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Judgment
Reva Khetrapal, J.—The respondent who is registered vide TIN No. 07440197334 with the Sales Tax Department is stated to be engaged in the business of importing and selling the pictures of various deities and religious icons having images of Lord Krishna, Lord Hanuman, Lord Mahavira, Lord Rama, Lord Vishnu, Maa Durga, Lord Jesus Christ, Holy Cross, Om, Swastik, etc., on gold plated nickel foils. The respondent is also engaged in the business of procuring metallic, acrylic and wooden frames, nuts and bolts, screws, clips, etc. locally and selling the foils after putting them into the frames. The case of the respondent is that the items in question are religious pictures not for use as calendars and, thus, covered by Entry No. 45 of the First Schedule and consequently exempt from tax. The said Entry reads as follows :-
Entry No. 45
Religious pictures not for use as Calendars.
The Commissioner, VAT rejected the contention of the respondent that the framed religious pictures dealt with by the respondent fell within the ambit of Entry No. 45 of the First Schedule of the DVAT Act and thus were exempt from tax and held that the pictures in question were "General Unclassified Goods" thereby attracting tax @ 12.5% u/s 4(1)(e) of the DVAT Act, 2004. Consequently, the determination order was passed against the respondent who went in appeal before the Appellate Tribunal.
The Appellate Tribunal, after a detailed discussion as to the connotation of the words "religious/religion" and "picture" as contained in various dictionaries and the Macropaedia New Encyclopedia Britannica 15th Edition and after considering the contentions of the parties, including the contention of the counsel for the respondent that the principle of ejusdem generis applied by the Commissioner while interpreting the Entry 45 was not at all applicable in the instant case, held that the ''religious pictures'' dealt with by the respondent which cannot be used as ''calendars'' fell under Entry 45 of the First Schedule, i.e. under the list of exempted commodities. Dissatisfied with the findings of the Tribunal, the department has preferred the present appeal against the order of the Tribunal.
The learned counsel for the respondent submitted that the First Schedule of the Sales Tax Act lists various goods which are exempt from tax by virtue of the provisions of Section 6 of the said Act, and that items dealt with by the respondent fall in the category of Entry 45 of the First Schedule and as such are exempt from tax. In order to fall within the ambit of the said Entry, only two conditions are required to be satisfied and both the said conditions stand satisfied in the instant case namely, (a) the goods should be religious pictures and (b) the goods should not be meant for use as ''calendars''. Merely because the said religious pictures are mounted or framed would not disqualify them from falling within the definition of religious pictures. Furthermore, the mounted or framed religious pictures clearly could not serve the purpose of or be used as ''calendars'' in any manner. The word ''calendar'' clearly suggests that information in respect of the dates and weeks or months of an year would be reflected there from and since no such information is remotely available on the religious photographs, there can be no occasion for the said religious photographs to be used as ''calendars''. Since the definition of neither ''religious pictures'' nor ''calendars'' is to be found in the Statute, the learned counsel for the respondent dwelt upon various dictionary meanings to explain the words ''calendar'', ''picture'' and ''religious/religion''.
The relevant part of the discussion as noted by the Tribunal is as follows :-
9....... In this regard, however, dealing firstly with dictionary meaning the Ld. Counsel has invited our attention towards various dictionary meanings to explain the words ''calendar'', ''picture'' and ''religious/religion''. Firstly, in the Third Edition of Longman Dictionary of Contemporary English on page 179, ''Calendar'' has been defined as under :
Pages printed to show the days, weeks and months of a particular year, that you hang on the wall.
In the light of above, the Ld. Counsel argues that the ''Calendar'' depicts only the dates, months, years etc. in the clear manner.
The Ld. Counsel has next taken us through the definition of the word ''picture'' as contained in the Special Second Edition of Random House Compact unabridged Dictionary where at page 1465, the word ''picture'' has been defined as under:-
a Visual representation of a person, abject, or scene, as a painting, drawing, photograph, etc.
He has also referred to the definition of ''picture'' as contained in Collins Co build English Dictionary for Advanced Learners wherein at page 1158 the ''picture'' has been described as follows:-
a picture consists of lines and shapes which are drawn, painted or printed on a surface and show a person, thing or scene.
