1. These six criminal revision applications may be disposed of by one common judgment as they raise the same question of law.
2. The material facts lie within a short compass. Applications Nos. 18, 22 and 23 are made by Nanhey Mal-Narottom Dass and applications Nos. 19, 20 and 21 by Ram Adhin Mathura Prasad. Both the applicants were convicted under Section 299, U. P. Municipalities Act read with Rule 32, Terminal Tax Rules in force in the Lucknow Municipality. Rule 32 framed by the Government of the United Provinces in exercise of the powers conferred by Section 296, U. P. Municipalities Act, 1916, for the assessment and collection of terminal tax published with notification No. 584/XI-D. T. 81, dated 25th February 1928, as subsequently amended, under the said Act, for the Lucknow Municipality runs as follows:
'32. Any person--
(a) who, subject to the condition of Rule 28 fails to pay on demand the terminal tax assessed on his goods under any of these rules, or
(b) a person introducing or attempting to introduce within the terminal tax limits or abetting the introduction within those limits of any goods or animals liable to the payment of tax for which the tax due on introduction has neither been paid nor tendered or ........... shall on conviction by a Magistrate, be punishable under Section 299 (1) with a fine which may extend to Rs. 50 or ten times the amount of tax, whichever is greater.'
3. The petitioners were convicted by a Judicial Magistrate, 1st class, Lucknow, for infringement of the provisions of Section 299, U. P. Municipalities Act read with Rule 32 (b), Terminal Tax Rules by introducing various quantities of denatured salt within the limits of the Lucknow Municipality during the years 1946 and 1946. Nanhey Mal Narottam Dass was convicted for three such offences; and a fine of Rs. 200 or one month's simple imprisonment in default was imposed upon him for each such offence. Applications Nos. 18, 22 and 23 are made challenging the correctness of those orders. Ram Adhin Mathura Prosad was also convicted on three occasions for similar offences. Applications Nos. 19, 20 and 21 relate to orders convicting him. By the three orders to which these applications relate he was fined Rs. 450 or two months' imprisonment in default, on one occasion; Rs. 100 or 15 days' imprisonment in default, on the second occasion, and Rs. 200, or one month's imprisonment in default, on the third occasion. The petitioners went up in appeal against their convictions before the Sessions Judge of Lucknow. Their appeals were all dismissed; hence they have come up in revision to this Court.
4. The petitioners admitted having brought denatured salt within the limits of Lucknow Municipality without payment of terminal tax. It was contended, however, on their behalf that denatured salt was exempt from payment of terminal tax under entry No. 31, of that part of the terminal tax schedule framed by the Lucknow Municipal Board which is headed 'Goods exempted from payment of terminal tax.'
5. Denatured salt means salt rendered unfit for human consumption by admixture with the denaturants and in proportion prescribed in the rules framed by the Central Board of Revenue published in notification dated 10th February 1910. (See the Gazette of India, dated 10th February 1940, part I, page 158). Rule 4 of the rules published under the above-mentioned notification runs as follows:
'Salt shall be rendered unfit for human consumption by mixing one pound avoirdupois of napthaline (commercial) and .01 lb. of a blue or green water soluble colour with every maund of salt, or by mixing the salt, with such other denaturant and in such proportions as the Central Government shall hereafter determine.'
6. Some years ago, a controversy had arisen between Lucknow Municipal Board and some salt merchants on the question whether denatured salt then imported within the municipal limits was liable to terminal tax or was it exempt from the tax as it was covered by the term 'salt' which under entry No. 31 of the terminal tax schedule was exempt from payment of tax. The matter was taken to the officers of the Central Salt and Excise Department, who wrote to the Municipal Board that denatured salt was
'actually salt that has been rendered unfit by Government for human consumption by mixing certain ingredients in very small proportion and, therefore, it should remain exempted from terminal tax like the ordinary salt.'
The Municipal Board did not accept this recommendation of the Collector of Central Excise, who thereupon moved the Provincial Government for its intervention in the matter. The Provincial Government informed the Board that denatured salt is 'salt' for all purposes of taxation as it is just ordinary salt containing a slight mixture of other substances which make it unfit for human consumption. The Government drew the attention of the Board to the facts that salt was exempt from taxation under the terminal tax schedule and that it was a central subject in respect of which the municipal authority could not legislate. The Board did not accept this recommendation of the Provincial Government, and to obtain an authoritative decision from a Court of law started a case against Nanhey Mal Narottam Dass for having introduced within the limits of Lucknow Municipality 891 maunds 16 seers of denatured salt on 27th May 1945. This case was tried by a Special Magistrate, 1st class, who held that denatured salt was not salt within the meaning of that word as used in the schedule attached to the Government notification No. 1195 XI-D. T. 81, dated 24th April 1980. He held that denatured salt was liable to pay terminal tax as a disinfectant under entry No. 56 of the terminal tax schedule. Nanhe Mal Narottam Dass was accordingly convicted. An appeal preferred by him against his conviction was dismissed by the Sessions Judge of Lucknow and the revision application against Sessions Judge's order which was heard by a Single Judge of the late Avadh Chief Court, (Kidwai J.) was also dismissed. It was felt by Nanhey Mal Narottam Dass that his case had not been fully and properly placed before the learned Judge and accordingly another attempt has been made to obtain a decision on that point. Kidwai J. agreed with the view taken by the Sessions Judge that according to its dictionary meaning 'to denature' means 'to change nature or essential qualities'. He held therefore that the very name denatured indicated that it was a preparation in which salt had changed its nature. The learned Judge was of opinion that when salt was treated in such a way as to render it unusable as salt it cannot be said that it still remains salt. He further pointed out that according to the evidence on record before him it was established that the duty chargeable on salt by the Central Government under the provisions of the Central Excise and Salt Act was not charged in respect of denatured salt. It was inferred from this circumstance that for the purposes of taxation the Central Government itself did not treat denatured salt as salt. Kidwai J. accordingly came to the conclusion that denatured salt was not exempt from the liability to pay terminal tax as salt and that the applicant before him had infringed the provisions of the law by introducing denatured salt within the municipal limits without payment of terminal tax.
