P. D. DESAI J. - The Income-tax Appellate Tribunal has referred the following question of law for our opinion :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not entitled to deduction under section 80-I of the Income-tax Act, 1961, for straw-boards and kraft paper ?'
The assessment year involved in the reference is the assessment year 1971-72, the previous year being the calendar year 1970. The assessee, a public limited company, is engaged in the manufacture of straw-board and kraft paper. In the course of its assessment to income-tax in the previous assessment years, it claimed and was granted the benefit of deduction under s. 80-I of the I.T. Act, 1961 (hereinafter referred to as 'the Act'). However, in the assessment proceedings for the assessment year under consideration, the ITO took the view that the relief under s. 80-I was not admissible because the assessees undertaking which manufactured straw-board was not a 'priority industry' within the meaning of the said section inasmuch as straw-board was not comprehended within the meaning of the said section inasmuch as straw-board was not compredended within the meaning of the words 'paper and pulp'.
The assessee carried the matter in appeal. The AAC reversed the decision of the ITO and upheld the claim and granted the relief.
The matter was carried in further appeal before the Income-tax Appellate Tribunal at the instance of the Revenue. Before the Tribunal, the contention on behalf of the Revenue was : (i) that deduction under s. 80-I was admissible only in respect of profits and gains from a priority industry, (ii) that 'priority industry', as defined, meant, inter alia, manufacture or production of any one or more of the articles or things specified in the list in the Sixth Schedule, (iii) that the relevant item in the Sixth Schedule, namely, item 16, specified 'paper and pulp including newsprint' as the articles or things, and (iv) that straw-board, which is used for packing purposes, is not covered by the said item, even though like paper it is manufactured out of pulp. The assessee countered the submission of the Revenue principally relying upon the decision of the Punjab and Haryana High Court in CIT v. Straw-Board Mfg. Co. Ltd. , wherein, in the context of s. 80E and Sch. V, item 16, which are provisions in pari materia, it was held that straw-board was covered by the term 'paper and pulp' and that the manufacture of straw-board is a 'priority industry' for the purposes of the I.T. Act, 1961. The Tribunal differed from the view taken in CIT v. Straw-Board Mfg. Co. Ltd. , and it held : (1) that having regard to the dictionary meaning of the word 'paper', anything which was thin and flat and which was capable of being used for writing or for other purposes like enclosing parcels or covering room-walls would be comprehended within the meaning of the word 'paper', (2) that straw-board, which was not a think and flat sheet, cannot be termed as 'paper', and (3) that even applying the common parlance test, straw-board cannot be regarded as 'paper' because a 'person asking for paper would not normally be handed over a sheet of straw-board'. It appears that, before the Tribunal, the claim for deduction was sought to be sustained also on the ground that the assessee manufactured kraft paper. The Tribunal found that the assessee mainly manufactured straw-board and that the manufacture of kraft-paper did not, for the reasons given in the context of straw-board, justify the claim that the assessees undertaking was a priority industry. At the instance of the assessee, however, the Tribunal has stated a case in respect of the question set out at the commencement of the judgment.
We may first look at the relevant provisions of law governing the case in the light of the legislative history.
Section 80E was introduced by the Finance Act, 1966, with effect from April 1, 1966. The said section, in so far as sit is relevant for the purposes of the present case, provided, in substance, that in the case of a company whose total income includes any profits and gains attributable to the business of manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule, there shall be allowed a deduction from such profits and gains of an amount equal to 8% thereof, in computing the total income of a company. The Fifth Schedule gave a list of the articles and things and at item 16 thereof was included 'paper and pulp including newsprint'.
Section 80E was deleted and, in its place, s. 80-I was introduced by the Finance (No. 2) Act, 1967, with effect from April 1, 1968. Sub-section (1) of s. 80-I is material for the purposes of this case and, when enacted, it read as follows :
'80-I. Deduction in respect of profits and gains from priority industries in the case of certain companies. -(1) In the case of a company to which this section applies, where the gross total income includes any profits and gains attributable to any priority industry, there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such profits and gains of an amount equal to eight per cent. thereof, in computing the total income of the company.'