Dealing with the word ''religious'' in connection with ''religious pictures'', Shri Parthasarthy, Advocate has taken us through the Words and Phrases Permanent Edition West Publishing Co., Volume 36A Reclaim -Repaving wherein at page 465 the term ''religion'' has been described as follows:-
The term "religion" has reference to one''s views of his relations to his Creator and to the obligations they impose of reverence for his being and character, and of obedience to his will. It is often confounded with cultus or form of worship of a particular sect, but is distinguishable from the latter.
It has further been explained therein as under:-
Religion'' is a term referring to one''s views of his relations to his Creator and to the obligations they impose of reverence for His being and character and of obedience to His will. The term is often confounded with a "cultus" or form of worship of a particular sect, but is to be distinguished from the latter.
It is true that in the aforesaid explanations the term "religion" has been explained whereas we are concerned with the word "religious" as appearing in the term "religious pictures". For that purpose it has further been explained on the same page of the book that "religious" is an adjective form of "religion", and means an apprehension, awareness or conviction of existence of a Supreme being controlling one''s destiny.
In this respect, we have also been taken through Volume 26 of the MACROPAEDIA New Enclopaedia Britannica 15th Edition wherein at pages from 637-646. Religious Symbolism and Iconography has been extensively explained at page 641, however Pictorial description like the one in the instant case has also been described as Religious Symbolism. On this page under the Heading of Diagrammatic and emblematic, it has been explained that - symbolic representation are usually depicted in diagrammatic or ideographic modes or signs, abbreviations, images and objects of all kinds - that indicate a larger context. Further explaining pictorial symbol in this respect i.e. the pictures of Gods, Goddesses like Lord Rama, Shiva, Parvati, Christ, Lord Buddha etc. the Ld. Counsel while taking us further through the same page has referred to the certain portions which state that Pictorial symbolism in its many forms is a further development of non-representation, ideographic symbolism and also, to some extent, its origin. It further goes on to explain that in depicting the world of nature, pictorial symbolism captures and mediates the religious experience of reality and the picture shows plainly and clearly the rich and intricate connections of its symbolic context.
The Ld. Counsel has thus argued that the products in question are only the Religious pictures, which fall squarely within the ambit of Entry 45.
The next submission of the learned counsel for the respondent which needs to be noted is that the words and phrases used in a taxing statute but not specifically defined therein, must be understood in the popular and commercial parlance. This contention was sought to be rebutted by the learned counsel for the Revenue by stating that the principle of ejusdem generis should be applied in order to interpret Entry No. 45 in the instant case, for which the learned counsel for the Department has relied upon the judgments of the Supreme Court in the case of Siddeshwari Cotton Mills (P) Ltd. Vs. Union of India (UOI) and Another, , and Grasim Industries Ltd. Vs. Collector of Customs, Bombay, .
Another contention of the learned counsel for the Revenue is that the moment the said ''religious picture'' is mounted or framed, it goes outside the ambit of Entry No. 45 as it no longer remains a religious picture simplicitor, and becomes a "General Unscheduled Item" liable to tax @ 12.5% u/s 4(1)(e) of the Delhi Value Added Tax Act, 2004. The learned counsel also contended that the gold plated nickel foils on which the religious pictures and icons were embossed were of considerable value and this factor alone was sufficient to show that such kind of religious pictures were not religious pictures stricto senso.
After considering the contentions raised at the Bar, in our considered opinion, there is no ambiguity in the expression ''religious pictures'' as the word ''religion/religious'' as well as the word ''pictures'' when taken in their popular and commercial sense are capable of no other interpretation except to mean pictures which are used for the purpose of religious worship and propagation. Likewise, the expression "not for use as Calendars" is, in our opinion, susceptible only to the meaning that the religious picture should not appear on a paper or page printed to show the days, weeks and months of a particular year, whether it is hung on the wall or finds a place on a table calendar.
