Somnath Iyer, J.
1. This order is made in Writ Petition No. 810 of 1961, which is set down for hearing, and in Writ Petitions Nos. 889, 890, and 891 of 1961, which by consent of parties, are treated as being on the list today for final hearing.
2. In these four cases, the petitioners who are bullion merchants and jewellers in Mangalore, complain that the respondent who is a Commercial Tax Officer, functioning under the Mysore Sales Tax Act, 1957, intends to levy sales tax on sales of bullion effected by them not at the rate prescribed by the seventy-fourth entry in the Second Schedule to the Act, as provided by section 5(3)(a) of the Act but under section 5(1) as if none of the Schedules to the Act prescribes the rate at which sales tax is payable in respect of sales of bullion effected by the petitioners.
3. The petitioners admittedly buy what is described as mint gold from the Bombay mint, and to every eleven parts of gold, they add one part of copper, and make it into a compound and then sell that compound as sovereign gold. It appears that sovereign gold by which name they call the compound they so prepare is used by the petitioners not only for being sold in lumps as bullion but also for the purpose of manufacturing jewellery.
4. Section 5(3)(a) of the Act provides that in the case of sales of any of the goods mentioned in column (2) of the Second Schedule the first or the earliest of successive dealers in the State shall pay tax at the rates specified in the corresponding third column of that Schedule. The 74th entry in the Second Schedule, to which reference is made by this section, reads :-
Goods on the sale of which a Single Point Tax is leviable on the first or earliest of successive dealers in the State under section 5(3)(a). ------------------------------------------------------------------------ Serial No. Description of the goods. Rate of tax.------------------------------------------------------------------------1 2 3 ------------------------------------------------------------------------ * * * 74 Bullion and specie One half per cent. * * *' ------------------------------------------------------------------------
5. Section 5(1) under the provisions of which the Commercial Tax Officer now proposes to make his assessment reads :-
'5. Levy of tax on sale or purchase of goods. - (1) Every dealer shall pay for each year tax on his total turnover at the rate of 2% of such turnover :'
6. It is obvious that sales tax at this rate of 2% of such turnover has to be paid only if, under the Act, a smaller rate of tax is not specified.
7. The case for the petitioners is that what they sell as sovereign gold is bullion within the meaning of that expression occurring in the 74th entry of the Second Schedule and that therefore the Commercial Tax Officer cannot demand of the petitioners tax in excess of a half per cent. of the total turnover and that it is not competent for him to demand tax at 2 per cent. of the turnover under section 5(1).
8. It will be seen from the notice issued by the Commercial Tax Officer to the petitioner in Writ Petition No. 810 of 1961 on 4th July, 1957, in which he proposed to charge sales tax at 2 per cent. of the turnover, that he was influenced in coming to that decision by a pronouncement of their Lordships of the Andhra Pradesh High Court in Sri Akhraj Parakh v. The State of Andhra Pradesh ( 11 S.T.C. 483). Section 6 of the Hyderabad General Sales Tax Act, 1950, the interpretation of which arose for decision in that case, contained the expression 'gold or silver bullion'. Their Lordships expressed the view that that expression meant only pure gold or silver and did not take gold or silver mixed with copper or lead. If this interpretation of the expression 'gold or silver bullion' is correct, it is plain that the Commercial Tax Officer was right in asking the petitioners to pay sales tax on the sales of gold effected by them at the rate specified in section 5(1) and not at the rate specified in the 74th entry of the Second Schedule of the Mysore Sales Tax Act. The question, therefore, is whether the expression 'bullion' occurring in the 74th entry means pure gold or silver or whether the gold sold by the petitioners in these cases which consists of 91.66 recurring percentage of gold and 8.33 recurring percentage of copper is not bullion but some other article of commerce.
9. The meaning of bullion, as given in the dictionary and in the Law Lexicons is that it is gold or silver in the mass or in a lump. The expression 'bullion' employed in the 74th entry makes a distinction between gold which is sold in the mass and gold sold in the form of metallic coins and described as 'specie.' But, the rate specified in that entry is the rate at which tax on sales of bullion gold or silver and on sales of metallic gold or silver coins minted by the authority of law is payable. The expression 'specie' occurring in that entry, it is obvious, means coins made of gold or silver by the Government.
10. But the real question arising is whether if, as the petitioners did in the cases before us, they purchased gold from the mint and added to it a small percentage of copper, which it has been explained to us they do for the purpose of making that gold which they purchase from the mint fit for making jewellery, does the compound so prepared by the petitioners by the addition to the gold purchased from the mint a small percentage of a baser metal, lose the characteristic of bullion, and gets transformed into something other than bullion I do not find, if I may so with the greatest respect to their Lordships of the Andhra Pradesh High Court, any justification for taking the view that the expression bullion necessarily means pure gold or silver. It is true that pure gold and pure silver, as can be seen from the dictionaries, are also bullion, but it will be seen from the meanings given in the various dictionaries, that the only meaning of bullion is not pure gold and pure silver. Bullion mixed with copper which is very often done so that the gold which is purchased from the mint can be made fit for coinage or for manufacturing jewellery is also called bullion. As can be seen from Webster's International Dictionary, an alloy age of precious metal with copper is also called bullion.
