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Commissioner of Sales Tax Vs. Esso Standard Refining Co. of India Ltd. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case Number Miscellaneous Civil Case No. 309 of 1976
Judge
Reported in[1980]46STC216(MP)
AppellantCommissioner of Sales Tax
RespondentEsso Standard Refining Co. of India Ltd.
Advocates: The Government Adv.
Cases ReferredA. P. v. Taj Mahal Hotel
Excerpt:
- indian penal code, 1890.sections 307 & 324: [lokeshwar singh panta & b.sudershan reddy,jj] assault proof - appellant allegedly dealt sickle blow to deceased - testimony of eye-witnesses showed that sudden altercation ensued between appellant and deceased - no evidence to indicate any previous enmity between parties - single blow of sickle had been inflicted by appellant on back of deceased - incised wound allegedly inflicted by appellant - however opinion of doctor proved that deceased had not died due to direct result of said injury held, appellant is therefore liable to be convicted under section 324 of i.p.c., sentence of 3 years imprisonment reduced to period undergone by appellant considering mental agony suffered by him.....to tax under entry no. 39 of part ii of schedule ii or under the provisions of the m. p. sales of motor spirits taxation act, 1957 2. the material facts, as set out in the statement of case, are as follows : the assessee-company is engaged in the business of sale and distribution of petrol and petroleum products. the assessee was assessed to sales tax for the period from 26th december, 1963, to 25th december, 1964, by order dated 28th march, 1968, by the assistant sales tax commissioner. by this order, the turnover arising out of the sale of esso solvents nos. 1425, 2445 and 3040 was taxed under entry no. 39 of part ii of schedule ii to the act, which provided for taxation of all kinds of petroleum products and mineral oils including kerosene oil except those that are liable to tax.....
Judgment:

G.G. Sohani, J.

1. By this reference under Section 44 of the M. P. General Sales Tax Act, 1958, hereinafter called the Act, the Board of Revenue has referred the following question of law to this Court for its opinion :

Whether Esso solvents Nos. 1425, 3040 and 2445 are exigible to tax under entry No. 39 of Part II of Schedule II or under the provisions of the M. P. Sales of Motor Spirits Taxation Act, 1957

2. The material facts, as set out in the statement of case, are as follows : The assessee-company is engaged in the business of sale and distribution of petrol and petroleum products. The assessee was assessed to sales tax for the period from 26th December, 1963, to 25th December, 1964, by order dated 28th March, 1968, by the Assistant Sales Tax Commissioner. By this order, the turnover arising out of the sale of Esso solvents Nos. 1425, 2445 and 3040 was taxed under entry No. 39 of Part II of Schedule II to the Act, which provided for taxation of all kinds of petroleum products and mineral oils including kerosene oil except those that are liable to tax under the M. P. Sales of Motor Spirits Taxation Act, 1957, hereinafter called the Motor Spirits Act. This order was revised by the Additional Commissioner of Sales Tax under Section 39(2) of the Act on the ground that the three categories of solvents sold by the assessee were not exigible to tax under the Act but were so exigible under the Motor Spirits Act. Aggrieved by that order, the assessee filed an appeal before the Board of Revenue and, by an order dated 9th April, 1973, the Board held that the solvents in question were neither motor spirits nor petroleum and were properly taxed under entry No. 39 by the Assistant Commissioner of Sales Tax. In this view of the matter, the Board set aside the order passed by the Additional Commissioner. At the instance of the Commissioner, the aforesaid question of law has been referred to this Court.

3. At the outset, it would be useful to refer to the relevant provisions of law. Entry No. 39 of Part II, Schedule II, to the Act, which was in force at the relevant time, reads as under :

39. All kinds of petroleum products and mineral oils including kerosene oil except those which are liable to tax under the Madhya Pradesh Sales of Motor Spirit and Lubricants Taxation Act, 1957.

Under the Taxation Act, 1957, i.e., the Motor Spirits Act, tax is levied on 'motor spirit' as defined by Section 2(h) of the Motor Spirits Act. That definition is as follows:

'Motor spirit' means any substance which by itself or in admixture with other substances is ordinarily used directly or indirectly to provide reasonable efficient fuel for automative or stationary internal combustion engines and includes petrol, diesel oil and other internal combustion oils but does not include kerosene, furnace oil, coal or charcoal.

The definition of 'petrol' is to be found in Section 2(i) of the Motor Spirits Act and it is as under :

'Petrol' means dangerous petroleum as defined in the Petroleum Act, 1934 (30 of 1934); and includes admixture of power alcohol as defined in the Indian Alcohol Act, 1948 (Central Act 22 of 1948), and petrol.

