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Behari Lal Moti Lal and ors. Vs. the State of Uttar Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case Number Civil Miscellaneous Writ No. 878 of 1973
Judge
Reported in[1975]36STC446(All)
AppellantBehari Lal Moti Lal and ors.
RespondentThe State of Uttar Pradesh and ors.
Appellant Advocate R.R. Agarwal, ;Bhartji Agarwal, ;D.N. Agarwal and ; T.P. Asthana, Adv.
Respondent Advocate Standing Counsel
DispositionPetition allowed
Excerpt:
.....a composition of copper and zinc and for purposes of giving lighter and better shade or colour, nickel, lead and tin are added in small proportions. the use of the words 'gulli bhatties',para bhatties' and 'darja bhatties' also go to show that the word 'brasswares' used in the notification has been used in a wide sense to cover up the basic metal brass and to include all the varieties of brass like gilet, german silver, kansa and phoolwares......the contention of both the parties is that the technical sense is not attached to the use of the word 'brasswares' in the said notification but the word has been used in the sense in which it is understood in its popular sense as is taken by the dealers or the traders and people in general.5. reliance has been placed by both the parties on the case in ramavatar budaiprasad v. assistant sales tax officer, akola [1961] 12 s.t.c. 286 (s.c.), where the supreme court while dealing with the word 'vegetables' as used in item 6 of schedule ii of the c. p. and berar sales tax act, 1947, held that the word 'vegetables' must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. the vegetables having not been denned in the sales tax act.....
Judgment:

C.D. Parekh, J.

1. M/s. Behari Lal Motilal and ten others, manufacturers of brasswares and utensils of Mirzapur have preferred this writ petition challenging the various orders of the Sales Tax Officer, Mirzapur, being annexures V to XIX refusing to grant exemption of tax on the turnover. The State of U. P. issued Notification No. ST-5263/X-902(16)-52 dated 13th September, 1971, under Section 4 of the U. P. Sales Tax Act and directed that no tax on the turnover of the karkhanedars manufacturing brasswares from brass melted and prepared in the furnace known as gulli bhatties, para bhatties and darja bhatties would be payable subject to the conditions mentioned therein. The Sales Tax Officer, Mirzapur, rejected the applications for grant of exemption to the petitioners under the aforesaid notification and passed the provisional assessment orders being annexures XX to XXII, XXIV, XXVI, XXVIII and XXX and also passed assessment orders (annexures XXXVIII, XXXIX and XL to the writ petition), and issued notices of demand (annexures XXIII, XXV, XXVII, XXIX and XXXI). The petitioners have prayed for the quashing of the said assessment orders as well as the notices of demand. They have also prayed for the suitable writ, order or direction directing the Sales Tax Officer, Mirzapur, to grant exemption of the turnover of the petitioners in respect of the wares which, according to the petitioners, are brasswares and are exempted under the notification aforesaid dated 13th September, 1971, from tax. According to the petitioners, they are karkhanedars and manufacture brasswares from brass melted in their bhatties, known as gulli, para and darja bhatties, installed in their premises. Their turnovers are exempted from sales tax under the conditions of the said notification.

2. On behalf of the respondents, the State of U. P. and others, it has been admitted in the counter-affidavit dated 2nd April, 1973 (filed by Shri Ashwani Kumar, who was the then Assistant Sales Tax Officer, Mirzapur), that the petitioners are karkhanedars and that they manufacture brasswares. It is not denied that the petitioners own gulli bhatties, para bhatties and darja bhatties. It is also admitted that the applications for exemption from payment of sales tax were moved by the petitioners, but all the applications were rejected except that of petitioner No. 6, namely, M/s. Rama Metal Industries for the year 1971-72. According to the respondents, the petitioners did not manufacture wares from brass but manufactured wares from metals known as gilet, German silver, nickel, kansa and phool. The plea is that the petitioners were dealing in the wares made from these metals, which are not exempted from tax under the said notification. It has been emphasised in the counter-affidavit that the petitioners were dealers of wares of gilet and German silver and were not dealers of brasswares. According to the counter-version, brass is different from gilet or German silver. It is well-known as such in the trading community. The petitioners being the dealers in gilet and German silver wares were not entitled to the exemption under the aforesaid notification dated 13th September, 1971. The orders passed, refusing to grant the certificates under the said notification, were correctly passed. The plea of the respondents is that the petitioners were liable to tax on the wares other than brass, which they were selling during the course of their business.

