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Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) Vs. G.S. Pai and Company - Court Judgment

LegalCrystal Citation
Overruled ByDeputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam Vs. G.S. Pai & Co Dated:15.10.1979
SubjectSales Tax
CourtKerala High Court
Decided On
Case NumberT.R.C. No. 63 of 1976
Judge
Reported in[1978]41STC440(Ker)
AppellantDeputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes)
RespondentG.S. Pai and Company
Advocates:Government Pleader
DispositionPetition dismissed
Cases ReferredIndore v. Jaswant Singh Charan Singh
Excerpt:
- - 483 was whether gold mixed or allied with a metal like copper and then melted for being made into various articles for use can be regarded as 'bullion or specie' or whether, in such circumstances, it would cease to be gold as known to the commercial world. 305. the division bench accepted the principle that while interpreting items in statutes like the sales tax acts, resort should be had not to the scientific or the technical meaning but to their popular meaning or the meaning attached to them by those dealing in them. the allahabad high court pointed out that in common parlance the term 'sanitary fittings' is used in respect of items like wash-basins, commodes, cistern tanks, urinals, etc. we affirm the judgment of the tribunal on this point as well......of argument was advanced before us by either counsel. decisions have expounded the meaning of the term 'sanitary fittings'. we wish to refer to a division bench ruling of this court in deputy commissioner of agricultural income-tax and sales tax, quilon v. kerala premo pipe factory ltd. [1974] 33 s.t.c. 305. the division bench accepted the principle that while interpreting items in statutes like the sales tax acts, resort should be had not to the scientific or the technical meaning but to their popular meaning or the meaning attached to them by those dealing in them. in other words, the terms should be understood in their commercial sense. reference was made to the decision of the allahabad high court in model sanitary house v. commissioner of sales tax [1970] 26 s.t.c. 82, which was.....
Judgment:
V.P. Gopalan Nambiyar, C.J.

1. This tax revision case is preferred by the State against the decision of the Sales Tax Appellate Tribunal, Trivandrum. The assessee is a dealer in jewellery and G.I. pipes at Ernakulam. The question that calls for determination is the appropriate mode and rate of assessment to sales tax. As far as the turnover from jewellery is concerned, the Tribunal took the view that it is liable to be assessed under entry 56 of Schedule I of the General Sales Tax Act, 1963, as 'bullion and specie' at 1 per cent. The State would contend that this is not assessable at this smaller rate under this specific entry, but should be assessed to multi-point tax under Section 5 of the Act. Similarly, in regard to G. I. pipes, the Tribunal took the view that they were not liable to be assessed under entry 26A of Schedule I of the General Sales Tax Act as 'water supply and sanitary fittings' at 7 per cent as the State would contend, but were liable to be assessed only at the lesser rate under the general scheme of taxation at multi-point under Section 5 of the Act. In regard to both the items the assessment was at rates favourable to the assessee and against the higher rate of taxation demanded by the revenue.

2. Both counsel for the assessee and for the revenue cited a number of decisions where the concept of 'bullion and specie' and also 'sanitary fittings', have been expounded. For instance, in regard to 'bullion and specie' the question considered in Sri Akhraj Parakh v. State of Andhra Pradesh [1960] 11 S.T.C. 483 was whether gold mixed or allied with a metal like copper and then melted for being made into various articles for use can be regarded as 'bullion or specie' or whether, in such circumstances, it would cease to be gold as known to the commercial world. The same was the position considered in Canara Jewellers v. Commercial Tax Officer, South Kanara [1962] 13 S.T.C. 668 and also in P.A.R. Viswanathan and Company v. State of Madras [1963] 14 S.T.C. 702. We do not think it necessary to get involved in the principle of these decisions or consider their applicability, having regard to the actual facts disclosed in this case. Those facts are that the assessee purchased old gold in the shape of ornaments or other articles, melted them and made them into fresh ornaments or other articles of gold. We think both in the dictionary sense and in the commercial sense, in such circumstances, the article dealt with and sold, remains as gold and, therefore, satisfies the concept of the term 'bullion' in entry 56 of Schedule I of the Sales Tax Act. We would affirm the judgment of the Tribunal on this part of the case on this short ground.

3. On the other point, in regard to the concept of the term 'water supply and sanitary fittings', a fair amount of argument was advanced before us by either counsel. Decisions have expounded the meaning of the term 'sanitary fittings'. We wish to refer to a Division Bench ruling of this Court in Deputy Commissioner of Agricultural Income-tax and Sales Tax, Quilon v. Kerala Premo Pipe Factory Ltd. [1974] 33 S.T.C. 305. The Division Bench accepted the principle that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning but to their popular meaning or the meaning attached to them by those dealing in them. In other words, the terms should be understood in their commercial sense. Reference was made to the decision of the Allahabad High Court in Model Sanitary House v. Commissioner of Sales Tax [1970] 26 S.T.C. 82, which was also relied on before us by counsel for the revenue. In that case, the Allahabad High Court had expounded the concept of the term 'sanitary fittings'. It stressed in particular that fittings are nothing but sanitary appliances and accessories which are fixed to the floor or to the walls of a building. Viewing the expressions in a commercial sense, the court had no difficulty in that case in holding that wash-basins, commodes, urinals, etc., would fall within the entry 'sanitary fittings' mentioned in the notification that the court was construing in that case. We are struck by the exposition by the court that the fittings must be things affixed to the floor or on the wall of a building. There is no evidence that the pipes in question satisfy this requirement. But counsel for the revenue invited our attention to the relevant entry and stated that, while the decisions concerned construed the expression 'sanitary fittings', they did not expound the meaning of the term 'water supply'. The two expressions are not to be understood disjunctively and, in the circumstances, we do not think we would be justified in completely divorcing the term 'water supply' from the meaning and the content of the expression 'sanitary fittings' as expounded by the Allahabad High Court.

4. Attention was called to the decision in Indian Hume Pipe Company Ltd. v. State of Uttar Pradesh [1972] 29 S.T.C. 487 at 493, which was confirmed by the Supreme Court in State of U.P. v. Indian Hume Pipe Co. Ltd. [1977] 39 S.T.C. 355 (S.C.). In that case, the Allahabad High Court noticed that the term 'sanitary fittings' had not been defined in the Act or the Rules and had to be understood in the popular and commercial sense. It noticed the decision of the Supreme Court in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh [1967] 19 S.T.C. 469 (S.C.), that the popular meaning of the term or the meaning attached by those dealing in the article had to be assigned to the term. The Allahabad High Court pointed out that in common parlance the term 'sanitary fittings' is used in respect of items like wash-basins, commodes, cistern tanks, urinals, etc. and other articles which are used commonly in bath rooms and lavatories. The decision noted that concrete pipes of certain specifications are used for drainage and sewage disposals, but it was pointed out that anything connected with sanitation cannot be brought within the term 'sanitary fittings'. We think that on the same principle and by the same considerations anything connected with water supply cannot be brought within the meaning of the relevant entry.

5. On the facts disclosed, we are not inclined to interfere with the Tribunal's finding that G. I. pipes are not liable to be assessed under entry 26A of Schedule I of the Act. We affirm the judgment of the Tribunal on this point as well.

In the result, we, dismiss this tax revision case but, in the circumstances, without costs.


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