To complete the legislative history, though we are not concerned with the subsequent changes, it might be stated that in the above subsection, the words 'five per cent.' were submitted for the words 'eight per cent.' by the Finance (No. 2) Act, 1971, with effect from April 1, 1972. Section 80-I itself came to be deleted by the Finance Act, 1972, with effect from April 1, 1973.
Section 80-I used the words 'priority industry' and those words defined in cl. (7) of s. 80B.
At the material time, the definition read as follows :
'(7) Priority industry means the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Sixth Schedule or the business of any hotel where such business is carried on by an Indian company and the hotel is for the time being approved in this behalf by the Central Government.'
At item 16 in the Sixth Schedule, 'paper and pulp including newsprint' were the articles or things specified in the list.
It would thus appear that both under s. 80E as well as under s. 80-I while computing the total income, the benefit of deduction to a certain extent was allowed from profits and gains attributable to an industry producing or manufacturing an article or thing described in the relevant Schedule.
The question against the aforesaid background is whether straw-board and kraft paper are articles or things covered by item 16 which mentions 'Paper and pulp including newsprint'. To be more precise, the question is whether straw-board and kraft paper are 'paper' within the meaning of the said item.
So far as straw-board is concerned, the question directly arose in CIT v. Straw-Board Mfg. Co. Ltd. . The assessee there was manufacturing straw-board. It claimed, inter alia, the benefit of deduction under s. 80E. The claim was based on the ground that straw-board was 'paper' within the meaning of item 16 of the Fifth Schedule. Since the word 'paper' was not defined, the common parlance test enunciated in Ramavatar Budhaiprasad v. Asst. STO : 1SCR279 was applied and it was found that the word 'paper' includes straw-board as understood by persons who were conversant with dealings in such goods. In reaching the aforesaid conclusion, reliance was placed upon : (1) the licence issued to the assessee which mentioned that the industrial undertaking of the assessee was registered in terms of s. 10 of the Industries (Development and Regulation) Act, 1951, (2) the details given in the licence mentioned as follows :
'Schedule Industry (21) including newsprint, paper-board and straw-board.'
(3) the process of manufacture of straw-board which was identical to that of manufacture of paper, (4) the handling of the applications for import licences for machinery and other accessories of straw or card-board mills through the Pulp and paper Directorate, (5) the inclusion of straw-board under the heading 'Paper and pulp including paper products' in item 24 of the First Schedule of the Industries (Development and Regulation) Act, 1951, and (6) the use of straw-board as a packing material. It was held that even if two interpretations were possible, one in favour of the Revenue and the other in favour of the assessee, the interpretation which was favourable to the subject was required to be adopted and that, accordingly, the interpretation which supported the assessee and which required straw-board to be treated as 'paper' had to be accepted.
The above decision in CIT v. Straw-Board Mfg. Co. Ltd. , which was considered the matter from different angles and which has given plausible reasons, is on all fours (with the present case). The decision is based upon statutory provisions in pari materia. Indeed, s. 80E was the precursor of s. 80-I and, so far as the point under consideration is concerned, the language was identical. The Tribunal, with respect, erred in dissenting from the judgment and in taking a contrary view, so far as straw-board is concerned. The Tribunal, as would appear from the summary of its reasoning set out above, has not acted upon any precise material placed before it in order to reach a contrary conclusion. The Tribunal primarily acted upon the dictionary meaning of the word 'paper' which defines the said word as a substance which is 'thin and flat' and on that basis it held that straw-board, which did not have the appearance of a thin and flat sheet, was not comprehended within the meaning of the word 'paper'. We are afraid, this is not the common parlance test, as explained in the decision in Ramavatar Budhaiprasad : 1SCR279 . As explained in the said decision, the words used in a taxing statute, which are not defined, have to be construed in their popular sense, meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to them. Such a meaning cannot ordinarily be found by reference to dictionaries and such an exercise is certainly not permissible when in a judicial pronouncement it is found that a certain term is included in an article or thing as understood by persons who are conversant with dealings in such goods. True it is that the Tribunal has further found that a person asking for paper would not normally be handed over a sheet of straw-board and that, therefore, the common parlance test was not satisfied. We are afraid, however, the Tribunal has taken a pedestrian and literal view of the 'popular sense' test and it should not have arrived at the decision that it reached, unless there was material before it in the shape of plausible evidence showing that the word 'paper' would not include 'straw-board' as understood by persons who are conversant with dealings in such goods, especially having regard to the clear pronouncement in CIT v. Straw-Board Mfg. Co. . This much for the approach of the Tribunal which, in our opinion, vitiates its decision.
