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Porritts and Spencer (Asia) Ltd. Vs. State of Haryana - Court Judgment

LegalCrystal Citation
Overruled ByPorritts & Spencer (Asia) Ltd. Vs. State of Haryana
SubjectSales Tax
CourtPunjab and Haryana High Court
Decided On
Case NumberGeneral Sales Tax Reference No. 16 of 1974
Judge
Reported in[1977]40STC333(P&H)
AppellantPorritts and Spencer (Asia) Ltd.
RespondentState of Haryana
Advocates: A.R. Lall and; V.M. Jain, Advs.
Cases ReferredState of Tamil Nadu v. East India Rubber Works.
Excerpt:
overruled / reversed by: porritts & spencer (asia) ltd. vs. state of haryana () - sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part.....a.s. bains, j.1. in this reference there is no controversy on facts which are briefly stated as under :the assessee-firm messrs. porritts and spencer (asia) limited are engaged in the manufacture and sale of cotton/woollen dryer felts at faridabad. the assessee-firm is registered both under the punjab general sales tax act, 1948 (hereinafter called as 'the act') and also under the central sales tax act, 1956. it also deals in inter-state sales and the first such sale was effected on 26th april, 1971. a notice under the act was given to the firm by the assessing authority for its liability to pay sales tax but the assessee-firm contested its liability on the ground that the products (i. e., dryer felts) manufactured by it fell into the category of tax-free goods being covered by item 30 of.....
Judgment:
A.S. Bains, J.

1. In this reference there is no controversy on facts which are briefly stated as under :

The assessee-firm Messrs. Porritts and Spencer (Asia) Limited are engaged in the manufacture and sale of cotton/woollen dryer felts at Faridabad. The assessee-firm is registered both under the Punjab General Sales Tax Act, 1948 (hereinafter called as 'the Act') and also under the Central Sales Tax Act, 1956. It also deals in inter-State sales and the first such sale was effected on 26th April, 1971. A notice under the Act was given to the firm by the Assessing Authority for its liability to pay sales tax but the assessee-firm contested its liability on the ground that the products (i. e., dryer felts) manufactured by it fell into the category of tax-free goods being covered by item 30 of Schedule B of the Act and claimed that it was not liable to get itself registered either under the Act or under the Central Sales Tax Act. This contention of the assessee-firm was not accepted by the Assessing Authority. Accordingly, its liability was fixed under both the Acts with effect from 26th April, 1971. The order of the Assessing Authority is annexure A.

2. Dissatisfied by the order of the Assessing Authority, the assessee-firm filed two revision petitions before the Deputy Excise and Taxation Commissioner on the ground that they were not liable to pay tax as their manufactured goods fell in the category of tax-free goods covered by item 30 of Schedule B of the Act. These revision petitions were dismissed and the copies of the orders are annexures B and C. The assessee-firm then unsuccessfully appealed before the Tribunal. The Tribunal also held that the products manufactured by the assessee-firm were taxable as they were not covered by item 30 of Schedule B of the Act. The Tribunal's order is annexure D. The assessee then moved an application to the Tribunal for making a reference to the High Court which was allowed and reference in the following terms was made to this court:

Whether, on the facts and circumstances of the case, the products manufactured by the petitioner are not covered by item 30 of Schedule B of the Punjab General Sales Tax Act, 1948 and, therefore, not exempt from sales tax both under the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956.

3. This is how we are seized of the matter.

4. Mr. A. R. Lall, the learned counsel for the assessee-firm, contends that the taxing authorities have erred in law in fixing the liability of the assessee-firm to pay sales tax on the goods manufactured by it in view of item 30 of Schedule B of the Act. In order to appreciate the argument of the learned counsel, it is necessary to reproduce Section 6(1) and item 30 of Schedule B of the Act:

6. Tax-free goods.-(1) No tax shall be payable on the sale of goods specified in the first column of Schedule B subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax-free from time to time under this section....