We are fortified in coming to the aforesaid conclusion from the judgment of the Supreme Court in the case of Indo International Industries Vs. Commissioner of Sales Tax, Uttar Pradesh, wherein it was observed that the well-considered test in interpreting, items in a taxing Statute like the Excise Tax Acts or the Sales Tax Acts, whose primary object is to raise revenue, is that resort should be had not to the scientific or technical meaning of the terms or expressions, but to their popular meaning, i.e. to say, the meaning attached to them by those dealing in them. If any term or expression has been defined in the Statute then it must be understood in the sense in which it is defined, but in the absence of any definition given in the enactment, the meaning of the term in common parlance or commercial parlance has to be adopted. In the said case, the question which arose for consideration of the Supreme Court was as to whether the hypodermic clinical-syringes can be regarded as "glassware" under Entry 39 of the First Schedule to the U.P. General Sales Tax Act, 1948. Applying the aforesaid test, the Supreme Court came to the conclusion that the clinical syringes which the assessee was manufacturing and selling could not be considered as ''glassware'' in popular or commercial parlance for the reason that a genuine merchant dealing in glassware does not ordinarily deal with articles like clinical syringes, thermometers, lactometers, etc. and it is equally unlikely that the consumer would ask for such articles from a glassware shop.
The Supreme Court in the case of Indo International Industries (supra) relied upon its earlier judgment rendered in the case of Ramavatar Budhaiprasad etc. v. Assistant Sales Tax Officer, Akola [1961] 12 STC 286 (SC) where the question was whether ''betel leaves'' fell within the item ''vegetable'' so as to earn exemption from sales tax. The Court held that the word ''vegetable'' had not been defined in the Act and the same must be construed not in any technical sense nor from the botanical point of view, but as understood in common parlance, and thus construed it denoted those classes of vegetable matter which are grown in the kitchen garden and are used for the table. ''Betel Leaves'' were not comprised within it and therefore were not exempt from taxation.
In Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh, the question arose as to whether the item ''coal'' under Entry (1) of Part 3 of the Second Schedule to the M.P. General Sales Tax Act, 1958, included ''charcoal'' or not. The Supreme Court observed thus:
Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manufactured by human agency from products like wood and other things. But it is now well-settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense. In Ramavatar Budhaiprasad Etc. Vs. Assistant Sales Tax Officer, Akola, , the petitioners who, were dealers in betel leaves were assessed to sales tax under the C.P. and Berar Sales Tax Act, 1947. They contended that u/s 6 read with the Second Schedule of the Act betel leaves were not taxable. Section 6 provided that articles mentioned in that Schedule were exempt from sales tax and articles not mentioned were taxable. There were two items in the Schedule, namely, Item 6, "vegetables", and item 36, "betel leaves", but subsequently item No. 36 was deleted by an amendment of the Act. This Court held that the use of two distinct and different items i.e., ''vegetables'' and ''betel leaves'' and the subsequent removal of betel leaves from the Schedule were indicative of the Legislature''s intention of not exempting betel leaves from taxation. The Court laid down that the word ''vegetable'' must be interpreted not in a technical sense but in its popular sense as understood in common language i.e., denoting a class of vegetables which are grown in a kitchen garden or on a farm and are used for the table. The same principle was also laid down in His Majesty the King v. Planters Nut and Chocolate Company Limited [1951] C.L.R. 122. The question there was whether salted peanuts and cashew nuts fell within the category of either fruits or vegetables. A considerable expert opinion was led in that case, but the Court ultimately found that the Parliament in enacting the Excise Tax Act, 1927, Part XIII and Schedule III was not using words which were applied to any particular science or art and, therefore, the words used are to be construed as they are understood in common language. It also held that what constitutes a ''fruit'' or ''vegetable'' within the meaning of the Excise Tax Act is what would ordinarily in matters of commerce in Canada be included therein and not what would be a botanist''s conception of the subject matter. If a statute uses the ordinary words in every days use, such words should be construed according to their popular sense. At page 128 of the Report Cameron, J., observed, "The object of the Excise Tax Act is to raise revenue, and for this purpose to class substance according to the general usage and known denominations of trade. In my view, therefore, it is not the botanist''s conception as to what constitutes a ''fruit'' or ''vegetable'' which must govern the interpretation to be placed on the words, but rather what would ordinarily in matters of commerce in Canada be included therein. Botanically, oranges and lemons are berries, but otherwise no one would consider them as such". This rule was stated as early as 1831 by Lord Tenterdan in Attorney General v. Winstanley [1831] 2 D & CI. 302. Similarly, in Grenfell v. Inland Revenue Commissioner [1876] I Ex-D. 242, Pollock, B., observed, "that if a statute contains language which is capable of being construed in a popular sense such statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense, meaning of course, by the words ''popular sense'', that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it". But, "if a word in its popular sense and read in an ordinary way is capable of two constructions, it is wise to adopt such a construction as is based on the assumption that Parliament merely intended to give so much power as was necessary for carrying out the objects of the Act and not to give any unnecessary powers. In other words, the construction of the words is to be adopted to the fitness of the matter of the statute". On the other hand, as Fry, J., said in Holt & Co. v. Collyer [1881] 16 Ch. D. 718, "If it is a word which is of a technical or scientific character then it must be construed according to that which is its primary meaning, namely, its technical or scientific meaning.