The provisions of Section 2 (a) and (b) of the Petroleum Act, 1934, which were in force at the material time, are as under :

2. In this Act, unless there is anything repugnant in the subject or context,-

(a) 'petroleum' means any liquid hydrocarbon or mixture of hydrocarbons, and any inflammable mixture (liquid, viscous or solid) containing any liquid hydrocarbon ;

(b) 'dangerous petroleum' means petroleum having its flashing point below seventysix degree Fahrenheit.

It is in the light of the aforesaid provisions that we have to ascertain whether Esso solvents Nos. 1425, 3040 and 2445 are exigible to tax under entry No. 39 of Part II, Schedule II, to the Act or under the provisions of the Motor Spirits Act.

4. Now, it is not disputed that Esso solvents Nos. 1425, 3040 and 2445 fall within the purview of the definition of 'petroleum' as defined by Section 2(a) of the Petroleum Act, 1934. But the Board has found that neither Esso solvent No. 3040 nor No. 2445 has a flashing point below seventy-six degree Fahrenheit. In view of this finding, the learned counsel for the Commissioner conceded before us that Esso solvents Nos. 3040 and 2445 could not be held to be 'dangerous petroleum' as denned by the Petroleum Act, 1934. It, therefore, follows that these substances would not be 'motor spirit' as defined by the Motor Spirits Act and hence the Board was justified in holding that these substances were covered by entry No. 39 of Part II, Schedule II, to the Act.

5. Regarding Esso solvent No. 1425, the Board has observed that the fact that Esso solvent No. 1425 has a flashing point below seventy-six degree Fahrenheit is not sufficient to make it a 'motor spirit' because it cannot provide reasonable efficient fuel for automative or stationary internal combustion engines. It is thus clear that the clause 'which by itself or in admixture with other substances is ordinarily used directly or indirectly to provide reasonable efficient fuel for automative or stationary internal combustion engines', occurring in Section 2(h) of the Motor Spirits Act, has been construed by the Board to govern not only the words 'any substance' preceding the said clause but also the words 'petrol', 'diesel oil' and 'other internal combustion oils', which follow that clause. This construction placed by the Board is, in our opinion, erroneous. Esso solvent No. 1425 is, it is not disputed, 'petroleum' having its flashing point below seventy-six degree Fahrenheit and, hence, it is covered by the definition of 'petrol', as contained in Section 2(i) of the Motor Spirits Act. It, therefore, falls within the definition of 'motor spirit' as defined by Section 2(h) of that Act as by that definition 'motor spirit' includes petrol. As held by the Supreme Court in Income-tax Commissioner, A. P. v. Taj Mahal Hotel [1971] 82 I.T.R. 44 (S.C.), the word 'includes' is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute, and when it is so used, the words and phrases must be construed as comprehending not only such things as they signify according to their nature and import, but also those things which the interpretation clause declares that they shall include. Once a thing is 'petrol' as defined by Section 2(i) of the Motor Spirits Act, it must be held to be 'motor spirit' for the purpose of the said Act and the enquiry regarding use to which that substance is put is not relevant for determining whether it is 'motor spirit' as defined by Section 2(h) of that Act. The learned counsel for the assessee contended that having regard to the association of words preceding 'petrol', it must be construed to mean only that petroleum product which as ordinarily used to provide reasonable efficient fuel for automative or stationary internal combustion engines. The contention cannot be upheld in view of the clear language used in Section 2(h) of the Motor Spirits Act. 'Petrol' as defined by Section 2(i) of that Act, diesel oil and other internal combustion oils are brought within the purview of 'motor spirit' by including those things in the definition of 'motor spirit'. As regards other substances, the test furnished by the definition to ascertain whether it is 'motor spirit' or not is to find out if that substance is ordinarily used directly or indirectly to provide reasonable efficient fuel for automative or stationary internal combustion engines. If a substance is not so used, then it is not 'motor spirit' as defined by the Motor Spirits Act. But, in case of petrol, diesel oil and other internal combustion oils, no further enquiry regarding the ordinary use to which these things are put is contemplated for deciding whether they are covered by the definition of 'motor spirit'.

6. For all these reasons, our answer to the question referred to this Court is that while Esso solvents Nos. 3040 and 2445 are exigible to tax under entry No. 39 of Part II, Schedule II, to the Act, Esso solvent No. 1425 is not so exigible to tax under that provision as it is exigible to tax under the provisions of the M. P. Sales of Motor Spirits Taxation Act, 1957. In the circumstances of the case, parties shall bear their own costs of this reference.

Reference answered accordingly.


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