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Deputy Commissioner of Sales Tax Vs. G. S. Pai and Co. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case Number TRC No. 63 of 1976
Reported in(1978)6CTR(Ker)119
AppellantDeputy Commissioner of Sales Tax
RespondentG. S. Pai and Co.
Cases ReferredModern Sanitary House vs. Commr. of Sales
Excerpt:
.....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 commissioner of agricultural income-tax and sales-tax, quilon vs. kerala premo pipe factory ltd. 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 modern sanitary house vs. commr. of sales-tax, which was also relied on before us by the counsel for the revenue. in that case the allahabad.....
Judgment:

Gopalan Nambiyar, C.J. - 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%. 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 S. 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% 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 S. 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 vs. The State of Andhra Pradesh 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 and Other vs. Commercial Tax Officer, South Kanara and also in P.A.R. Viswanathan & Company vs. The State of Madras. 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 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 Commissioner of Agricultural Income-tax and Sales-tax, Quilon vs. Kerala Premo Pipe Factory Ltd. 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 Modern Sanitary House vs. Commr. of Sales-tax, which was also relied on before us by the 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 the buildings. There is no evidence that the pipes in question satisfy this requirement. But Counsel for then 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 no 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. vs. was confirmed by the Supreme Court in (39) STC 355. 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 Commr. of Sales-tax, Madhya Pradesh, Indore vs. M/s. Jawant Singh Charan Sigh, 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 lavartories. 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 the 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 Tribunals finding that G.I. Pipes are not liable to be assessed under Entry 26A 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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