From the aforesaid dicta laid down by the Supreme Court we are of the view that the Tribunal rightly held that religious pictures imported by the respondent fall within Entry 45. Merely because the religious pictures are mounted or framed is a matter of irrelevance. The cost of the item again is irrelevant. We are supported in our view by a Constitution Bench judgment of the Supreme Court in A.V. Venkateswaran, Collector of Customs, Bombay Vs. Ramchand Sobhraj Wadhwani and Another, . The said case debated on the rate of customs duties on fountain pens with nibs and caps plated with gold. According to the Indian Tariff Act, 1934, the said pens were Sheaffer pens imported from Australia, a consignment whereof had been received in Bombay. The Schedule to the Indian Tariff Act, 1934 has an item being Item no. 45(3) in relation to the article described as "Fountain pens complete" and the rate of duty prescribed thereon is 30% ad valorem. It was the case of the assessee that the imported goods fell within this item and were liable to be charged with duty at that rate. The Customs Authorities, however, considered that the consignment fell within the description "Articles plated with gold or silver" being Item 61(8) on which the duty was payable @ 783/4%. The Assistant Collector of Customs adjudicated the duty on the later basis and thereafter the respondent having filed an appeal to the Collector of Customs, the levy was upheld in the said forum.
The assessee filed a writ application in the High Court of Bombay. A Single Judge of the Bombay High Court and thereafter a Division Bench of the same High Court held that no reasonable person could, on the construction of the relevant item in the Schedule to the Tariff Act hold that the consignment of fountain-pens would fall under any item other than Item 45(3) or be charged a duty other than 30% provided under that item. Affirming the judgment of the Bombay High Court, the Supreme Court made the following apposite observations: -
In reaching this conclusion we have taken into account the fact that "fountain-pens complete" were taken out of the general item 45 ''Stationery etc.'' under which they were originally included, by an amendment effected in 1949 in pursuance of an international agreement and that though the duty on stationery was thereafter increased from 30 to 371/2 per cent., under the provisions of the Finance Act, 1949, the duty of 30 per cent. fixed on fountain-pens remained unchanged. This at lease showed that they were treated as a specialized class of stationery which required separate treatment. The only question therefore is whether a fountain-pen in which certain of its essential parts are gold or silver-plated falls outside the category of "fountain-pens complete". It cannot be gainsaid that a nib, cap and clip are essential parts of a fountain-pen and not mere accessories, and that without them there would be no question of having a "fountain-pen complete". Next it is a well-known and recognized fact that most fountain-pens in ordinary use have nibs which are gold-plated. In this connection it should not be overlooked that gold, apart from being a store of value, is a metal which has industrial uses by its malleability and its resistance to oxidation on contact with acids and chemicals which enter into the composition of ink. The use of gold plating for nibs is therefore for increasing the utility of the nib for its primary function of writing and not with a view to enhancing its value by the cost of the metal.
We may also take note of the judgment of the Supreme Court in the case of A. Nagaraju Bros., Visakhapatnam Vs. State of A.P., . The question in that appeal was whether "VIP suitcases" were plastic articles within the meaning of Entry 113 of the Schedule-I of the Andhra Pradesh General Sales Tax Act. The Supreme Court, after noting that the suitcases may be made of leather, cloth, rexine and other material but the VIP suitcases manufactured by the assessee were made of plastic and applying the common parlance test held that these suitcases are understood to be plastic goods. The Court, however, observed :
It is true that certain other material are also used in manufacturing the said suitcases and it may also be that their value is substantial - and in some cases more than the value of the plastic - but having regard to the several circumstances aforementioned and applying the common parlance test and the test of usage in trade circles, these goods must be called ''plastic articles.