Item 30 of Schedule B.-All varieties of cotton, woollen or silken textiles, including rayon, artificial silk or nylon, whether manufactured by handloom or powerloom or otherwise but not including pure silk fabrics, carpets, druggets, woollen durees and cotton floor durees.

5. A reading of item 30 shows that all varieties of cotton, woollen or silken textiles including rayon, artificial silk or nylon, whether manufactured by handloom or powerloom or otherwise, are exempt from the mischief of the Act, but pure silken fabrics, carpets, druggets, woollen durees and cotton floor durees are not included in the exempted articles. The argument of the learned counsel for the assessee-firm is that dryer felt is a textile and hence the assessee-firm is not liable to pay tax on their products. He contends that the basic material used in the manufacture of cotton dryer felts is a blend of cotton and synthetic yarn normally with a minimum of four-folds which is wound together four-eight fold into a composite thread which in turn is woven into the final product, which is known as a cotton dryer felt; and the basic raw material used in the manufacture of woollen felts is all-wool fibre or wool fibre mixed with a varying percentage of synthetic fibre. The fibre is first oiled and carded on to the condenser rollers and then spun into yarn. The resultant yarn is then wound on to suitable packages for the continuation of the subsequent process of weaving it, which converts the yarn into felt. These felts are used by paper mills in the manufacture of paper. The learned counsel thus makes out a case that this process of manufacturing dryer felts answers the definition of 'textile'. In support of his contention, he relied upon the dictionary meaning of the word 'textile'. According to Webster's New International Dictionary, Second Edition, the meaning of 'textile' is as under :

'textile' adj. 1. Pertaining to weaving or to woven fabrics; as textile arts, textile machinery. 2. Woven or capable of being woven ; formed by weaving ; as cotton and wool are textile fibres ; textile fabrics, 'textile' n. That which is, or may be, woven, a woven fabric or a material for weaving.

6. In the Shorter Oxford English Dictionary on Historical Principles, Third Edition, the meaning of 'textile' is as under :

A. 'textile' adj. 1. That has been or may be woven. 2. Of or connected with weaving.

B. sb. 1. A woven fabric; any kind of cloth. Of or pertaining to weaving or to woven fabrics. 2. Fibrous material, as flax, cotton, silk, etc., suitable for being spun and woven into yarn, cloth, etc.

7. In Encyclopaedia Britannica, Volume 22, the meaning of 'textile' is as under :

The general name applied to the products of the weaver, the derivation of the word being from Lat. texere, 'to weave'.

8. The meaning of the word 'textile' in various dictionaries is more or less the same. It is defined as like a woven cloth, which is woven out of a fabric cotton or woollen. The argument of the learned counsel for the assessee is that the dictionary meaning of the word 'textile' clearly brings the dryer felts within the meaning of the word 'textile' and that the taxing authorities were thus wrong in holding that dryer felts are similar to druggets. He says that even if it may be similar to druggets, it is not specifically excluded from exemption and if the intention of the legislature was to exclude the same, it could also add 'dryer felt' in item 30 as it had added pure silk fabrics, carpets, druggets, woollen durees and cotton floor durees. He also argues that the end use of the goods is not to be seen while determining the liability. I do not find any merit in this contention of the learned counsel. He had relied upon State of Madras v. T. T. Gopalier [1968] 21 S.T.C. 451, wherein their Lordships of the Madras High Court held that 'textiles' as used in entry 4 of Schedule III of the Madras General Sales Tax Act, 1959, should be interpreted broadly in the sense of products obtained by weaving and so interpreted 'braided cords' would also be entitled to the exemption. The same view was taken by their Lordships of the Madras High Court in Deputy Commissioner of Commercial Taxes, Madurai Division, Madurai v. Madurai Printing Tape Factory [1971] 28 S.T.C. 431. With utmost respect I am not inclined to agree with the view taken by their Lordships of the Madras High Court. They have given a very liberal construction to the word 'textile'. No doubt, the dryer felts manufactured by the assessee-firm do answer the definition of 'textile' in the dictionaries, but while construing an entry in the tax law, scientific, technical or dictionary meaning is not to be given. In Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola [1961] 12 S.T.C. 286 (S.C.), the goods were 'betel leaves' and the assessee had pleaded that 'betel leaves' answer the definition of 'vegetables'. In that situation their Lordships of the Supreme Court held that 'betel leaves' could not be regarded as 'vegetables', because 'vegetables' as understood in common parlance do not include 'betel leaves' although from the botanical point of view and the technical point of view betel leaves may come from the same family as the vegetables.

