or debate as to what is the meaning of the words 'essential oil'. The term 'essential oil' nowhere is equated with 'edible oil'. Taking common parlance as the guiding line, the qualification 'essential' does not lead one to the meaning that its import is 'edible'. The adjective 'edible' simply means fit to be eaten, while 'essential' connotatively has reference to the noun 'essence', meaning the inner distinctive nature of anything or the qualities, which make any object what it is. From this, adjective 'essential' has the meaning as relating to, constituting, or containing the essence; necessary to the existence of a thing; indispensable. Only because oil is an item of food fit for human consumption, it does not follow that it is an 'essential' article of good. As stated earlier, the argument on the plain reading of the words is unsustainable.
11. That 'essential oil' is a commonly known kind of oil is plain if a reference is made to the words available in the dictionary of English language. We can assume that the words given in the book containing the words of the language are known commonly to the public. In fact, the dictionary appears to us to be a compilation of the words available in a language with their meanings, etymology, etc. In a sense the dictionary reflects the available terms known in a particular language.
12. Along with relevant dictionaries it will not be out of place to make reference to the encyclopaedia to find out whether 'essential oil' is a specific kind of oil known to the language.
13. The word 'oil' finds place in the Shorter English Dictionary (Vol. 2, page 1364) and means a substance having the characters, viz., those of being liquid at ordinary temperatures, of a viscid consistence and characteristic unctuous feel, lighter than water and insoluble in it, soluble in alcohol and ether, inflammable and chemically neutral. Dictionary goes on to state that oils are classified as (i) fatty or fixed oils, i.e., of animal or vegetable origin; (ii) essential or volatile oils, which are chiefly of vegetable origin, which are acrid and limpid and form the odoriferous principles of plants, etc., and (iii) mineral oils are mixtures of hydrocarbons. In the Condensed Chemical Dictionary (Seventh Edition, page 690), 'oils' are stated to be the liquids of relatively high viscosity and slippery feel and are classified in three major categories, viz., (1) petroleum or mineral or hydrocarbon oils derived from crude petroleum, (2) fatty oils, also called fixed oils, which are glycerol esters and derived from vegetable or animal fats or similar materials and (3) essential oils derived from plants, usually possessing a characteristic odour or flavour usually not esters but more often terrene hydrocarbons. Thus under the subject of 'oils', 'essential oil' is an independent category of oil, which appears to have its own significance, being of vegetable origin and having an odorous characteristic of the plant or vegetable from which it is extracted. The aroma, odour or flavour which passes upon extraction to the substance called 'oil' appears to be a distinctive feature and it has a characteristic of itself being volatile.
14. The term 'essential oil' separately finds place both in Shorter Oxford English Dictionary (Vol. 1, page 634) and is fully described in Encyclopaedia Britannica (Vol. 8, page 720) and its chemical distinctiveness is mentioned in the Condensed Chemical Dictionary (Seventh Edition, page 378). We may proceed to refer to the Oxford English Dictionary which states that 'essential oil' means 'a volatile oil, obtained by distillation, and having the characteristic odour of the plant from which it comes; as the oil of turpentine, etc.' Encyclopaedia describes it as 'volatile odoriferous bodies of an oily character, obtained almost exclusively from vegetable sources'. It is to be distinguished from the other two kinds of naturally occurring substances and as a class are to be treated as ethereal or volatile and its occurrence in plants as a rule is small. The substances like cloves, rose and jasmine, etc., are mentioned as ones that can yield such type of oil. Even it appears from the methods of extraction like steam distillation; expression by hand or by machinery; or by use of volatile solvents, that by some methods even the rinds of fruits, such as lemon, bergamot, etc., can be subjected to yield 'essential oils'. In the Chemical Dictionary it is stated to be a volatile oil derived from plants, and usually carrying the essential odour or flavour of the plant used. Chemically, these oils are principally terrene (hydrocarbons), but many other classes of compounds are also found and these oils are distinguished from fixed oils, such as linseed oil, or coconut oil, in that the latter are glycosides of fatty acids and hence saponifiable. Essential oils are unsaponifiable. Some of the essential oils are nearly pure single compounds, as oil of wintergreen, which is methyl salicylate; others are mixtures, as spirits of turpentine (pinene, dipentene) and oil of bitter almond. Some contain resins in solution and then are called oleoresins or balsams. Its uses are perfumery, flavours and thinning and extending precious metal preparations used in decorating ceramic-ware.
15. This material available in the dictionaries clearly shows that the term 'essential oil' cannot be mixed up with any other kind of oil, it being a substance of commonly known type in uses, having reference to its origin and quality and utility. For all purposes, it appears to be the class of oil, which is not used as an article of good. On the other hand, it is an article of commerce having variety of uses because of its peculiar characteristics in perfumery or flavours and its constitution being distinguishable from the other classes of oils, which can be called fixed or fatty oils. Generally, the edible oils class themselves because of their characteristics as with the fatty oils. In fact 'fat' is treated as equivalent to 'vegetable oil'.
16. Thus 'vegetable non-essential oils' would only mean the oils of other two categories which are not 'essential oils' and are of vegetable origin. The descriptive word 'non-essential' is used to exclude the kind of oils that fall within the term 'essential oils', for, as stated earlier, essential oils too are drawn from the vegetable origin. The entry 6A takes in, therefore, firstly the vegetable oils and excludes from its operation the essential oils by the descriptive phrase 'non-essential'. Excluding, therefore, the essential oils, which are also extracted from vegetable sources, all other vegetable oils would fall within the entry subject to further exceptions provided specifically in the entry itself being the hydrogenated vegetable oils and those vegetable oils mentioned in entry 39 of Schedule C.
17. The tax that the petitioner was required to pay was on the sale transactions of the oil extracted from groundnut and linseed oil. Those squarely fall within the terms of the present entry, for, the oils so sold are vegetable oils and are not essential oils as understood in common parlance.
18. Once we reach this conclusion, all other submissions advanced by the learned counsel merit no further consideration, for, the taxing statutes cannot be construed on the basis of submissions, which have reference to slippery submissions of general policy or of implications arising therefrom, as was contended by the learned counsel. The object of tax impost being clearly defined and the taxing provision makes it liable to tax, such other debate is impermissible.
19. We do, therefore, find that the orders made are perfectly legal and within the terms of the statute of sales tax. The petition has no merit and the same would stand dismissed. There would, however, be no orders as to costs.
20. Petition dismissed.