The decision in CIT v. Straw-Board Mfg. Co. Ltd. has a persuasive value, so far as this court is concerned. It is not a binding judicial pronouncement or precedent. It is open to us to dissent from the decision if we find that its reasoning or the material part thereof is not convincing. The question, however, is whether we should look at the matter as if it has fallen for decision for the first time and and proceed to ascertain the true meaning of the word 'paper' occurring in item 16 of the Sixth Schedule and merely because another view can possibly be taken, we should readily dissent from the decision. Two considerations are relevant while examining the question. First, it is a settled legal position that if two interpretations of a taxing provision are possible, the interpretation which is favourable to the assessee should be accepted and that which is favourable to the Revenue should be discarded. In the instant case, since one High Court has taken a possible view which is favourable to the assessee, even if another possible view favourable to the Revenue can be adopted, such futile exercise may be avoided, for, ultimately, the view in favour of the assessee might have to be taken. Secondly, in income-tax matters, which are governed by an all-India statute, when there is a decision of another High Court on the interpretation of a statutory provision, it would be a wise judicial policy and practice not to take a different view (whatever ones own view may be), barring, of course, certain exceptions, like where the decision is sub silentio, per incuriam, obiter dicta or based on a concession or takes a view which it is impossible to arrive at or there is another view in the field or there is a subsequent amendment of the statute or reversal or implied overruling of the decision by a higher court or some such or similar infirmity is manifestly perceivable in the decision. Such practice or policy is followed in income-tax matters by the Bombay High Court since a long time, as is evident from the decisions in Maneklal Chunilal & Sons Ltd. v. CIT : 24ITR375(Bom) and CIT v. Chimanlal J. Dalal & Co. : 57ITR285(Bom) . This High Court is an offspring of the Bombay High Court and there is nothing to show that the policy or practice followed in the Bombay High Court has been consciously departed from by this High Court and there is nothing to show that the policy or practice followed in the Bombay High Court has been consciously departed from by this High Court. On the contrary, in CIT v. Garden Silk Weaving Factory : 101ITR658(Guj) , while dealing with an argument to the effect that there being a decision of the Bombay High Court, on the point, there, under consideration, the view expressed in the said decision should be accepted, even if it does not appeal to the court, on the principle of comity of judicial decisions and in the interest of the assessees of the two adjoining States, it was observed by a Division Bench of this court that it would have been inclined to accept the submission provided there were no other views in the filed. In that case it was found that two other High Courts had taken the view other than that which was preferred by the Bombay High Court and that, under those circumstances, it was not incumbent on its to accept the view of the Bombay High Court. Similar view is expressed in another Division Bench decision of this court in J. D. Patel v. Union of India  16 GLR 1083. It was a case which had arisen under the Central Excises and Salt Act, 1944. It was a case which had arisen under the Central Excises and Salt Act, 1944. Reference was made in the said decision to the decisions of the Bombay High Court in Maneklal Chunilal & Sons : 24ITR375(Bom) and Chimanlal J. Dalal & Co. : 57ITR285(Bom) and it was held that on the salutary principle which the Bombay High Court had followed since loan and which had been affirmed in a number of tax matters, in a case where there is only one interpretation enunciated by a High Court in respect of a provision of a taxing statute, another High Court must ordinarily accept that view of the interpretation of a section or provision of a taxing statute which is an all India statute, as a matter of practice and policy. The Division Bench observed, in terms, that it was in respectful agreement with this salutary practice and policy in the interest of uniformity and consistency in matters of application of a taxing statute, so as to avoid the challenged of discrimination in the application and administration of tax matters. It would thus appear that it has been the consistent practice and policy of the Bombay High Court followed by this High Court that except in exceptional cases, such as those referred to earlier, if one High Court has interpreted the provision or section of a taxing statute, which is an all India statute, and there is no other view in the field, this High Court should ordinarily accept that view in the interest of comity of judicial decisions and consistency in matters of application of a taxing statute. Following the said practice and policy, we would hold, along with the Punjab and Haryana High Court, that straw-board is covered by the term 'paper' occurring in item 16 of the Sixth Schedule and that, therefore, the assessee is entitled to the benefit of deduction under s. 80-I. Strong reliance was, however, placed on behalf of the Revenue on two decisions of the Supreme Court, one in the context of a taxing statute and the other in the context of the essential commodities legislation, and it was urged that those decisions had the effect of impliedly overruling the decision in CIT v. Straw-Board Mfg. Co. Ltd. and that, therefore, we would not be justified in taking the same view as in that case.
