1. The petitioner before us is a dealer in raw hides and skins, tanning barks, myrobalams and other articles in Dindigul. During 1959-60, he showed a turnover of Rs. 2,45,878 and odd relating to myrobalam. The sales fell before 1st October, 1960. During the period prior to that date, which includes the period of assessment, the provision for single point levy in item 59 of the First Schedule of Madras Act I of 1959, read thus:
Wattle bark including dyeing and tanning materials-at the point of last purchase in the State-at 3 per cent.
2. After 1 st October, 1960, this item was amended as:
Wattle bark, avaram bark, konnam bark, wattle extract, quobracho and chestnut extract-at the point of last purchase in the State-at 1 per cent.
3. It is common ground that the assessee sold the above quantity of myrobalam to tanners in the State. The view of the department was that since myrobalam could also be used for medicinal purposes and also for making of ink, it could not come under the aforesaid description for single point levy, as it was before 1st October, 1960. The Tribunal, to whom the assessee appealed, was also of the same view. It also said that the subsequent amendment of item 59 of the First Schedule could be utilised to interpret the earlier provision, and, so interpreted, myrobalams would not be a tanning material. Therefore the prayer of the assessee for excluding it from his assessable turnover was rejected. He has come before us in revision.
4. A reference to the Shorter Oxford Dictionary shows that myro-balam is described as a substance used formerly in medicines, but is now used chiefly in tanning, dyeing, and ink making. Learned counsel for the assessee has also produced a copy of a book issued by the Central Leather Research Institute, Madras, in 1959 as the report of a symposium on tanning as a small scale and cottage industry. At page 78 of this book there is a remark that although quite a number of tanning materials are available in India, the most suitable for the tanning of sheep-skin pelts are avaram bark, babul bark and myrobalams. The process by which myrobalams could be used effectively for tanning ,is summarised in page 95 of the above book.
5. Our attention was drawn to the decision of the Allahabad High Court in Bishambar Dayal Shri Niwas v. Commissioner of Sales Tax 14 S.T.C. 184, where the question arose as to in which of two different categories in the Schedule to the U. P. Sales Tax Act, namely (1) dyes and colours and the compositions thereof or (2) chemicals of all kinds, the commodity sold by the assessee, namely zinc oxide and red lead, would fall. The view of the Allahabad High Court was that if an article was capable of being used as a chemical and also as a colour, the answer to the question what he sold, would depend upon how it was treated by the vendor. If he stocked and sold it as a chemical, it would be a chemical sold by him and more so if it was bought by the vendee also as such. In the present case there is no doubt that tanning is one of the chief uses of myrobalam, and that the seller as well as the buyer treated it as such. Seeing that nearly 2 lakhs worth of the stuff were sold in one year, it could not certainly be for medicinal purposes because it is well known that it is used only in small quantities in the preparation of Ayurvedic medicines; nor is it suggested that any of the buyers in this case are manufacturers of ink -an alternative use for myrobalam. The buyers are admittedly tanners.
6. Secondly, the principle of using a latter enactment for clarifying the terms in an earlier enactment adverted to by the Tribunal was considered in a decision of the Andhra High Court reported in Narasimha Reddy v. State of Andhra Pradesh 2 AW.R.261. The Andhra High Court quoted a decision of the English High Court in Cape Brandy Syndicate v. Inland Revenue Commissioners 2 K.B. 414. A clear restriction in regard to the use of this principle as a principle of construction was recognised in that decision, viz., that it can be used only where the earlier Act is ambiguous Or if it is susceptible of two meanings. But in the present case, the earlier description in item 59 took into its compass not merely wattle bark but all dyeing and tanning materials.There may bemany commodities which can be used for more than one purpose. When a commodity is described in the.Schedule with reference to the purpose for which it is used, the proper way of interpretation would be to consider first whether that purpose is one of its chief uses, and, secondly, whether the principle laid down by the Allahabad High Court of the intention between the buyer and seller in regard to its use can be taken into account for deciding whether it will fall into one particular. category 'or not. The interpretation which the department seeks to place upon the word is that the commodity should be susceptible of use exclusively for tanning. But, in view of the general way in which the description was given, namely, 'dyeing and tanning materials', in item 59 .before' its amendment, we cannot read into it the meaning that only commodities used exclusively for dyeing and tanning were included in that description. The Legislature, after the amendment on 1st October, 1960, has restricted the term to certain specified commodities used exclusively for dyeing and tanning. But it cannot be held by retrospective operation of the amendment that such an intention was implicit in the earlier enactment, especially when the terms of earlier enactment can be interpreted without any ambiguity, in the light of the principles stated above. We are therefore of the opinion that this is a case where the sales of myrobalam bark to tanners should be assessed at single point as tanning material.
7. We therefore allow the revision case and set aside the assessment on the disputed turnover.There will be no order as to costs.