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Commissioner of Sales Tax Vs. Sagar Bone Mills - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 324 of 1965
Judge
Reported in[1966]18STC338(MP)
AppellantCommissioner of Sales Tax
RespondentSagar Bone Mills
Appellant AdvocateK.K. Dube, Government Adv.
Respondent AdvocateB.L. Seth, Adv.
Excerpt:
.....to earlier must be read harmoniously, and, so read, their effect is clearly to impose sales tax on bones of animals which include crushed bones and bone-meal......the questions which the sales tax tribunal has referred to this court for decision are :-(1) is bone-meal or crushed bone taxable under entry no. 11 of part iii of schedule ii of the madhya pradesh general sales tax act, 1958, read with entry no. 2 of schedule iii of the same act or is it exempt from the payment of sales tax under entry no. 22 of schedule i of the same act ?(2) is it necessary to make an analysis of the crushed bone or bone-meal to find out whether it satisfies the standards prescribed in the schedule appended to the fertilizer (control) order, 1957 ?2. the assessee messrs sagar bone mills, sagar, is engaged in the business of manufacturing crushed bones and bone-meal. in the proceedings for assessment of sales tax for the period from 1st september, 1960, to 28th.....
Judgment:

1. In this reference under Section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958, at the instance of the Commissioner of Sales Tax the questions which the Sales Tax Tribunal has referred to this Court for decision are :-

(1) Is bone-meal or crushed bone taxable under entry No. 11 of Part III of Schedule II of the Madhya Pradesh General Sales Tax Act, 1958, read with entry No. 2 of Schedule III of the same Act or is it exempt from the payment of sales tax under entry No. 22 of Schedule I of the same Act ?

(2) Is it necessary to make an analysis of the crushed bone or bone-meal to find out whether it satisfies the standards prescribed in the Schedule appended to the Fertilizer (Control) Order, 1957 ?

2. The assessee Messrs Sagar Bone Mills, Sagar, is engaged in the business of manufacturing crushed bones and bone-meal. In the proceedings for assessment of sales tax for the period from 1st September, 1960, to 28th February, 1961, the assessee raised the contention that as crushed bones and bone-meal were exempt from tax under the M.P. General Sales Tax Act, 1958, no sales tax could be levied on sale transactions of crushed bones and bone-meal. This contention was rejected by the Sales Tax Officer, Sagar, who accordingly made an order of assessment on 9th June, 1961. This order of the Sales Tax Officer was upheld in appeal by the Appellate Assistant Commissioner. In the second appeal which was then filed before the Sales Tax Tribunal by the assessee, the Tribunal took the view that under the M.P. General Sales Tax Act, 1958, as also under the Central Provinces and Berar Sales Tax Act, 1947, fertilizers were exempt from tax and that the question whether an article was or was not a fertilizer within the meaning of the relevant entries of the Sales Tax Acts must be decided with reference to the definition of 'fertilizer' given in Section 2 (d) of the Fertilizer (Control) Order, 1957. The Tribunal thought that the assessee had not been given an opportunity of establishing the' fact that the product manufactured by it was a 'fertilizer' within the meaning of the definition given in Section 2 (d) of the Fertilizer (Control) Order, 1957. Accordingly, the Tribunal remitted the matter to the Sales Tax Officer for decision observing :-

If it is found that the sample or samples from the product of the appellant-firm conform to the minimum standard laid down in the Fertilizer (Control) Order he can surely claim exemption under the M.P. General Sales Tax Act or the C.P. and Berar Sales Tax Act as the case may be. On remand the assessing authority should proceed as above and take a decision in accordance with the analytical reports.

3. The period of assessment involved in this reference is governed fully by the provisions of the M.P. General Sales Tax Act, 1958. Schedule I of that Act enumerates goods exempt from sales tax ; and the enumeration contains as item No. 22 'fertilizer other tha oil-cakes.' Thus, fertilizers other than oil-cakes are exempt from tax. It is, however, not necessary to consider whether crushed bones and bone-meal fall within entry No. 22 of Schedule I. The reason is that entry No. 11 of Part III of Schedule II read with entry No. 2 of Schedule III specifically subjects 'bones of animals including powdered bones, horns and hoofs' to tax. Therefore, even if crushed bones and bone-meal were to be taken as fertilizers within the ordinary meaning of the term 'fertilizer', yet the exemption granted by entry No. 22 of Schedule I would not be operative in the face of entry No. 11 of Part III of Schedule II, read with entry No. 2 of Schedule III, making transactions of bones of animals including powdered bones expressly subject to tax. It cannot be denied that bone-meal or crushed bones are 'bones of animals' which include powdered bones. The three entries referred to earlier must be read harmoniously, and, so read, their effect is clearly to impose sales tax on bones of animals which include crushed bones and bone-meal.

4. In coming to the conclusion that the question whether crushed bone or bone-meal manufactured by the assessee was 'fertilizer' for the purpose of the Sales Tax Acts should be determined with reference to the definition of 'fertilizer' given in the Fertilizer (Control) Order, 1957, the Sales Tax Tribunal altogether overlooked the settled rules of construction about the meaning of words used in different statutes. It is firmly settled that the interpretation or definition clause occurring in a statute can be used only for the purpose of interpreting words appearing in that statute and not for the purpose of interpreting words appearing in other statutes. To take a word bearing a peculiar meaning in a particular Act and to clothe that word with the same meaning when found in different context in a different Act is a fallacious process of interpretation. The Tribunal was, therefore, not justified in pressing into service the definition of 'fertilizer' given in the Fertilizer (Control) Order, 1957-a statutory provision, the scope and object of which is altogether different from the Sales Tax Act. The Tribunal was, therefore, in error in remanding the matter to the Sales Tax Officer for a fresh decision after determining whether the produce manufactured by the assessee was or was not a 'fertilizer' according to the definition of that term given in the Fertilizer (Control) Order, 1957.

5. For these reasons, our answer to the first question is that bone-meal or crushed bone is taxable under entry No. 11 of Part III of Schedule II of the M.P. General Sales Tax Act, 1958, read with entry No. 2 of Schedule III of that Act; and that the exemption granted by entry No. 22 of Schedule I of that Act does not apply to bone-meal or crushed bone. Our answer to the second question is that it is wholly irrelevant for the purpose of assessment of sales tax to make an analysis of the crushed bone or bone-meal manufactured by the assessee in order to find out whether it satisfies the standards prescribed in the Schedule appended to the Fertilizer (Control) Order, 1957. It is unnecessary to add that the Tribunal must now dispose of the appeal preferred by the assessee in the light of the answers given by us in this reference. The assessee shall pay costs of this reference. Counsel's fee is fixed at Rs. 100.


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