1. The question in this case is whether aluminium rods can be brought within entry 64 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. The case of the appellant before us is that they cannot be brought within that entry. The reason why he puts forward this contention is that goods falling within that entry are liable to sales tax at the point of first sale in the State at the rate of 6 per cent on the turnover. Rods sold by the assessee are at the point of first sale in the State. If the contention of the assessee is accepted, they will be liable to tax only at the rate of 3.5 per cent or 4 per cent, as the case may be, for two different periods during the concerned assessment year 1974-75.
2. The assessing authority considered that aluminium rods must be considered to fall within entry 64. The Appellate Assistant Commissioner took a different view holding that the rods fall completely outside the scope of that entry. The Board of Revenue set aside the decision of the Appellate Assistant Commissioner in suo motu proceedings in revision. According to the Board, aluminium rods must fall under entry 64. The question for our consideration is, which view of the nature of the aluminium rods is correct.
3. Entry 64, as in force during the concerned assessment year 1974-75, read as under :
'64(i) ingots, (ii) bars, (iii) blocks, (iv) slabs, (v) billets, (vi) shots, (vii) pellets, (viii) plates, (ix) sheets, (x) circles and (xi) strips of aluminium, pure or alloy.'
4. According to the Board of Revenue, the aluminium rods would come in either under the description of 'bars' or under the description of 'ingots'. We have no doubt whatever that a rod can hardly be brought within the description of an ingot. An ingot is a raw material used in the manufacture of finished or semi-finished goods, whatever metal the ingot is made up of. Even rods or bars may be employed as raw material for other manufactured articles, but they are not to be classed as ingots. The range of argument before us, however, was not whether an aluminium rod can be regarded as an ingot, but whether it can be brought within the meaning of the expression 'aluminium bars'. In the course of argument at the Bar, references were made to the meaning set out in various dictionaries. We may observe that the meanings found in the dictionaries are by no means uniform. It may however, be stated that a rod is more or less commonly defined as a slender, straight round stick. Whereas, a bar is more or less regarded as a narrow four-sided block of metal or material as manufactured. In the course of argument, several illustrations from every day speech were also bandied about. As illustrating the meaning of the expression 'bar', the familiar expression 'bar soap' was mentioned, which is a term well-known both to shop-keepers and housewives. On the other extreme, the same expression 'bar' was found to have been used to denote appurtenances in the gymnasium, such as a parallel bar and a horizontal bar.
5. The dictionary meanings and illustrations from every day speech cannot, however, control the meaning of the expression used in the schedule to the Sales Tax Act. While the function of the schedule is to denote the precise commodities which are subject to single point levy, the enabling provision which brings to the fore the several items of the schedule is found in section 3(2) of the Act. Section 3(1) levies a general tax on the total turnover of a dealer in goods of several descriptions. Section 3(2) is by way of an exception to the general tax. It provides that notwithstanding anything contained in sub-section (1) in the case of goods mentioned in the First Schedule, the tax shall be payable by a dealer, at the rate and at the point specified in the said schedule on the turnover relating to such goods. The purport of this provision is that in order to come within the single point scheme of taxation, the goods must be goods 'mentioned' in the First Schedule. If the goods are not mentioned in the First Schedule, they are not eligible for the single point levy. The question, therefore, is whether aluminium rods can be regarded as goods 'mentioned' in entry 64 of the First Schedule. The schedule has been attached to the body of the Act by the legislature itself although power has been given to the State Government to make alterations and amendments therein after following a particular procedure. A reference to the various entries in the First Schedule to the Act would leave one with the impression that the schedule had been composed without particular regard for classification, analysis, definition or explanation. Nevertheless, it is the duty of a court of construction to find out if any particular kind of goods fall within or outside any given entry which may be the subject of discussion. There have been many occasions when the courts have been called upon to engage themselves in the task of construction of one or the other of the entries in the schedule. The Supreme Court has recently laid down what approach a court of construction has to pursue when a controversy is raised as to the scope of a particular entry, or as to whether any given type of commodities can or cannot be assigned to the given entry. In Annapurna Biscuit Mfg. Co. v. Commissioner of Sales Tax : 1SCR149 , the Supreme Court had occasion to deal with a notification issued by the Government of Uttar Pradesh under the U.P. Sales Tax Act, 1948, rendering cooked food liable for a concessional rate of assessment. The question before the Supreme Court was, whether biscuits can be brought within the description 'cooked food'. In the course of their decision, the Supreme Court chalked out the approach to such question in the following passage :
'The words used in a law imposing a tax should be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force. If an expression is capable of a wider meaning as well as a narrower meaning the question whether the wider or the narrower meaning should be given depends on the context and the background of the case.'