9. In Ganesh Trading Co., Karnal v. State of Haryana [1973] 32 S.T.C. 623 (S.C.), their Lordships of the Supreme Court held that the dictionary meaning is not relevant; what is relevant is how those articles are understood in common parlance by the commercial community. In that case, the assessee carried on the business of buying paddy and after getting it husked either in their own mills or in other mills sold the rice to Government and other registered dealers. On the purchase of paddy the assessee paid purchase tax as provided in the Punjab General Sales Tax Act, 1948. In computing the total turnover of the assessee for levying sales tax, the assessee claimed exclusion of the turnover relating to paddy over which purchase tax had been paid. Their Lordships of the Supreme Court held that the assessee was not entitled to the deduction. It was further observed by their Lordships that although rice is produced out of paddy, it is not true to say that paddy continued to be paddy even after dehusking; that rice and paddy are two different things in ordinary parlance and when paddy is dehusked and rice produced, there has been a change in the identity of the goods.

10. Kosuri Subba Raju v. State of Andhra [1956] 7 S.T.C. 479 is a case Under Section (iii) of the Madras General Sales Tax Act, 1939, which provided that the sale of any cloth woven on handlooms wholly or partly with mill yarn shall be exempt from taxation. In that case, it was held that although nawar tape is woven in narrow bands used as mat for cots on handlooms with mill yarn, yet it cannot be exempted. It was further observed that the word 'cloth' is not a word of art. In common parlance, it designates the fabric used for garments, coverings and such other purposes. It is impossible to conceive that the legislature, which presumably knew the popular meaning of that word, would have used it in a comprehensive sense as to take in nawar tape. A simple test is, would any person go to a bazaar and ask for cloth when he wants nawar tape Though the process of manufacture may be the same, both the words have acquired secondary meanings. If the legislature intended to exempt nawar tape, they would have used that word specifically.

11. In Hind Engineering Co., Rajkot v. Commissioner of Sales Tax, Gujarat [1973] 31 S.T.C. 115, what was required to be seen was whether rubber belting was 'cotton fabrics' as defined by item 19 in the First Schedule of the Central Excises and Salt Act, 1944. Their Lordships of the Gujarat High Court held that the principle which should be applied in construing the expression 'cotton fabrics' is as to what is the meaning of that expression, people conversant with it would attribute to it and, as such, rubber beltings do not fall within the meaning of the expression 'cotton fabrics'.

12. In M. Jeewajee & Co. v. State of Tamil Nadu [1974] 34 S.T.C. 4, the assessee had cut the processed canvas cloth, stitched the edges with eyelets and sold the finished product as tarpaulins. On the question whether 'tarpaulins' would fall within the expression 'textiles' and would be exempt from payment of sales tax Under Section 8 of the Tamil Nadu General Sales Tax Act, 1959, read with item 4 of Schedule III, it was held by their Lordships of the Madras High Court that even assuming that processed canvas cloth out of which tarpaulin is made is textile, as the processed canvas cloth was not sold as such but the tarpaulin was sold as a separate finished product, it could not be treated as 'textile' falling under item 4 of Schedule III to the Act.

