Collector Of Electricity Duty And 1 Other(S) vs B S Patel And Company And 4 Other(S)

The present appeal is filed under Clause 15 of the Letters Patent against the judgment and order dated 10.1.2013 passed by the learned Single

Judge of this Court in Special Civil Application no.4277 of 1986.

The parties in this appeal are mentioned as per their original position in the petition.

Following facts emerge from the record of the appeal:Â​

3.1 The petitioners are traders and manufactures of Dhanadal and are consumers of low tension electricity supply from Ahmedabad Electricity

Company. It is the say of the petitioners that as per the provisions of the Bombay Electricity Duty Act, 1958 (hereinafter referred to as “the Actâ€

for the sake of brevity), the petitioners are liable to electricity duty to the tune of 10% as provided in ScheduleÂ1 PartÂI. Entry no.5(b) reads as

under:Â​

“(5) ...

(a) ...

(b) where an industrial undertaking consumes exclusively low tension energy 10 per cent of consumption charges.â€​

3.2 The Collector of Electricity Duty, Ahmedabad effected recoveries from 11.10.1983 from the petitioners based upon the fact that the electricity

duty is leviable upon the petitioners as per Entry no.4(a) of ScheduleÂ1 PartÂ1 instead of Entry no.5(b) of ScheduleÂ1 PartÂ1. The petitioners have

relied upon one of the communication addressed by Zaverchand Bhurabhai Shah dated 11.8.1985. As per the record, the petitioners filed a joint

representation disputing the liability to pay the duty at the rate of 35% that too, from 11.10.1983. A further representation was also filed through an

unregistered association known as Gujarat Dhanadal Manufacturers' Association. As averred in the petition, as no decision was rendered by the

Collector of Electricity Duty or the Government and simultaneously as the petitioners were asked to make payment of electricity duty at the rate of

35%, the petitioners approached this Court by way of filing a writ petition being Special Civil Application no.879 of 1986. On the ground of availability

of alternative remedy, the said writ petition was disposed of by this Court vide order dated 5.2.1986. As per the order passed by this Court, the

petitioners preferred an application before the Collector of Electricity Duty being an authority appointed under PartÂII of Schedule 1 on 10.2.1988.

The said application was decided by the Collector of Electricity Duty vide order dated 23.5.1986 and the Collector, while deciding the application,

further directed the petitioners to pay up the arrears of electricity duty recoverable, if any, within one week time as directed by this Court. The said

decision was challenged by the petitioners before the State of Gujarat by way of filing an appeal which was heard by the Deputy Secretary which

culminated into the order dated 11.8.1986 dismissing the said appeal. Both the orders were challenged before this Court by way of filing a writ petition

and the learned Single Judge, by the impugned judgment and order dated 10.1.2013, was pleased to allow the petition and the authorities have

preferred this appeal under Clause 15 of the Letters Patent.

Heard Mr. Tirthraj Pandya, learned Assistant Government Pleader for the appellant, Ms. Shivani Rajpurohit, learned advocate for respondents no.1

to 4 and Mr. Kaushik B. Pujara, learned advocate for respondent no.5.

Mr. Tirthraj Pandya, learned Assistant Government Pleader for the appellant has submitted as under:Â​

5.1 That, the learned Single Judge has wrongly come to the conclusion that Dhanadal is not an eatable item and therefore, the same is outside the

purview of Section 2(bb) of the Act.

5.2 It is contended that the learned Single Judge has committed an error in coming to the conclusion that the manufacturing units of the petitioners

were included in the definition of “industrial undertakingâ€​ as defined under Section 2(bb) of the Act as it stood then.

5.3 It is further contended that the learned Single Judge has wrongly come to the conclusion that Dhanadal which is used as Mukhvas is not eatable.

5.4 It is also contended that the learned Single Judge has failed to appreciate that Dhanadal is eatable and whether it is consumed as breakfast, lunch

or dinner is immaterial. Referring to the definition of the words “industrial undertaking†as defined under Section 2(bb) of the Act, it is contended

that the learned Single Judge has wrongly interpreted the said definition and even the definition clearly provides that “eatables and/or drinksâ€. The

aforesaid two items are specifically excluded by the legislature which is not noticed by the learned Single Judge and therefore, the impugned judgment

and order is an error exÂ​facie.

5.5 It is also contended that the learned Single Judge has erred in coming to the conclusion that Dhanadal does not result in manufacturing of eatables

and therefore, higher rate of duty is not justified. It is further contended that the learned Single Judge has thus misread the provisions of the Act and

the Schedule and has wrongly come to the conclusion that Dhanadal is not an eatable item and therefore, has wrongly come to the conclusion that the

petitioners' manufacturing unit which manufactures Dhanadal would be an industrial unit as defined under Section 2(bb) of the Act and therefore,

would fall within the ambit of Entry no.5, PartÂ1 ScheduleÂ1 instead of Entry no.4 as determined by the respondent â€" State. On the aforesaid

ground, it is therefore contended that the impugned judgment and order deserves to be quashed and set aside and the appeal may be allowed.

