Deputy Commissioner of Commercial Taxes, Tiruchirapalli Division vs Hameed Trading Company

V. Ramaswami, J.—In T.C. No. 195 of 1968, the Deputy Commissioner, Commercial Taxes, Tiruchirapalli Division, is the petitioner. The

respondent is a dealer in paddy, rice and coconuts and doing business in Kumbakonam. For the assessment year 1963-64, the total and taxable

turnover was determined at Rs. 6,74,269.23 and Rs. 3,63.100.08 as against the reported total and taxable turnover of Rs. 3,23,837.13 and Rs.

2,83,000.73. In determining the taxable turnover, the assessing officer disallowed a claim of exemption to an extent of Rs. 12,482 relating to sales

of coconut. In addition to this, the assessing officer added a sum of Rs. 28,064.86 as suppressions noticed as per slips recovered during an

inspection and a sum of Rs. 30,457.75 being 10 per cent of the taxable turnover towards probable omissions. The respondent-assessee disputed

the addition and also the disallowance of the claim of exemption and filed an appeal to the Appellate Assistant Commissioner, Tanjore, without

success. The assessee again filed an appeal to the Tribunal. While the appeal was pending, he raised additional grounds contending that the entire

sales turnover of coconut are exemptible as coconut is a fruit and exempted as per Government Notification No. 1764, Revenue, dated 5th April,

1960. The original contention regarding coconut was that it is an oil-seed and, therefore, liable for single point levy and that the transactions by him

being second sales were not liable to tax. The Sales Tax Appellate Tribunal (Second Additional Bench), Madras, deleted the addition of Rs.

30,457.59 on the ground that there is no proof of any sales suppression. Regarding the addition of Rs. 28,064.86 towards actual suppression, the

Tribunal found that the assessee was able to prove that a turnover of Rs. 3,399.50 has been brought into accounts and, therefore, reduced the

addition towards suppression to Rs. 24,665.36. On the question whether coconut is a fresh fruit within the meaning of the Government notification

dated 5th April, 1960, the Tribunal held that coconut is a fresh fruit and is exemptible. On the other question whether it is an oil-seed liable to

single point levy, following the decision of this court in Kannappa Mudaliar v. State of Madras [1968] 21 S.T.C. 41, held that it is not an oil-seed.

The department has filed this tax case contending that coconut is not a fresh fruit within the meaning of the Government notification.

T.C. No. 411 of 1969 is a tax revision case filed by the assessee-one A. Shanmugam Chetty. The assessee was a dealer in coconut carrying on

business in Madras. For the year 1966-67 he returned a total turnover of Rs. 1,95,263.10. He however claimed that the entire turnover was not

taxable as being sales of coconut. The Deputy Commercial Tax Officer estimated the total and taxable turnover at Rs. 1,96,348.07. The assessee

having failed to persuade the Appellate Assistant Commissioner, filed an appeal to the Sales Tax Appellate Tribunal. The assessee as in the other

case raised the contention that coconut is an oil-seed and that, in any case, it is a fresh fruit within the meaning of the Government notification. He

also raised the contention that coconut is a vegetable and therefore exempt. This came before a different Tribunal. The Tribunal following their

earlier decision in T.A. Nos. 2395 and 2396 of 1966 dated 18th January, 1969, rejected the contention of the assessee that coconut is either a

fresh fruit or vegetable. Following the decision of this court in Kannappa Mudaliar v. State of Madras [1968] 21 S.T.C. 41, it also rejected the

contention that it is an oil-seed. The assessee has filed this tax case repeating the same contentions.

W.P. No. 1439 of 1970 has been filed praying for the issue of a writ of certiorari to call for and quash the order of the Additional Appellate

Assistant Commissioner of Commercial Taxes, Madurai, in Appeal No. 97 of 1970 dated 13th March, 1970, confirming the order of the

assessment made by the Joint Commercial Tax Officer. The petitioner is a partnership firm running a grocery and coconut shop. For the

assessment year 1968-69. he claimed exemption in respect of coconut sales on a turnover of Rs. 4,73,903.34 on the ground that coconut is either

a fruit or a vegetable and exempt under the Government notification. This contention was rejected by the assessing and appellate authorities. He

has directly filed this writ petition against these orders without filing an appeal to the Sales Tax Appellate Tribunal on the ground that the Tribunal''s

Madurai Bench has already expressed the view following the decision of the Madras Bench in T. A. Nos. 2395 and 2396 of 1966 that coconut is

neither a fresh fruit nor vegetable. The same writ petitioner has filed W. P. No. 3425 of 1970 in respect of the assessment year 1969-70. In this

case, he did not even go in appeal to the Appellate Assistant Commissioner in view of the decision of the Appellate Tribunal and has filed the writ

petition directly against the assessment order. In both the writ petitions, the same contentions are raised that coconut is a fresh fruit or a vegetable

and, therefore, exempt from sales tax.

We are concerned in this case not with tender coconut or green coconut or immature coconut but with ripened coconut. The expression

ripened coconut"" includes dehusked coconut as also coconut with husk. We are using the expression ""coconut"" in our judgment in this case to

mean both dehusked coconut and coconut with husk.