3. The only controversy, therefore, between the parties is whether the wares in which the petitioners were dealing were brasswares or wares manufactured from metals other than brass.

4. Both the parties contend as to how the metal is known in the trading community and in common parlance. The contention of both the parties is that the technical sense is not attached to the use of the word 'brasswares' in the said notification but the word has been used in the sense in which it is understood in its popular sense as is taken by the dealers or the traders and people in general.

5. Reliance has been placed by both the parties on the case in Ramavatar Budaiprasad v. Assistant Sales Tax Officer, Akola [1961] 12 S.T.C. 286 (S.C.), where the Supreme Court while dealing with the word 'vegetables' as used in item 6 of Schedule II of the C. P. and Berar Sales Tax Act, 1947, held that the word 'vegetables' must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. The vegetables having not been denned in the Sales Tax Act of C. P. and Berar, the Supreme Court held that the word being a word of every day 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'. It was observed by the Supreme Court that the word 'vegetables' is, therefore, to be understood as denoting the class of vegetables which are grown in a kitchen garden or in a farm and are used for the table. Consequently, 'betel leaves' are not vegetables and would not be exempted from sales tax under item No. 6 of Schedule II of the C. P. and Berar Sales Tax Act, 1947.

6. Reliance has also been placed on the case in Commissioner, Sales Tax, U. P. v. Prayag Chemical Works [1970] 26 S.T.C. 85, where a Full Bench of this Court while explaining away the entry of the word 'chemicals' in the notification, which was involved in that case, held that while interpreting items in statutes like the Sales Tax Act, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense. The Full Bench placed reliance on the case of Ramavatar Budhaiprasad [1961] 12 S.T.C. 286 (S.C.). Both the sides contended that 'brasswares' as used in the notification should be so construed in that commercial sense as it is understood by the general public or by the persons in trade. It was conceded on behalf of the State that the brass by itself is not a metal. It is a composition of two metals, namely, copper and zinc. According to the petitioners, the brass is an alloy mainly consisting of copper and zinc, but sometimes to give a lighter and better shade or colour, nickel, lead and tin are added in small proportion. According to the petitioners, copper is the basis while zinc is the alloy for preparation of brass and if to give lighter or better shade or colour to the metal, nickel, lead or tin are added to the composition, that does not lose its character as brass but remains brass and the wares prepared or manufactured from such metal would remain brasswares. The learned counsel for the petitioners relied on the table given in the said notification, which reads thus:

TABLE

S. No. Class of dealers Rate at which exemptionfee is payable ---------------------------------------------------------------------1 2 3---------------------------------------------------------------------1. Dealers owning gulli bhatties Rs. 25 per year per bhatti.2. Dealers owning para bhatties Rs. 100 per year per bhatti.3. Dealers owning aarja bhatties---------------------------------------------------------------------

7. According to the petitioners, the furnace where the copper and the zinc are melted and converted into brass is called gulli bhatties, para bhatties and darja bhatties and exemption from tax is contemplated provided the fee is paid at the rate given in the schedule. The manufacturers of the brass-wares or karkhanedars in common parlance understand the metal as 'pital'. For the purposes of giving better colour or shade, the other added metals do not change the metal from 'pital'. Even after the nickel or tin is added to, it is known as 'pital'. The words 'gilet' and 'German silver', commercially as well as in the popular sense, are understood as brass. For illustration reliance has been placed on Notification No. ST-9377/X-906(AB-4) 1971 issued in exercise of the powers under Sub-section (2) of Section 3-A of the U. P. Sales Tax Act read with Section 21 of the General Clauses Act where the rates of tax have been declared in respect of the turnover of the goods. At item No. 4(a) copper, tin, nickel or zinc or any other alloy containing any of these metals only 1/2 per cent tax has been imposed, while under item No. 4(b) scrap meant for melting and sheets including circles meant for making brasswares and containing only any or all the aforesaid metals, namely, copper, tin, nickel or zinc, half a per cent rate has been mentioned. This, according to the learned counsel, indicates that a small proportion of tin or nickel added in the metal known as brass does not change its nature and is known as brass. According to the learned counsel, this is the meaning understood by the Government as well while using the words 'brasswares' in this notification. It is urged that 'gilet' and 'German silver' cannot be separated from brass, nor in the commercial sense or in the general sense it can be separated from brass and it is understood in that sense, not only by the trading community but also by the general public. Thus there is also no reason to construe it separately for the purposes of granting exemption under the aforesaid notification dated 13th September, 1971. The metal for the purposes of exemption does not lose its character as such and it remains as brass. The argument, in our opinion, has force.