Per contra, Ms. Shivani Rajpurohit, learned advocate for respondents no.1 to 4 has supported the impugned judgment and order. It is contended that

the learned Single Judge has rightly appreciated the aspect that Dhanadal is not an eatable item and does not include in the word “food†and

therefore, the learned Single Judge has rightly come to the conclusion that the manufacturing unit of the petitioners is an industrial undertaking as

defined under Section 2(bb) of the Act.

6.1 It is also contended that the respondent authorities themselves have initially treated the manufacturing units of the petitioners as industrial units and

all the units are low tension units and therefore, the electricity duty would be chargeable as per Entry no.5 ScheduleÂ​1 PartÂ​1.

6.2 It is also contended that the learned Single Judge has rightly appreciated the manner in which Dhanadal is manufactured and its ultimate use and

has rightly come to the conclusion that it is not an edible food item and therefore, the same is not excluded from the definition of the words

“industrial undertakingâ€. It is further contended that the learned Single Judge has rightly interpreted the provisions of Section 2(bb) of the Act and

the Schedule and has rightly come to the conclusion that levy imposed by the respondent authorities as per Entry no.4(a) PartÂI ScheduleÂ1 of the

Act is wrongly levied. On the aforesaid grounds, it is submitted that the appeal is meritÂ​less and the same deserves to be dismissed.

Mr. Kaushik B. Pujara, learned advocate for respondent no.5 â€" Electricity Company has submitted that the Electricity Company is to recover the

electricity duty as imposed by the State Government and therefore, the electricity duty is imposed as per the instructions/orders passed by the State

Government and the electricity Company is not directly concerned with the levy of electricity duty as per particular Entry in the Schedule or not. It is

therefore contended that this Court may pass appropriate orders.

No other or further contentions and/or submissions are made by the learned advocates appearing for the respective parties.

Before considering the submissions made by the learned advocates appearing for the respective parties, it would be appropriate to quote the

relevant provisions of the Act and the Schedule.

“(4) for energy consumed byâ€

(a) an undertaking engaged in the manufacture or the production of eatables or drinks which are not intended to be and are not consumed on the

premises of such undertaking 35 per cent of consumption charges.

(b) hotels including residential hotels, restaurants, eating houses and lodging and boarding houses 45 per cent of consumption charges.â€​

It deserves to be noted that the Act has been amended from time to time and the period for which this matter relates to and the Court is

concerned is post amendment in the Act 17 of 1983 with effect from 11.10.1983. As a matter of record, it may also be stated that the Act has been

amended further which is not relevant for consideration of the case on hand. The words “industrial undertakingâ€​ as defined under Section 2(bb) of

the Act clearly postulate and create an exception by providing that the manufacture or the production of goods (other than eatables or drinks) or

engaged in any job work involving the manufacturer or the production of goods irrespective of whether any service of the nature specified in clause

(aa) is involved in such job work, but does not include a service undertaking.

A bare reading of the said provision as applicable clearly shows that the legislature has thought it fit to exclude eatables or drinks from the

definition of “industrial undertakingâ€​.

The question which arises further for consideration is whether Dhanadal can be considered to be eatable or not. Even as observed by the learned

Single Judge, Dhanadal is a Mukhvas and the only use of Dhanadal is to consume it as an eatable appetizer or digestive. Therefore, as per the

definition of the words “industrial undertaking†as provided under Section 2(bb) of the Act and what is relevant is whether the goods

manufactured or produced is an eatable or not whether it is a food item or whether it is taken as breakfast, lunch or dinner is not at all relevant. We

are in total agreement with the contention raised by Mr. Tirthraj Pandya, learned Assistant Government Pleader that Dhanadal which is manufactured

by the petitioners is an eatable item and it is not material while considering whether it is an eatable item or not. The learned Single Judge, with respect,

has committed an error in coming to the conclusion that it is not consumed as a food and therefore, it is not eatable and eatable may have many uses

in different form. The important aspect which has to be considered is whether particular good manufactured or produced is eatable or not. We may

add that the only use of Dhanadal which is made out of Coriander Seeds is to eat and the Dhanadal therefore is a good even if it is treated as a good

as an eatable. Therefore, whether it is treated as Mukhvas or item of Pan Masala, the fact remains that Dhanadal is an eatable. Considering the

definition of words “industrial undertaking†as defined under Section 2(bb) of the Act, the legislature has thought it fit to exclude those industrial

undertaking though predominantly engaged in manufacturing or production of goods manufactured and providing eatable or drink from the ambit of

words “industrial undertaking†as Dhanadal is an item which can be eaten, it falls within the exception carved out by the legislature other than

eatables. Having come to the aforesaid conclusion therefore, as per Section 2(bb) of the Act, which defines “industrial undertakingâ€, Dhanadal is

eatable as carved out from the definition of the words “industrial undertaking†as defined under Section 2(bb) of the Act as it existed during the

period under consideration and therefore, the contentions raised by Mr. Tirthraj Pandya, learned Assistant Government Pleader deserves to be upheld.