13. In Sharfaji Rao v. Commissioner of Sales Tax [1953] 4 S.T.C. 6, the facts were that cloth costing less than Rs. 3 per yard was exempt from the purview of the Hyderabad General Sales Tax Act, 1950 and the assessee, who had manufactured ready-made garments from cloth costing less than Rs. 3 per yard, had claimed exemption from payment of sales tax. It was observed by their Lordships of the Hyderabad High Court that all fiscal enactments should be interpreted strictly and the subject is not to be taxed unless the language of the statute clearly imposes the obligation, that the provisions relating to exemption from tax must also be strictly construed and limited to the exemption itself and that where the intention of the Act is to levy sales tax on all articles generally other than those which are specified in the exempted list, the assessee must show that he comes within that exempted list. With this observation, it was held by their Lordships that ready-made garments made of cloth costing less than Rs. 3 per yard do not come within the exemption.

14. In H. Anjanappa & Son v. Commissioner of Commercial Taxes in Mysore [1970] 26 S.T.C. 139, their Lordships of the Mysore High Court has held that worn out and torn old clothing pieces purchased through hawkers from the public and then sold for the manufacture of paper are not textiles exempted from sales tax under entry 8-A of the Fifth Schedule to the Mysore Sales Tax Act, 1957, because they retain their character of wearing apparel and are therefore liable to sales tax.

15. In Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charon Singh [1967] 19 S.T.C. 469 (S.C.), the assessee was dealing in firewood and charcoal and claimed exemption from the payment of sales tax. It was held by their Lordships of the Supreme Court that while construing the word 'coal' in entry 1 of Part III of Schedule II to the Act, the test that would be applicable is, what is the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales tax statute, being one levying a tax on goods, must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as 'coal', according to the meaning ascribed to it in common parlance. Viewed from that angle, both the merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include 'charcoal' in the term 'coal'. It was further held by their Lordships that while interpreting items in statutes like Sales Tax Acts, resort should be had not to the scientific or 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.

16. In Delhi Cloth and General Mills Co. Ltd. v. R. R. Gupta [1976] 38 S.T.C. 113 (S.C.), their Lordships of the Supreme Court have held that it is for the taxing authorities to decide the question of fact.

17. The reading of these various authorities shows that when an assessee claims exemption, it is he who has to prove that his manufactured goods are exempt from the sales tax. The ratio of these authorities is that the articles are to be construed as are understood in common parlance by the seller and the purchaser. In the instant case, the assessee-firm has not produced any evidence before the Assessing Authority to show that the dryer felt is a textile. He should have shown by producing evidence that in common parlance dryer felt is known as textile. If one goes to the bazaar for purchasing dryer felt and asks for textile, nobody would understand by the word 'textile' that dryer felt is required. Admittedly, dryer felt is used for the purposes of belting and drying paper in the paper mills. Dryer felt is a product which is used only by the factories, it is not in use by the common man. The intention of the legislature in giving exemption to the textile goods seems to be to those goods which are in daily use by the common people, that is why druggets, carpets, cotton floor durees, etc., are excluded from the exemption. It is true that this exclusion has created some confusion and the dryer felt should also have been excluded. But it appears that the legislature never was in doubt that the dryer felt does not come within the definition of 'textile'. When the articles like carpets, durees, druggets, etc.,.also are not exempt although used by some people, it cannot be the intention of the legislature to exempt the dryer felt, which is not in use by common people except the factories.

18. For the reasons recorded above, I am of the considered view that dryer felt does not fall within the definition of 'textiles' under item 30 of Schedule B of the Act and, consequently, the assessee-firm cannot claim exemption from their liability to pay the sales tax on the dryer felts manufactured by them and, accordingly, the reference is answered against the assessee and in favour of the revenue. No costs.

S.C. Mittal, J.

19. The question for determination is whether the product of the petitioner-firm named as 'dryer felts', cotton and woollen, is 'textile' or not The pertinent facts in this regard, as asserted by the petitioner-firm are: The basic material used in the manufacture of cotton dryer felt is a blend of cotton and synthetic yarn, normally with a minimum of four-folds, which is wound together four-eight fold into a composite thread, which in turn is woven into the final product known as cotton dryer felt. In the manufacture of woollen dryer felt, the raw material used is wool fibre or wool fibre mixed with a varying percentage of synthetic fibre. The fibre is first oiled and carded on to the condenser rollers and then spun into yarn. The resultant yarn is then wound on to suitable packages for the continuation of the subsequent process of weaving it, which converts the yarn into the felt.