11. When we try to understand the meaning of the word bullion, occurring in a statute like the Sales Tax Act we should not give to that expression, even if a scientific or technical meaning is generally given to that expression, such scientific or technical meaning. We should give to that expression, if the expression is one which is generally used in commercial circles, that meaning which is given to it by the traders, or the meaning which is given to it by people who are conversant with it. The meaning, therefore, to be given would be either the meaning given to it in trade or the meaning given to it in popular usage. That was what was pointed out by their Lordships of the Supreme Court in Ramavatar Budhaiprasad v. The Assistant Sales Tax Officer, Akola and Another ( 12 S.T.C. 286), where they pointed out that if an Act contains a word of everyday use, it must be construed in its popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it.'
12. Now, in these cases, it is obvious that even the technical meaning of bullion is not pure gold or pure silver and that even an alloy age of precious metal with copper is technically known as bullion. It is, I think, clear that the expression bullion cannot be given and does not possess any scientific meaning and the only meaning which we can give to it is either the meaning which is ordinarily given to it or the technical meaning which is given to it by traders.
13. If the real meaning of bullion is that it is gold or silver in the mass, unless it can be said that the commodity sold by the petitioners in these cases is not gold but something else it would be impossible for any one to suggest that what they sell is not bullion. It is, I think, incontestable, that if what the petitioners sell can be called gold, what they sell is bullion, since the substance which they call gold and which they sell, is gold in the mass. It is not, I think, correct to think that what the petitioners sell is not gold. Gold, as can be seen from the dictionaries, need not be pure gold. Gold consisting of a small percentage of baser metal which it invariably contains because it is added in order to make the gold, gold of a smaller grade of fineness for the manufacture of jewellery or coinage, does not cease to be gold unless the proportion of the baser metal to the pure gold contained in the substance is so high as to make it impossible for anyone to describe it as gold.
14. If, as I have said, the substance sold by the petitioners contains 91.66 recurring percentage of gold and only 8.33 recurring percentage of copper, that substance, in my opinion, cannot be and is not called by anyone by any other name than gold. As can be seen from the Encyclopaedia Britannica, Volume X, at page 479, the gold which is called the British standard gold, which is a compound prepared by adding a small percentage of copper to the gold purchased from the mint and which is used for minting coins, contains only twenty-two carats of gold and two carats of copper. In other words, the percentage of gold in the substance out of which the coins are minted is only 91.66 and the rest of it is all copper. Yet that substance out of which the coins are minted is called gold and the coin which is minted out of that substance is called a gold coin. If that is what is done in the United Kingdom, I fail to understand why the compound which is sold in these cases by the petitioners, which contains 91.66 recurring percentage of gold and 8.33 recurring percentage of copper, the composition of which is almost the same as the composition of the gold from which the coin minted in the United Kingdom is made, should not also be called gold. It is common knowledge that anyone who goes to the market to buy gold does not intend to buy pure gold unless he requires pure and unalloyed gold for any particular or special purpose. If a person goes to a jeweller and purchases jewellery manufactured out of gold, he does not expect or desire to purchase jewellery manufactured out of pure gold, it being obvious that no jewellery can be manufactured from gold which is not an alloy of gold with copper. Likewise, if a person purchases sovereigns in the market and he purchases those sovereigns which cannot be made without adding to pure gold a small percentage of copper, he does not say what he purchased is not a gold coin but some other kind of coin. It is, therefore, clear that in the popular sense or in the sense in which those persons who are conversant with bullion understand that expression, bullion is not always pure gold or silver but that it includes gold with a very small percentage of copper, added to pure gold.
15. Mr. Govinda Bhat has produced before us a letter addressed to the petitioners by the Madras Jewellers' and Diamond Merchants' Association in which it is pointed out that pure or hundred per cent. gold is not available in this country, and that even gold purchased from the mint is an alloy of pure gold with a small percentage of copper. The Jewellers' and Diamond Merchants' Association has also referred to Bye-Laws 79 and 80 of the Bombay Bullion Merchants' Association, Ltd., which is an association recognised by the Central Government under the Forward Contracts Regulation of 1952, according to which gold bars containing 90 per cent. of gold are tender able against forward bullion contracts. If in trade usage and in commercial transactions, gold bars consisting of 90 per cent. of gold and 10 per cent. of other baser metal is still regarded as bullion, which can be supplied under contracts for the supply of bullion, it follows that sovereign gold sold by these petitioners, which consists of a slightly larger percentage of gold and a slightly smaller percentage of copper, is also regarded in commercial circles, for the purpose of trade, as bullion gold. In my opinion, whether we give to the expression 'bullion' the popular meaning or the meaning given to it in trade, that expression means not only pure gold or silver but also an alloy of gold or silver with such small percentage of some other metal as does not take away from it, the character of bullion.
16. If I may say so with great respect, the view taken by their Lordships of the Andhra Pradesh High Court that bullion always means pure gold or pure silver does not rest upon a correct interpretation of that expression and should not commend itself to us.
17. These writ petitions therefore succeed. We should, therefore, issue a direction to the Commercial Tax Officer, Additional Circle, Mangalore, directing him to determine the tax payable by the petitioners in respect of the sovereign gold sold by them only at the rate specified in the 74th entry of the Second Schedule to the Mysore Sales Tax Act, and not at the rate specified in section 5(1) of the Act. It is so ordered.
18. In the circumstances, there will be no order as to costs.
Iqbal Hussain, J.
19. I agree.
20. Petitions allowed.