In State of Uttar Pradesh v. Kores (India) Ltd. : 1SCR837 one of the questions was whether carbon paper was paper falling within the purview of the word 'paper' as used in the notification issued by the Governor of Uttar Pradesh under the U.P. Sales Tax Act, 1948. The Supreme Court considered the various meanings of the word 'paper' in order to arrive at the popular or commercial meaning and held that it was clear that, in popular parlance, the word 'paper' was understood as meaning a substance which is used for writing or printing or for packing or for drawing on, or for decorating or covering the walls. It was held that the mere fact that the word 'paper' forms part of the denomination of a specialised article is not decisive of the question whether the article is paper as generally understood. The word 'paper' in common parlance or in the commercial sense means paper which is used for printing, writing or packing purposes. We are unable to appreciate as to how this decision helps the Revenue. The Supreme Court was there concerned with carbon paper and it was held that carbon paper, although the word 'paper' formed part of its denomination, was not 'paper' within the meaning of the notification of the aforesaid purposes and that its only use was for making replicas or carbon copies. It is not in dispute - indeed it was conceded on behalf of the Revenue before the Tribunal - that straw-board is used for packing purposes. It would thus appear that straw-board is an article which is put to one of the uses for which 'paper' is ordinarily employed. The user test employed by the Supreme Court in Kores (India Ltd).  39 STC 8 is, therefore, satisfied.
In Maharaja Book Depot v. State of Gujarat : 1978CriLJ1859 , the question was whether exercise books were covered by the item 'paper' occurring in s. 2(a)(vii) of the Essential Commodities Act, 1955 (hereinafter referred to as 'the Commodities Act'), as also in entry 13 of Sch. I to the Gujarat Essential Articles Dealers (Regulation) Order, 1971 (hereinafter referred to as 'the Regulation Order'). The Commodities Act and the Regulation Order enlisted items which were regarded as essential commodities or essential articles, as the case may be, and 'paper' was one of such commodities or articles. Both the Commodities Act and the Regulation Order contained an identical description of 'paper' in the following words :
'Paper, including newsprint, paper-board and straw-board.'
Exercise books or exercise note-books were not specifically covered at the material time in the description. The argument, inter alia, was that they should not be treated as covered within the meaning of the word 'paper', especially when there was an inclusive definition which included only newsprint, paper-board and straw-board but not exercise books or exercise note-books. While dealing with this contention, it was observed that when construing the word 'paper' occurring in the Commodities Act and the Regulation Order, the object or purpose of the Commodities Act and the Regulation Order as well as the manner in which 'essential commodity' or 'essential article' had been defined therein would have considerable bearing. It was further observed that the object or purpose of both the pieces of legislation was to control the production, supply and distribution of essential commodities or essential articles with a view to to ensuring that the common man got them at fair prices without any let or hindrance on the part of the trade and that it was with that object that the item 'paper' had been enlisted as an essential commodity or essential article in the Commodities Act and the Regulation Order. It was next observed that the scheme of both the legislations was to enumerate or enlist the items under broad general heads and that some of the items were stated to include certain thins 'which may not in ordinary parlance fall within the broad general head'. The dictionary meaning of the word 'paper' was next considered and it was held that it was difficult to accept the contention that an exercise book was a distinct commodity other than paper. The circumstances that the relevant item contained an inclusive description of the word 'paper' was next referred to and it was observed in that context as follows (p. 184) :
'... but if the inclusive part is carefully scrutinised it will appear clear that the things mentioned in the inclusive part may not ordinarily be regarded as paper and, therefore, by the inclusive part an extended meaning or description is given to the expression paper.'