20. It will not be out of place to quote here the following observation from the order of the Assessing Authority :.I have had the occasion to watch the manufacturing process as also the finished products. The raw material used by the company is cotton and woollen yarn which they themselves manufacture from raw wool and cotton and the finished product, called felts, which is manufactured on powerlooms from cotton and woollen yarn. In the finished condition these almost resemble with druggets and carpets. Druggets and carpets have been specifically excluded from item 30 of Schedule B of the State Act. By applying any technical meaning, it cannot be stretched so as to bring it within the purview of item 30 of the said Schedule.

21. In view of the above, it seems clear that the Assessing Authority did not doubt that the 'dryer felts' were cotton and woollen textiles. It was their resemblance with druggets and carpets which influenced the Assessing Authority to exclude them from the purview of item 30 of Schedule B of the Act. The Assessing Authority having himself seen the process of manufacture of the 'dryer felts' and having satisfied himself, it is too late in the day to raise a contention on behalf of the respondent that the petitioner-firm led no evidence to show that the 'dryer felt' is a textile.

22. Learned counsel for the petitioner then emphasised that as mentioned in the order of reference by the Sales Tax Tribunal, Haryana, the 'dryer felt' has been considered as textile by the central excise authorities in regard to the levy of additional excise duty.

23. There is no quarrel with the proposition that in construing fiscal enactments, in the absence of a technical term, or a term of science or art, the statute must be presumed to have used a term according to the meaning ascribed to it in common parlance. This principle of interpretation will apply to articles like rice and paddy, cloth and niwar, canvas cloth and tarpaulin, coal and charcoal and betel and vegetables, as discussed in the judgment by my learned brother A. S. Bains, J., but it appears to me that this principle of interpretation cannot be applied to the term 'textile'. I, therefore, find myself in agreement with the view of the Madras High Court in State of Madras v. T. T. Gopalier [1968] 21 S.T.C. 451 and Deputy Commissioner of Commercial Taxes v. Madurai Printing Tape Factory [1971] 28 S.T.C. 431. If one asks for cloth-suitings, shirtings, saris, etc., one does not say that he wants textile. The fact that this term includes a very vast variety of articles needs no emphasis. Further, the fact that the legislature excluded carpets, druggets, woollen durees, cotton floor durees and pure silk fabrics from the exemption contained in item 30 of Schedule B goes a long way to show that the said excluded items fell within the ambit of the term 'textile'. Now, if anybody wants any of the excluded items, carpets, druggets, etc., would he ask for a 'textile'. In the nature of things, there is no escape but to fall back on the dictionary meaning of the word 'textile'. The judgment of my learned brother contains the dictionary meaning of this term. For the purpose of understanding the meaning to be given to 'textile' in item 30 of Schedule B of the Act, what is required is that an article must be woven or spun from cotton, wool and silk. In view of the abovesaid manner in which the 'dryer felts' are manufactured, they can safely be said to be a variety of textile.

24. Before proceeding further it may be clarified that cotton or woollen 'dryer felt' is a trade name given to this variety of textile. It seems that the trade name has relevance to the use to which the 'dryer felt' is put in the manufacture of paper. It need hardly be said that the trade name given to the product in question has not been shown to mean anything in common parlance so as to exclude it from the term 'textile'.

25. Learned counsel for the petitioner vehemently urged that the wording of item 30 of Schedule B of the Act (reproduced in the judgment of my learned brother) was very comprehensive inasmuch as it excluded from taxation all varieties of cotton, woollen or silken textiles including rayon, artificial silk or nylon. Even with regard to the mode of manufacture, the item has a very wide sweep by indicating that the manufacture may be by handloom or powerloom or otherwise. The use to which the textile is put, was contended to have no relevance, because the exclusion from the ambit of item 30 is by specification of the articles and not by the use to which they are put.

