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State of Gujarat Vs. Keshavlal and Sons - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtGujarat High Court
Decided On
Case NumberSales Tax Reference No. 11 of 1965
Judge
Reported in[1966]17STC170(Guj)
ActsBombay Sales Tax Act, 1959 - Sections 52
AppellantState of Gujarat
RespondentKeshavlal and Sons
Appellant Advocate A.D. Desai, Assistant Government Pleader and; M.G. Doshit, Additional Government Pleader
Respondent Advocate J.R. Nanavathy, Adv.
Cases Referred and Cape Brandy Syndicate v. Inland Revenue Commissioner
Excerpt:
.....wide as well as a narrow meaning and that since entry 20 was a taxing provision the meaning of the word 'articles' which was favourable to an assessee should be adopted. it is also difficult to understand the distinction sought to be made by the tribunal between articles on the one hand and utensils on the other on the ground that the word 'article' has both a wider a well as a narrower meaning. it is obvious that the words 'articles prepared from khadi' are used in this entry because otherwise articles other than garments would not have enjoyed the exemption. it appears that the words 'and utensils' in entry 2 in schedule a have been added for the latter purpose, namely, to clarify that utensils made of bell metal would also be included in the word 'articles' so that there would be no..........sales tax act, 1959. that entry, as it stood at the material time, read as follows :- 'stainless steel articles (other than those used as parts of industrial machinery or plant).' 2. the question arises out of an application made by the assessee-opponents to the deputy commissioner of sales tax under section 52 of the act by which the assessees desired to have determination on the question as to what would be the rate of tax on the sales of stainless steel utensils purchased from a dealer residing outside the state of gujarat. the contention of the assessees was that utensils made from stainless steel would not fall under entry 20 but would fall under the residuary entry 22 of schedule e to the act. the deputy commissioner held that such utensils would fall under entry 20 of schedule.....
Judgment:

Shelat, C.J.

1. The short question which arises in this reference is whether a sale of 'vatkas' (utensils) of stainless steel would be covered by entry 20 in Schedule E to the Bombay Sales Tax Act, 1959. That entry, as it stood at the material time, read as follows :-

'Stainless steel articles (other than those used as parts of industrial machinery or plant).'

2. The question arises out of an application made by the assessee-opponents to the Deputy Commissioner of Sales Tax under section 52 of the Act by which the assessees desired to have determination on the question as to what would be the rate of tax on the sales of stainless steel utensils purchased from a dealer residing outside the State of Gujarat. The contention of the assessees was that utensils made from stainless steel would not fall under entry 20 but would fall under the residuary entry 22 of Schedule E to the Act. The Deputy Commissioner held that such utensils would fall under entry 20 of Schedule E, observing that the word 'articles' occurring in what entry was sufficiently wide enough to include utensils manufactured out of stainless steel. He observed that the Legislature, no doubt, had used in entry 2 of Schedule A to the Act the words 'articles and utensils of kansa (bell metal)' but that it did so for the sake of clarity rather than for making distinction between articles on the one hand and utensils on the other. This view of the Deputy Commissioner was not shared by the Sales Tax Tribunal in the appeal filed by the assesees. The Tribunal, however, conceded that there was considerable force in the view taken by the Deputy Commissioner and that normally an article would mean a particular thing and utensils made from stainless steel would be articles of stainless steel an would not cease to be articles of stainless steel merely because they were designated as utensils in popular parlance. The Tribunal, however, observed that there was some scope for doubt whether the Legislature intended to give to the word 'articles' its wide connotation and whether it was intended to mean an article other than an utensil. Relying on entry 2 in Schedule A where, as aforesaid, the Legislature has used the words 'articles and utensils' the Tribunal felt that by adding the words 'and utensils' in that entry the Legislature evidently intended to exempt utensils of kansa, i.e., bell metal, from tax, but that the Legislature presumably must have felt that the word 'articles' might be construed in its narrower sense so as to exclude utensils. Consequently, its intention to exempt utensils made from bell metal might not be carried out and therefore added the words 'and utensils' in that entry. In that view, the Tribunal came to the conclusion that the word 'articles' would have both a wide as well as a narrow meaning and that since entry 20 was a taxing provision the meaning of the word 'articles' which was favourable to an assessee should be adopted. On that reasoning, the Tribunal set aside the order passed by the Deputy Commissioner and held that utensils made from stainless steel would not fall under entry 20 of Schedule E and there being no other entry therefor, they would fall under the residuary entry 22 of Schedule E.