6. Our approach in this case must then be to find out how the expression 'rod' would be understood by those involved in transactions of the kind, which are within the chargeable provision of the sales tax legislation. That would include those who sell goods as articles of merchandise and those who buy goods either as consumers or as actual users of the goods for the purpose of their own trade or manufacture. In the metal trade, there must be a well-merited distinction between a 'bar' on the one hand, and a 'rod' on the other, since the trade is in the habit of referring to both the articles by different names in the ordinary course of business. The expression 'bar' may sometime denote long metal pieces, roundly shaped in cross section. The expression 'rod' may even include a bar, in common speech. But the question is, whether an aluminium rod can be equated, in any sense acceptable to the commercial community, as a bar. It seems to us that the expression 'bar' is more appropriately used to refer to long pieces of metal with sharply defined sides, which may yield a cross section of a square or a hexagon or other many sided shape. In contrast, a rod is always envisaged by people who buy or sell things in the shops as a long piece, which is round in cross section. As marketable commodities, therefore, there do exist two distinct descriptions : a 'bar' on the one hand, and a 'rod' on the other, even though they might be made of the same metal and might possibly be used in the manufacture of the same kind of articles.
7. Reference was made at the Bar to a subsequent development in the law by way of an amendment to entry 64. This was thought to have some significance in the present discussion, if not as an aid to construction of the entry. The amendment in question was made by the legislature by Tamil Nadu Act 34 of 1981. It introduced the expression 'rods and wire rods' as the twelfth and thirteenth sub-items of entry 64. This amendment indicates a line of thought of the legislature which seems to accord with the way in which we are inclined to construe the expression even without a reference to the subsequent legislation.
8. The learned Government Pleader, however, argued the position from a broader angle. His submission was not to pay excessive attention to the several sub-items set out in entry 64 but to regard item 64, in the gross, as referring to all articles made of aluminium, pure or alloy. His submission was that the sub-items could not be regarded as particularising the goods with reference to which the single point levy was applicable, but must be regarded only as samples of the general item which can be brought within the phrase 'aluminium, pure or alloy'. If this were the proper understanding of entry 64, as he submitted it was, then, according to him, it did not matter whether a substance is called a rod or a bar, because in either case it would fall within the generic term 'aluminium, pure or alloy'.
9. We do not find our way to agree with this broad-based approach to entry 64 for two reasons. In the first place, the construction put by the learned Government Pleader would render the specifications of sub-items (i) to (x), not to speak of the subsequent two sub-items recently superadded, as wholly otiose. Secondly, the expressions 'aluminium, pure or alloy' employed in the entry are not themselves goods, but indicate merely the substance of which the goods referred to in sub-items (i) to (x) are made. As pointed out earlier, section 3(2) proceeds on the footing that 'goods' must be 'mentioned' in the First Schedule in order to be brought within the single point levy. Hence, the argument of the learned Government Pleader ignoring the wide variety of aluminium articles and, particularly, the article of the description 'bar' and the omission of the article 'rod' is opposed to the very direction and purpose of section 3(2), besides putting a wrong construction of the entry itself. We must, therefore, reject the contention of the learned Government Pleader as wholly untenable.
10. For all the above reasons, we hold that the sales turnover of the assessee in aluminium rods does not fall within entry 64 of the First Schedule and hence sales of aluminium rods by the assessee must be properly brought to tax under section 3(1) of the Act. The Appellate Assistant Commissioner was right in taking this view of the nature of the commodity and the appropriateness of the charge under section 3(1) of the Act. The Board's order to the contrary is not in accordance with law.
11. In the result, this appeal succeeds; the Board's order is set aside and the order of the Appellate Assistant Commissioner is restored. The assessee is entitled to his costs. Counsel's fee Rs. 250.
12. Appeal allowed.