26. So far as the use of textile by a common man is concerned, in my opinion, the vast variety of it is beyond his reach, for example, all expensive suitings, shirtings, saris, fine cloth, etc., which are doubtless textiles. What is left for the common man is by and large coarse cloth, both woollen and cotton.

27. In the result, it appears to me that the 'dryer felts' in question are textiles under item 30 of Schedule B of the Act and, consequently, exempt from sales tax.

S.C. Mittal andA.S. Bains, JJ.

28. In view of the difference of opinion, the case may be laid before my Lord, the Chief Justice, for appropriate orders.

29. In pursuance of the above order, the case came on for hearing before O. Chinnappa Reddy, J. and the learned Judge delivered the following judgment on 11th May, 1977.

O. Chinnappa Reddy, J.

30. This sales tax reference has been placed before me on a difference of opinion between S. C. Mittal and A. S. Bains, JJ. The question for consideration is, whether cotton/woollen dryer felts fall within item 30 of Schedule B of the Punjab General Sales Tax Act and their sale is, therefore, exempt from the levy of sales tax. Item 30 of Schedule B of the Punjab General Sales Tax Act is as follows :

Item 30 of Schedule B.-All varieties of cotton, woollen or silken textiles, including rayon, artificial silk or nylon, whether manufactured by handloom or powerloom or otherwise but not including pure silk fabrics, carpets, druggets, woollen durees and cotton floor durees.

31. Cotton/woollen felts are used in the manufacture of paper. The process of manufacturing dryer felts is described by Bains, J., as follows: '...the basic material used in the manufacture of cotton dryer felts is a blend of cotton and synthetic yarn normally with a minimum of four-folds which is wound together four-eight fold into a composite thread which in turn is woven into the final product which is known as a cotton dryer felt; and the basic raw material used in the manufacture of woollen felts is all-wool fibre or wool fibre mixed with a varying percentage of synthetic fibre. The fibre is first oiled and carded on to the condenser rollers and then spun into yarn. The resultant yarn is then wound on to the suitable packages for the continuation of the subsequent process of weaving it which converts the yarn into felt.' As already said, the cotton/woollen dryer felts are used in the manufacture of paper. They are specially made for paper manufacturers according to specification and supplied direct to paper manufacturers. They are not goods which can be obtained in the market for the asking.

32. The learned counsel for the assessee argued that weaving is of the essence of a 'textile' and any woven material answers the description of textiles. He urged that if that test is applied, cotton/woollen dryer felts are 'textiles'. He invited my attention to the meaning given to the word 'textile' in various dictionaries. He also drew my attention to the entries in the Customs Tariff Act in Section XI dealing with 'textiles and textile articles', which suggest that for the purposes of the Act, among other things, woven textile felts are treated as textiles and textile material. He further drew my attention to the entries in 'Brussels Nomenclature', which show that felts and felted fabrics used in machinery or plant are considered as textile articles.

33. It is true that the entries in the Customs Tariff Act and Brussels Nomenclature suggest that felts used in machinery and plant are treated as textiles for the purposes of the levy of customs duty and additional excise duty. But it is a well-known rule of construction that in construing a word in an Act, caution is necessary in adopting the meaning ascribed to the word in other Acts. (Craies on Statute Law, Seventh Edition, page 164).

34. In Macbeth v. Chislett [1910] A.C. 220, it was observed by the House of Lords as follows :

It would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone.

35. Nor do I think that I would be justified in giving to a word of common parlance like 'textiles' a pedantic meaning based on meanings given in dictionaries. A word of common usage like 'textiles' must be construed as it is understood in common language.