7. On behalf of the petitioners, their learned counsel urged that because certain notifications of the Government of India could not be placed before the learned Judge of the Avadh Chief Court, who dispossed of Nanhey Mal Narottam Dass' revision application, a wrong conclusion had been arrived at. The learned Government Advocate, who appeared to support the convictions of the petitioners, did not rely on the reasoning upon which the decision in Nanhy Mal Narottam Dass v. Emperor, reported in 1947 O. W. N. 517 : (A. I. R. (35) 1948 Oudh 104 : 49 Cr. L. J. 122) is based. He contended, however, that even assuming that denatured salt was salt it was salt plus something else and, if salt was exempt from payment of terminal tax, the other ingredient which was added to it in order to denature it was not exempted. He argued that no one could escape payment of terminal tax by mixing a small quantity of a taxable article to a large quantity of another article which was exempt from payment of terminal tax. In one case, Nanhey Mal Narottam Dass was proved to have brought within the limits of Lucknow Municipality 595 maunds of denatured salt, on another occasion 595 maunds and 10 seers of denatured salt and on the third occasion a quantity of 599 maunds. Thus, on each of these occasions, he introduced within the limits of the municipality without payment of terminal tax 595 lbs. or more of naphthalene which was not exempt from payment of terminal tax.
8. The petitioners' counsel conceded that his clients could not escape the liability for introducing within the limits of Lucknow municipality various quantities of naphthalene or other ingredients used for denaturing salt when they brought denatured salt. In this view of the matter the petitioners' convictions must stand.
9. What has been said already is sufficient to dispose of these applications. We should not, however, be understood to agree with the reasoning on which the decision in Nanhey Mal Narottam Dass v. Emperor, (1947 O. W. N. 517 : (A. I. R. (35) 1948 Oudh 104 : 49 Cr. L. J. 122) is based. It is true that 'to denature', according to Oxford Dictionary, means 'to change the essential qualities of'. A reference to Webster's Dictionary will, however, show that the term has another meaning, viz. 'to render unfit for eating or drinking'. In our opinion, the past participle in the expression 'denatured salt' is used in the latter sense. Salt is a chemical compound whereof the chemical formula is Nacl (Sodium chloride). Denatured salt is the same compound but with it is mixed another ingredient that renders it unfit for human consumption. Loosely speaking, it may be permissible to say that when salt is denatured it loses its essential quality of being used for human consumption; but is it accurate to call the fitness of salt for human consumption as its essential quality? It is true that this is its most common use and a use most beneficial to human beings. It should, however, not be forgotten that salt is extensively used for consumption by cattle and it has a number of other equally important uses; nor are we impressed with the argument that for the purposes of taxation the Central Government itself does not treat denatured salt as salt. This argument was based on the assumption that under the provisions of the Central Excises and Salt Act duty chargeable on salt was not charged in respect of denatured salt. Under Section 7 of Act XII [121 of 1882 the Central Government was given the power to impose a duty on the manufacture of salt and to reduce or remit any duty so imposed. Though it is unnecessary for us to go into the history of the imposition of duty on denatured salt, it is clear that when the Government in 1940 remitted the duty on denatured salt (see Gazette of India dated 10th February 1940, Pt. I. p. 157) it did so not because denatured salt ceased to be salt but on account of the use to which salt was to be put. We consider it, however, unnecessary to pursue the argument any further.
10. Our attention was invited to the fine imposed on each occasion on the petitioners for having brought quantities of salt within the limits of Lucknow Municipality without payment of terminal tax. As already pointed out under Rule 32 of the Terminal Tax Rules for the Lucknow Municipality a person was on conviction liable to pay a fine which might extend to Rs. 50, or ten times the amount of tax, whichever is greater. The learned Government Advocate did not support the convictions of the appellants for having introduced salt within the limits of the Lucknow Municipality, but he supported them on the ground that they had introduced . within the limits of the municipality another ingredient mixed with salt. Having regard to the quantity of this ingredient introduced on each occasion it would appear that the fines imposed could not be justified. Having regard to all the circumstances of the case, especially as this was a matter upon which different views were entertained by different authorities, we hold that a fine of Rs. 10 in each case will meet the ends of justice.
11. We accordingly allow the revisions in so far that while upholding the convictions of the petitioners we reduce the fine in each case to a sum of Rs. 10 only for each offence. The excess fines, if paid, shall be refunded.