Having come to the aforesaid conclusion, the extent of electricity duty would be governed by Entry no.4 of ScheduleÂ1 of PartÂ1 of the Act and

thus, the petitioners would be governed by Entry no.4(a) of PartÂ​1 of ScheduleÂ​1.

The Division Bench of this Court in the case of Khimji Jamnadas Oil Cake Industries Vs. State of Gujarat & Anr. [2011 (2) G.L.H 357], while

examining the meaning of words “food stuffs†in connection with the provisions of Essential Commodities Act, has observed thus in Paragraph

8:Â​

“8. We are concerned with clauses (C) and (D) of “food stuffs†of ScheduleÂI, so far as the present Appeal is concerned. It is evident from

ScheduleÂI appended to the Order of 1981 that “edible oilseeds†and “edible oils†fall within the ambit of “food stuffsâ€. The word

“edibleâ€, according to Webster's Dictionary, in its adjectival sense, means “fit to be eaten as food; eatable, esculentâ€. According to

Chambers' 20th Century Dictionary “edible†in its adjectival sense means “fit to be eatenâ€. Similarly, according to the shorter Oxford

Dictionary the word “edible†in its adjectival sense means “eatable, fit to be eatenâ€. The contention of the learned counsel for the appellant

that the oil which was seized was not “edible oil†and was “raw oil†and, therefore, not covered under the provisions of the Order of 1981

since it is not one of the essential items declared under the Order of 1981, deserves to be rejected on two good grounds. It is well known rule of

interpretation that associated words take care of their meaning from one another and that is the meaning of the rule of statutory construction, noscitur

a sociis. A word in a statutory provision is to be read in collocation with its companion word. The pristine principle based on the maxim noscitur a

sociis (meaning of a word should be known from its accompanying or associating words) has much relevance in understanding the import of words in

a statutory provision. When “foodstuffs†are associated with edible oilÂseeds which have to be processed before the oil in them can be

consumed, it is appropriate to interpret “foodstuffs†in the wider sense as including all articles of food which may be consumed by human beings

after processing.â€​

It is also noteworthy that as per the Webster's 20th Century Dictionary (1976 Edition), the meaning of word “eatable†is fit to be eaten. When

it is an adjective and anything that may be eaten, which is fit for food, is also eatable.

In 21st Century Dictionary (1997 Edition), eatable means fit to be eaten.

In Shorter Oxford English Dictionary (2002 Edition), meaning of eatable being an adjective is able to be eaten, edible and palatable and is known

as an article of food.

In light of the aforesaid therefore, the decision taken by the authorities is legal and proper and in accordance with law even considering the

analogy which is given by the learned Single Judge as regards biscuit, it also deserves to be noted that the process of manufacturing is also not

relevant for considering definition of words “industrial undertaking†as defined under Section 2(bb) of the Act. What is material is whether it is

eatables or drinks and once the goods or item manufactured falls within the generic terms eatables and drinks, the same are excluded from the

definition of words “industrial undertaking†as defined under Section 2(bb) of the Act. It is not necessary that the article of food is a complete

article by itself which can be consumed as a dish and in view of definition of words “industrial undertaking†as defined under Section 2(bb) of the

Act, the same is nonÂgermane. The learned Single Judge has also committed an error in coming to the conclusion that as the word “eatable†i.e.

Sugar is used, it would not be included in the word “eatableâ€. The analogy provided by the learned Single Judge while determining whether

Dhanadal is included in word “eatable†or not is also nonÂgermane to the issue involved in the petition. The exception which is carved out by the

legislature from definition of words “industrial undertaking†as defined under Section 2(bb) of the Act, is eatable which means which can be eaten

and edible is almost synonym of word “eatableâ€. Dhanadal therefore would fall within the meaning of word “eatable†and it being

“mukhvasâ€, “appetizer†or “digestiveâ€, is also akin to food and therefore, restrictive meaning as given by the learned Single Judge is

incorrect.

In view of the aforesaid, the impugned judgment and order dated 10.1.2013 passed by the learned Single Judge in Special Civil Application no.

4277 of 1986 is hereby quashed and set aside. Accordingly, the appeal is allowed. However, there shall be no order as to costs.