36. The test of construction in the popular sense of words of ordinary use was adopted by the Supreme Court of India in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer A.I.R. 1961 S.C. 1325, where the question arose whether betel leaves were vegetables. The Supreme Court held that the word 'vegetables' as understood in common parlance denoted the class of vegetables which were grown in a kitchen garden or in a farm and were used for the table and did not include betel leaves. They observed :

Reliance was placed on the dictionary meaning of the word 'vegetable' as given in Shorter Oxford Dictionary, where the word is defined as 'of or pertaining to, comprised or consisting of, or derived, or obtained from plants or their parts'. But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being 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'. It is to be construed as understood in common language.

37. The same principle was reiterated by the Supreme Court in Motipur Zamindary Co. (P.) Ltd. v. State of Bihar [1962] 13 S.T.C. 1 (S.C.), where the question arose whether sugarcane fell within the term 'green vegetables'. The Bombay High Court had held that though the expression 'vegetables' did not include sugarcane in the popular sense, the natural meaning of the word 'vegetable' was wide enough to cover sugarcane. The Supreme Court reversed the decision of the Bombay High Court and held that the approach of the High Court was wrong. It was held that the expression 'vegetables' in its popular sense did not include sugarcane.

38. In Attorney-General v. Bailey (1847) 1 Ex. 281, the question was, whether 'sweet spirits of nitre' were 'spirits' within the meaning of the Excise Acts. The Exchequer Court said :

In the absence, therefore, of any suitable definition, we must assume that the word is used in the Excise Acts in the sense in which it is ordinarily understood ; and we do not think that, in common parlance, the word 'spirits' would be considered as comprehending a liquid like 'sweet spirits of nitre' which is itself a known article of commerce not ordinarily passing under the name of 'spirits'...is very true the case finds that 'spirits' enter very largely into the composition of sweet spirits of nitre, but so they do into the article called sal volatile and into most, if not into all kinds of varnish and so as to other fluids, which certainly no one, in common parlance, would speak of as 'spirits'. And we think that nothing can be taken to be 'spirits' within the meaning of 6 Geo. IV, c. 80, which does not come under the definition of an inflammable liquid produced by distillation, either pure or mixed only with ingredients which do not convert it into some article of commerce not known, in common parlance, under the genuine appellation of spirits.... If, therefore, sweet spirits of nitre be 'spirits' within the true intent and meaning of the Excise Acts, it can only be sold by a licensed dealer in beer and spirits and the same observation will apply to sal volatile, spirit varnish and many other articles of commerce of which spirits are a principal component part. All these matters are notoriously sold and indeed this case states that they are sold, not by licensed dealers in spirits, but by chemists, apothecaries and other; and we consider this to be a strong confirmation of the view of the case which treats them as something distinct from spirits, however largely spirits may enter into their composition.... Inasmuch, therefore, as sweet spirits of nitre is itself a well-known article of commerce, not commonly known under the name of 'spirits' and not adapted for ordinary use as an intoxicating beverage, we think it is not 'spirits' within the meaning of that word as used in the information and, consequently, there must be judgment for the defendant.

39. In Grenfell v. Commissioners of Inland Revenue (1876) 1 Ex. D. 242, Pollock, B., observed:

First, as to the construction of the Stamp Duty Act, I think that it was very properly urged by Mr. Gorst that this statute is not to be construed merely according to the strict technical meaning of the language contained in it, but that is to be construed in its popular sense, meaning, of course, by the words 'popular sense', that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it.

40. There is a very instructive case from Canada. In Planters Nut and Chocolate Co. v. King (1952) 1 D.L.R. 385, the Supreme Court of Canada had to consider the question whether sale of peanuts and cashewnuts was exempt from the levy of excise tax on the ground that they were 'fruits and vegetables'. The Supreme Court noticed that, from the botanical point of view peanuts and cashewnuts were 'vegetables and fruits'. The Supreme Court also noticed that the meaning given to the words 'vegetables and fruits' in various dictionaries also included nuts of any sorts. Nevertheless, they held that, for the purposes of the Excise Acts, peanuts and cashewnuts were not 'fruits and vegetables' since they were never understood in common language as 'fruits and vegetables'. The Supreme Court held that the words 'fruits and vegetables' should be given the meaning which they would have when used in the popular sense. They said :

