Commissioner of Sales Tax, M.P. vs M.P. State Industries Corporation Ltd. Bhopal

U.L. Bhat, C.J.

The following question of law has been referred to this Court by the Board of Revenue (Appellate Tribunal), u/s 44 (1) of the M.P. General Sales Tax Act, 1958, at the instance of the Revenue.;

"Whether under the facts and circumstances of the case, the Tribunal was justified in holding that cotton seed husk is covered under Entry No. 16 of Schedule I appended to the Madhya Pradesh General Sales Tax Act, 1958 ?

The assessment period is from 1.4.68 to 31.3.69. The assessee has solvent extraction plant. Cotton seed, after removing husk, is used for extraction of oil. Cotton seed husk is sold since it has a market as cattle feed. Entry 16 of Schedule I of the M.P. General Sales Tax Act, 1958, (for short, the Act), as it existed at the relevant time, read as follows :

''''Fooder excluding cotton seed, oil seeds and concentrate.''''

Such goods are exempt from sales Tax. The assessee claimed exemption regarding cotton seed husk as fodder falling within the Entry 16. The Assessing Officer as well as the Appellate Deputy Commissioner disallowed the claim. The Board of Revenue allowed the claim. The Board of Revenue, after considering the decision in C. S. T. M.P. vs. Bhagwandas Johar and R. D. Pradhan and Sons Raipur vs. C. S. T. M.P. 1970 V.K. N III, P. 266 held that cotton husk is used to feed cattle and is ''fodder.'' Hence this reference of the Revenue.

In the 1947 Act, Entry 16 took in oilcakes and other cattle foods. When the 1958 Act was enacted, Entry 16 is fodder except cotton seed and oilcakes." By 1964 amendment, the entry was changed as "fodder excluding cotton seed and oilcakes." By the amendment of 1986, "concentrates'''' also were excluded.

The entry was amended in 1971 as "fodder, that is to say, grams, hay, straw or any other plant in green or dried from ordinarily used for fooding cattle, except where purchased as raw material for the manufacture of other goods."

One of the decisions relied upon by the Board is the one in C. S. T. M.P. Vs. Bhagwandas 1976 V K N 9 886. In that case, the Court considered whether reskalots (waste material left out in the process of preparing jeggary) which is consumed only as cattle food, is ''fodder within the meaning of Entry 16 which read as follows;

"Fodder, excluding cotton seed, oilcakes and concentrates."

The Court indicated that "fodder" can he understood in two senses; one in the technical sense as understood in common parlance, and the other in the comprehensive sense as including all cattle food. Because of specific exclusion of cotton seed and oil cake, the Court took the view that the expression fodder has used in the comprehensive sense of any cattle food and, therefore, reskat-lots, winch is only cattle food, fell within the scope of Entry 16.

Another Division Bench, in a letter case, doubted the correctness of the above decision and referred the matter to a Full Bench. That was in R. D. Parikh''s case which related to sale of cattle food of the brand name "Gold Mohur Pashu Ahar." The Full Bench held as follows :

"In Entry No. 16, cotton seed and oil cakes appear to have been excluded by way of abundant caution, as these two items are generally used for cattle feeds and there was a possibility of advancing an argument because Of the general practice that these two items stood included in the expression ''fodder..."

''''From the present entry, it is quite clear that the expression ''fooder'' in only to the roughages and not anything else that may be fed to the cattle. In contrast to this, it may be noted that in certain Sales Tax Acts of other Stales, exemption is granted to cattle feeds as such. Under that kind of entry, every article that can be used as cattle feed including concentrates, may stand included, the expression being or much wider amplitude than the expression ''fodder.'' The expression ''fodder'' in common parlance, applies to roughages only. It is well settled rule of interpretation that the words used in (axing entries should be interpreted in the manner they are commonly understood unless the context requires that they should be interpreted in a technical sense."

''''We have no hesitation in holding that the expression ''fodder'' only includes roughages, such as green grass, hay, bhusa, kadbi etc. and it does not include oil cakes, cotton concentrates etc. even if they are included in the cattle feed.

(Emphasis supplied)

Following the view of the Full Bench, the case went back to the Division Bench which held that Entry 16 did not cover concentrates like "Gold Mohar Pashu Ahar'''' which, mixed with rise polishing, wheat brand etc, are fed to cattle.

In Kallumal Sawaldas vs. C. S. T. (1983) 54 S.T.C. 103), this Court held that though Chuni is cattle feed, yet it is not fodder or roughages within the meaning of Entry 16, relying on the earlier Full Bench decision.

Learned Counsel for the assessee also placed reliance on a decision of Punjab & Haryana High Court in State of Haryana vs. Prithviraj Agarwal, Vol. 78. S. T. C. 361). The assessee claimed deduction on the sale of Chhilka of Binola as ''fooder'' of Entry 34 of Schedule B of the Haryana Act which read as "Fodder of all types (dry or green), excluding oil cakes, guargiri and chhilka of foodgrains and pulses.'' ''The expression ''fodder'' was not defined in the Act or the Rules. There was no material or evidence on the file to hold as to how this expression ''fodder'' is understood in common parlance. Reference was made to the meaning of ''fodder'' as ''food supplied to cattle, given in Chambers Twentieth Century /Dictionary. It was held that binola chhilka is roughage which remains after extraction of oil and is used as animal feed and since it was not excluded, it has to be regarded as fodder. It has to be noticed that this decision is directly contrary to the view taken by this Court in the case decided by the Full Bench.

It is important to note that Entry 16 does not relate to animal food as such, but only to fodder excluding cotton seed, oil cake and concentrate. A Full Bench of this Court has taken a view that the exclusion is only by way of abundant caution and does not widen the meaning of the expression ''fodder'' which has been used as meaning roughage which is also used as animal feed. That is how, according to the Full Bench, fodder is understood in common parlance.

We are bound to follow the view taken by to Full Bench of this Court, according to which ''fodder'' is only a roughages, such as green grass, hay, bhusa etc. and does not include cotton seed, oil cakes or cotton seed concentrates. Husk of cotton seed cannot, by any standard, be regarded as roughage and cannot be understood as fodder. It may be animal feed, but fodder as understood in common parlance.

It, therefore, follows that the view taken by the Board of Revenue is erroneous. The question referred is answered in the negative, i. e. in favour of Revenue and against the assessee.

A copy of this order under the signature of the Registrar and seal of the High Court shall be forwarded to the Board of Revenue.