3. According to Webster's and the Shorter Oxford Dictionaries, an 'article' means a particular commodity, a thing for sale and it also means a distinct part. An 'article' also means a component part, a distinct part or a portion. Mr. Nanavati for the assessees sought to construe the word 'articles' in entry 20 as meaning only a component part or a portion of a whole and argued that the word 'articles' must take colour from the subsequent words used in that entry namely, 'other than those used as parts of industrial machinery or plant.' He contended that reading the entry as a whole the word 'articles' used therein should be construed as a distinct part or a portion of a whole article and not an article which is whole in itself and therefore utensils made of stainless steel would not be covered by entry 20. In our view, it is not possible to accept such a construction. There is nothing in that entry to indicate that the Legislature intended to give to the word 'articles' the meaning which Mr. Nanavati seeks to attach to it, and equally there is no indication in that entry ton show that an article does not mean what its ordinary and dictionary meaning is, namely, a particular commodity or a thing for sale. It may be that the word 'article' may include not only a particular commodity but also a component part. But that would not mean the same thing which Mr. Nanavati contends for, namely, that the article that is spoken of in entry 20 must necessarily mean a component part and not a whole commodity or a whole thing. There can be no doubt that the word 'articles' is comprehensive enough to include things or commodities of domestic use, such as utensils, and, as is clear from the meanings given to that word in the dictionaries, it cannot be gainsaid that it would include utensils also. It is also difficult to understand the distinction sought to be made by the Tribunal between articles on the one hand and utensils on the other on the ground that the word 'article' has both a wider a well as a narrower meaning. There is no question of the word 'article' having acquired any popular meaning which gives it a narrower connotation either in commercial circles or in popular parlance so that it would be possible to say that the Legislature had used the word 'articles' in the meaning attached to it in popular parlance. In fact, the Legislature has used the word 'articles' in several other entries in different Schedules. In entry 40(b) of Schedule A, for instance, the words are 'silk khadi and ready-made garments and other articles prepared from khadi.' It is clear from this entry that the object of the Legislature was not only to exempt silk khadi and ready-made garments but also other articles prepared from khadi. It is obvious that the words 'articles prepared from khadi' are used in this entry because otherwise articles other than garments would not have enjoyed the exemption. There can be no doubt that the word 'articles' there has been used in its usual ordinary meaning. Similarly, entry 2 of Schedule E, as it stood at the material time, used the words 'articles made of gold and silver .....not containing precious stones, synthetic or artificial precious stones or pearls, whether real, artificial or cultured, of a value exceeding one-tenth of the value of each such article.' Again in entry 13 of the same Schedule, the words are 'articles made of ivory (other than those specified in entry 27 in Schedule A), sandalwood or blackwood or inlaid therewith and ornamental metalware (not being articles specified in entry 2 in this Schedule).' It would not be possible to say that the word 'articles' used in these entries does not mean all kinds of articles made of gold or silver in entry 2 and of ivory, sandalwood or blackwood in entry 13. They would include not only ornamental and decorative articles, but also things of domestic use. It would also not be possible to say that ornamental or religious figures, a frame or a piece of furniture made from sandalwood or blackwood would fall under the entry but not articles which would be used for domestic use, such as a silver vatka or a silver plate.

4. It is no doubt true that in entry 2 of Schedule A, the Legislature has added the words 'and utensils of kansa (bell metal)' after the word 'articles' so as to include utensils for exemption under that entry. But an inclusive definition is resorted to by the Legislature not only to give an artificial meaning to a word which it would not bear in its ordinary meaning but also to clarify its intention so that there would be no room for any doubt. It appears that the words 'and utensils' in entry 2 in Schedule A have been added for the latter purpose, namely, to clarify that utensils made of bell metal would also be included in the word 'articles' so that there would be no room for doubt for such utensils to enjoy the exemption under that entry. In entry 20 of Schedule E, as the Tribunal itself has remarked, stainless steel articles would normally include utensils, for it cannot be said that an utensil made of stainless steel is not an article made of stainless steel. Then the question is, is there any indication in that entry that utensils made from stainless steel were intended to be excluded therefrom The answer obviously must be in the negative because whatever the Legislature wanted to exclude from that entry has been excluded by it by making it clear that articles used as parts of industrial machinery or plant are not to fall under the entry. Therefore, if the word 'articles' ordinarily includes utensils and the Legislature has in clear terms excluded certain other things therefrom, it would not be permissible to exclude things not so excluded as well. It seems that to remove any possibility of such doubt, the Legislature has, by Gujarat Act XIII of 1964 amended this entry by substituting the words 'steel articles including utensils' for the original words 'steel articles'. As the amended entry now reads, there can be no doubt about the legislative intention to include utensils in the word 'articles'. It is a well-settled rule of construction that where it can be gathered from a later Act that the Legislature has attached a particular meaning to certain words in an earlier cognate one this would be taken as a legislative declaration of its meaning there. Subsequent legislation on the same subject where there is ambiguity may be looked into in order to see what is the proper construction to be put upon an earlier Act. (See Maxwell on Interpretation of Statutes, Eleventh Edition, 302, and Cape Brandy Syndicate v. Inland Revenue Commissioner ([1921] 2 K.B. 403, at 414). As already stated, the word 'steel articles' used in this entry before its amendment in 1964 included utensils in the plain meaning of that word. That being so, it cannot be said that the amendment in 1964 added utensils by including them in 'steel articles'. The amendment was made ex majore cautela to clarify and remove doubt, if any that utensils would be covered by the entry as it stood originally. In our view, if the word 'articles' has a comprehensive meaning so as to include utensils, it would not be possible to restrict its meaning by resorting to the words used in another entry in another Schedule, especially when those words in that Schedule have been used for the purpose of clarification.

5. That being so, we are of the opinion that the Deputy Commissioner was right when he came to the conclusion that utensils made from stainless steel where included in entry 20 of Schedule E, and the contrary conclusion arrived at by the Tribunal was not correct.

6. In the result, our answer to the question referred to us will be in the affirmative. The opponents will pay to the State of Gujarat the costs of this reference.

7. Reference answered in the affirmative.


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