A perusal of the consumption or sales tax sections of the Act (Part XIII) and of the list of exemptions set out in Schedule III is sufficient to indicate that Parliament, in enacting the sections and the schedules, was not using words which were applied to any particular science or art and that, therefore, the words are to be construed as they are understood in common language. To the words 'fruit' and 'vegetables', therefore, there must be given the meaning which they would have when used in the popular sense-that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. Now the statute affects nearly everyone, the producer or manufacturer, the importer, wholesaler and retailer and finally, the consumer who, in the last analysis, pays the tax. Parliament would not suppose in an Act of this character that manufacturers, producers, importers, consumers and others who would be affected by the Act, would be botanists. The object of the Excise Tax Act is to raise revenue and for this purpose to class substances according to the general usage and known denominations of trade. In my view, therefore, it is not the botanist's conception as to what constitutes a 'fruit or vegetable' which must govern the interpretation to be placed on the words, but rather what would ordinarily in matters of commerce in Canada be included therein. Botanically, oranges and lemons are berries, but otherwise no one would consider them as such.

I think it can be asserted that in Canada both the peanut and cashew-nut are considered by almost everyone (except possibly by botanists) as falling within the category of 'nuts'. Like other nuts, such as the walnut, hickory, pecan and almond, they have a pod or shell enclosed in which is the edible seed. They are bought, sold and used in the same manner and can be found in any of the numerous 'nut shops'....

It is equally clear to me that when in Canada the words 'fruit' and 'vegetables' are used, their obvious and popular meaning would not include 'nuts' of any sort, or the peanuts, salted peanuts or cashews sold by the defendant.

Counsel for the plaintiff suggested a test which I think apposite. Would a householder when asked to bring home fruits or vegetables for the evening meal bring home salted peanuts, cashewnuts or nuts of any sort The answer is obviously 'no'....

My finding must be that as products and as general commodities in the market, neither salted peanuts nor cashews, or nuts of any sort are generally denominated or known in Canada as either fruits or vegetables.

41. Now, the word 'textiles' is a word of ordinary and everyday use, used to denote certain common articles of merchandise. We are concerned with the use of the word in a statute affecting a wide range of the merchant and consumer-public. The word, therefore, should be construed according to popular usage, that is, in the sense in which the members of the general public in their ordinary day-to-day commerce understand it. While in its broadest dictionary sense it means every woven fabric, in the everyday parlance of the ordinary merchant and consumer-public, it means clothing, furnishing and the like. By clothing I mean cloth used to cover or clean the body such as shirting, suiting, towelling, etc. By 'furnishing' I mean cloth used in connection with covering and decorating walls and furniture such as curtains, carpets, bed-spreads, etc. It is in that sense, that is, in the sense of clothing, furnishings, etc., that the word 'textiles' must be understood when used in the Sales Tax Act. It cannot be interpreted to include material specially manufactured for industrial purposes. The ordinary merchant and consumer will never so understand it. I may also notice here that the use to which an article is put is relevant in determining the character of the article. Reference may usefully be made to the decision of the Supreme Court in State of Gujarat v. Prakash Trading Co. [1972] 30 S.T.C. 348 (S.C.). Thus, an expression generally used to describe a common article of merchandise and occurring in a statute of general application cannot be interpreted to include a generally unknown, uncommon article used for a wholly different purpose merely because both the uncommon and common articles are made alike. I am, therefore, of the view that cotton/woollen dryer felts used in the manufacture of paper are not included in the expression 'textiles' occurring in item 30 of Schedule B of the Punjab General Sales Tax Act. I agree with A. S. Bains, J., that the reference should be answered against the assessee and in favour of the revenue.

42. I do not think it is necessary to refer to the several cases cited at the Bar though I acknowledge that I have derived considerable assistance from them, particularly, State of Tamil Nadu v. East India Rubber Works. [1934] 33 S.T.C. 399.


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