In fine, it was observed that on a true and proper construction, within its normal dictionary meaning, the word 'paper' comprehended an exercise book and that such a construction was in consonance with and would carry out effectively the object and purpose of the Commodities Act and the Regulation Order.
The Revenue strongly relies upon the observations in the above decision to the effect that the inclusive part of the description of the word 'paper' in the Commodities Act and the Regulation Order contained things which may not ordinarily be regarded as 'paper' and that since straw-board was one of the articles contained in the inclusive part, the 'common parlance' test must be held to have not been satisfied qua the said articles. Though a cursory reading of the material part of the decision might create such an impression, closer analysis would reveal that there is no justification for such a view.
It must be remembered, in the first place, that the question which directly arose in that case was not whether straw-board would be regarded as 'paper' by people conversant with the subject-matter, but whether exercise books were 'paper'. In the next place, the decision was not rendered in the context of a taxing statute but in regard to an item enlisted in the Commodities Act and a statutory order promulgated thereunder, which called for a purposive interpretation. The principle of construction which was invoked for interpreting the word 'paper' was not the one which is relevant in the context of a taxing statute, namely, the common parlance test, but the rule that the meaning of a word was to be found bearing in mind the object or purpose of the Act. This is clear not only from the observations made in para. 6 of the judgment but also from a later decision in Hindustan Aluminium Corporation Ltd. v. State of U.P. : 1983(13)ELT1656(SC) , wherein, while making a reference to this decision, it was observed that that construction was accepted which would be in consonance with and would carry out effectively the object or purpose of the Act. In the last place, the connotation of the word 'paper' was ascertained by reference to dictionaries and the question whether an exercise book was 'paper' was resolved on the basis that an exercise book is covered within the normal dictionary meaning of the word 'paper'. The observation that the things mentioned in the inclusive part may not ordinarily be regarded as 'paper' was not made upon the application of the test whether people conversant with the subject-matter would regard them as 'paper' but on the basis of the etymological or literal meaning as ascertained by reference to dictionaries.
For the reasons aforesaid, we are of the view that the decision in Maharaja Book Depots case : 1978CriLJ1859 , cannot be pressed into service to urged that it impliedly overrules or affects the basis of the decision in Straw-Board Mfg. Co. Ltd.s case . In fact, the decision in Maharaja Book Depots case : 1978CriLJ1859 , shows that the word 'paper' calls for a comprehensive interpretation and that all articles and things which could reasonably fall within the scope of the said word should ordinarily be regarded as covered by the same. The very fact that the word 'paper' in the Commodities Act and the Regulation Order as also in the Sixth Schedule of the Act under consideration has been given an inclusive description shows that the meaning intended to be given was wide. Under the circumstances, the decision in Straw-Board Mfg. Co. Ltd.s case , which specifically deals with the aspect of inclusive description, must be regarded as having approached the matter from the correct interpretative angle.
For the foregoing reasons, we are of the opinion that the Tribunal erred in law in holding that straw-board was not included within the meaning of the word 'paper' occurring in item 16 of the Sixth Schedule.
The Tribunals decision on similar lines in regard to kraft paper is laconic. It has not found the material facts in order to apply the relevant test before arriving at the conclusion that kraft paper would not be covered within the meaning of the word 'paper'. Ordinarily, under those circumstances, it would not have possible to answer the question posed for our opinion, in so far as it relates to kraft paper, and we would have been required to leave it to the Tribunal to adjust its decision in the light of the observations made herein and the common parlance test enunciated in Ramavatar Budhaiprasads case : 1SCR279 , after finding the material facts. On behalf of the Revenue, however, it has been fairly stated that such an exercise may be avoided because if the court is inclined to take the view that straw-board is comprehended within the meaning of the word 'paper', then kraft paper, which is used for wrapping purposes, would certainly be covered by the word 'paper'. Under the circumstances, even as regards kraft paper, we are of the opinion that the view of the Tribunal was erroneous in law.
For the foregoing reasons, the question referred for our opinion is answered in the negative, that is to say, against the Revenue and in favour of the assessee, so far as both the articles, namely, straw-board and kraft paper, are concerned. The Commissioner will pay the costs of the reference to the assessee.