8. The petitioners have asserted in paragraph 8 of their writ petition that in the commercial world and in the trading public, the various classes of brasswares include brass of yellow colour, white colour also known as gilet or German silver. The manufacturer, the brokers, the commission agents and the purchasers dealing in brasswares, all consider and know all these different classes of wares as brasswares. Paragraph 8 of the writ petition is based on the personal knowledge of the deponent swearing affidavit in support thereof. In reply to paragraph 8 of the affidavit Shri Ashwani Kumar, who has filed the counter-affidavit on behalf of the respondents has asserted that the wares of brass and that of 'gilet' and 'German silver' are commercially different commodities and they are treated as such by the trading community. This factual aspect of the matter, as is apparent from the swearing clause, is based on the perusal of the records and not on the personal knowledge. There is no other record referred to except the market reports. These reports speak about the various kinds of 'brass' known as 'gilet' or 'German stiver'. In our opinion, therefore, the personal knowledge of the petitioners who are in the trade has more weight and of value than that of Shri Ashwani Kumar, whose knowledge about the commercial sense of the word and the popular and public use of the word 'brass' or 'pital', is based on the perusal of the market aspect of the traders of the metal. It has further been asserted in paragraph 8 of the writ petition that for easy quotation in the market reports of Calcutta different names have been used for the metal and they are 'kansa', 'gilet' and 'German silver', but the basic metal is brass and they are only the various classes of brass. In our opinion, that appears to be more sensible and in consonance with the popular sense of the word. When one speaks of German silver, it is very well-understood that the metal is neither manufactured in Germany, nor it is silver. If one goes to purchase the wares of German silver, the purchaser very well understand that he is purchasing brasswares with some polish and nothing other than brass. In the popular sense as well, in our opinion, brasswares as used in the notification is nothing but a composition of copper and zinc and for purposes of giving lighter and better shade or colour, nickel, lead and tin are added in small proportions. Thus interpreting the word 'brasswares' as used in the notification aforesaid dated 13th September, 1971, in our opinion, gilet and German silver, kansa and phoolwares are included and that appears to be the intention of the notification. The word has not been used by the legislature ; it has been used in the notification published under Section 4 of the U. P. Sales Tax Act, 1948, by the Government and while using the word in the notification the Government must be deemed to be aware of all those wares that are included and are sold as brasswares under that heading. The use of the words 'gulli bhatties', 'para bhatties' and 'darja bhatties' also go to show that the word 'brasswares' used in the notification has been used in a wide sense to cover up the basic metal brass and to include all the varieties of brass like gilet, German silver, kansa and phoolwares.

9. In the result, the writ petition must succeed. We, therefore, allow the writ petition and quash the orders of the Sales Tax Officer being annexures V to XIX refusing exemption and we also quash the provisional assessment orders being annexures XX to XXII, XXIV, XXVI, XXVIII and XXX, XXXVIII, XXXIX and XL. We also quash the demand notices annexures XXIII, XXV, XXVII, XXIX and XXXI to the writ petition. We further direct the Sales Tax Officer, Mirzapur, to consider the exemption applications of the petitioners and decide the same according to law.

10. In the circumstances of the case, we make no order as to costs.


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