It further observed as follows: -
In its order T.A. No. 566 of 1984, followed in the present case, the Tribunal has given more importance to the respective value of the plastic and the other materials (like steel including locks and other fixtures) and opined that since the value of other components is more than the value of plastic used therein, they cannot be called ''plastic articles''. It gave certain illustrations to emphasize that value is the determining factor. The Tribunal pointed out that in the case of a diamond ring, the major component may be gold or silver and the diamond may represent a small portion of it, yet nobody would call it gold or silver ring; it would be called a diamond ring, it is undoubtedly so. But this only shows that there is no one single universal test in these matters. The several decided cases drive home this truth quite eloquently. It is for this reason probably that the common parlance test or commercial usage test, as it is called, is treated as the more appropriate test, though not the only one. There may be cases, particularly in the case of new products, where this test may not be appropriate. In such cases, other tests like the test of predominance, either by weight of value or on some other basis may have to be applied. It is indeed not possible, nor desirable, to lay down any hard and fast rules of universal application. But so far as the goods concerned herein are concerned, these are undoubtedly plastic goods. Indeed, we put a straight question to Sri C. Sitaramiah, how would he characterize these goods? The answer could not be anything else than that they are plastic goods. Merely because in value of the steel including the locks and other materials used in the suit cases is more than the value of plastics, they cannot be called articles made of steel or of such other materials. Of course, on and after July 1, 1985 this issue will not arise, since Entry 163 specifically speaks of suitcases of all kinds. These suitcases too would fall under that entry. The present controversy arose because there was no specific entry relating to or covering the suit cases.
Thus, as far as the characterization of the goods in the instant case is concerned, we are inclined to agree with the findings rendered by the Tribunal that the frames of the religious pictures in the instant case are nothing more than accessories for the safe-keeping of the religious pictures and do not give any essential characteristics to the goods. Merely because the ''religious pictures'' are mounted, it cannot be said that they are no longer religious pictures. Pictures of the divine, whether mounted, framed or otherwise would not change their intrinsic character by virtue of such mounting or framing.
So far as the other aspect is concerned, viz., the value of the nickel foils, it need not detain us any further in view of the law laid down by the Supreme Court that an item should be classified according to its nature and use and not on the basis of the value of its accessories. It has gone to the extent of stating that merely because the value of the accessories and other materials used is more than the value of the item itself is immaterial. Thus, in A. Nagaraju Bros. (supra) it was held that merely because the value of the suitcases including the locks and other materials used in the suitcases is more than the value of the plastic, the VIP suitcases could not be called articles made of steel or of such other material. Similarly, in the case of A.V. Venkateswaran, Collector of Customs, Bombay (supra), the fact that the fountain-pens had nibs and caps plated with gold was held to be a matter of no consequence and it was held that it should not be overlooked that gold apart from being a source of value is a metal of malleability and its resistance to oxidation on contact with acids and chemicals was significant. Needless to state also that the use of gold in religious pictures which depict divinity is in consonance with the concept of the divine. The use of gold plated nickel foil would add ambience to the pictures and thereby increase its value in the aesthetic sense for a man of religious sentiment and theist views.
As regards the applicability of the principle of ejusdem generis sought to be pressed into service by the Department, it would be trite that the said principle is not an inviolable rule of law. It is only in the absence of any indication to the contrary that it may be pressed into service. When Entry No. 45 is absolutely clear and unambiguous, the rule of ejusdem generis can have no application. As held in Siddeshwari Cotton Mills (P) Ltd. (supra) and Grasim Industries Ltd. (supra), the said rule has to be applied with caution and not pushed too far. The rule reflects an attempt to reconcile incompatibility between the specific and general words and applies only where the context of the enactment does not require restricted meaning to be attached to the words of general import. But, as stated above, a note of caution has been sounded by the Apex Court in this regard, namely, that the rule is to be applied with care and caution and in the absence of any indication to the contrary. In the instant case, in our view, the said rule of ejusdem generis is wholly inapplicable.
In view of the aforesaid, we find no merit in the appeal. The appeal is accordingly dismissed.