In view of the decision of a Division Bench of this Court in Kannappa Mudaliar v. State of Madras [1968] 21 S.T.C. 41, which is binding on

us, the learned counsel for the petitioner in T.C. No. 411 of 1969 did not advance any argument in respect of the ground raised by him in the

petition that coconut is an oil-seed. It has been held in that case that coconut is not an oil-seed within the meaning of item 6(a) of the Second

Schedule to the Tamil Nadu General Sales Tax Act, 1959. The only question that remains to be considered in these tax cases and writ petitions is

therefore whether coconut is a fresh fruit or vegetable within the meaning of those words in the exemption made in the notification of Government.

u/s 6(1) of the Madras General Sales Tax Act, 1939, the Government in G.O. No. 710, Revenue, dated 25th March, 1954, exempted ""all sales

of handloom cloth, eggs, meat and fish (other than canned, preserved, dried or dehydrated fish and meat), flowers, vegetables and fruits (other

than potatoes, onions, nuts, coconuts, dehydrated vegetables, canned, preserved, dried or dehydrated fruits) from the tax payable"" under the said

Act. This was amended in G. O. Press 1913, Revenue, dated 16th May, 1956, by which, for the words and brackets ""vegetables and fruits (other

than...dehydrated fruits)"" the words and brackets ""ginger, green chillies, vegetables and fruits (other than sweet potatoes, yam and tapioca, garlic

and other similar varieties of vegetables which are used as spices and condiments and not as substantial articles of food, nuts, coconuts,

dehydrated vegetables, canned, preserved, dried or dehydrated fruits)"" were substituted. These notifications were operative till the Tamil Nadu

General Sales Tax Act, 1959, was passed. But these notifications were not continued under the 1959 Act. Subsequently, in G. O. No. 1764,

Revenue, dated 5th April, 1960, the Government exempted with effect from 1st April, i960, ""all sales of vegetables, fresh fruits, betel and plantain

leaves, flowers, eggs, meat and fish (other than canned meat and fish) and the purchases of potatoes"" from the levy of sales tax under the 1959

Act, This Government Order was amended by G.O. No. 5274, Revenue, dated 22nd December, 1960, inserting after the word ""vegetables"" the

following words ""(other than dried and dehydrated vegetables)"". It is the construction of this notification as amended that is involved in all these

cases.

The principle to be adopted in the matter of construction of such provisions was discussed by the Supreme Court in Ramavatar Budhaiprasad v.

Assistant Sales Tax Officer [1961] 12 S.T.C. 286 and Commissioner of Sales Tax v. Jaswant Singh Charan Singh [1967] 19 S.T.C. 469. In

Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 S.T.C. 286, it was held that the word ""vegetable"" found, in the schedule to the

C. P. and Berar Sales Tax Act, 1947, must be construed not in any technical sense nor from the botanical point of view but as understood in

common parlance. Being a word of every day use, it must be construed in its popular sense meaning that sense which the people conversant with

the subject-matter with which the statute is dealing, would attribute to it. It has to be construed as understood in common language.

In Commissioner of Sales Tax v. Jaswant Singh Charan Singh [1967] 19 S.T.C. 469, the Supreme Court observed ""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"". The Supreme Court approved the principle laid down

in His Majesty the King v. Planters Nut and Chocolate Company Ltd. (1951) C.L.R. (Ex.) 122, where the question was whether salted peanuts

and cashew-nuts fell within the category of either fruits or vegetables. It was held in that case that the words are to be construed as they are

understood in common language. It is also well-settled that the words will have to be construed and understood with reference to the context in

which they have been employed in the statute and also the scheme of the Act in general.

Having regard to these principles, let us now take up first the question whether coconut is a fresh fruit under the exemption notification. Oxford

Illustrated Dictionary (1962) defines ""fruits"" as ""(i) vegetable products fit for food, (ii) edible products of plant or tree, consisting of seed and its

envelope, especially when this is juicy or pulpy; ripe seeds and structure surrounding them"". In the book ""Coconut Palm"" by K. P. B. Menon and

K. M. Pandalai, coconut is generally referred to as a ""fruit"". Webster''s Dictionary does show ""coconut"" as a ""fruit of the coconut palm consisting

of a thick fibrous brown ovate husk under which there is thick hard shell enclosing the layer of edible white meat"".

A Full Bench of this Court in S.M. Narayana Ayyangar v. S.P.R.M. Subramanian Chettiar AIR 1937 Mad. 254 had considered the question

whether a coconut plantation is a fruit garden within the meaning of the Estates Land Act. It was held in that case that coconuts are fruits, coconut

trees are fruit trees and that a coconut plantation is a fruit garden. It was also pointed out that in common parlance, coconut is always referred to as

a fruit before fibre is removed. We are of the opinion that these definitions in the dictionaries and the decision given with reference to the Estates

Land Act could not conclude the question, because in the present case we have to interpret the words in the context in which they appear in the

statute and in the way in which they are commonly understood.

Prior to the notification in G.O.Ms. No. 710, Revenue, dated 25th March, 1954, coconut was subject to sales tax. Even under that notification

coconut was excluded from the terms ""vegetables and fruits"". Thus coconut was subject to sales tax till G.O. No. 1764, Revenue, dated 5th April,

1960, was published. In the place of ""vegetables and fruits (other than sweet potatoes, yam, tapioca, garlic and other similar varieties of vegetables

which are used as spices and condiments and not as substantial articles of food, nuts, coconuts, dehydrated vegetables)"", we find in the notification

dated 5th April, 1960, the following words ""vegetables other than dried and dehydrated vegetables, fresh fruits"". The employment of the words

fresh fruits"" in the place of ""fruits"" appearing in the original notification under the old Act is, in our opinion, significant. It seems to us that the

Government has employed a compendious term ""fresh fruits"" instead of the descriptive words ""fruits, other than canned, dried, preserved or

dehydrated fruits"". It should be borne in mind that coconut had always been taxed under the Sales Tax Act though ""fruits"" were exempted. There is

very little material for holding that the Government had changed their view and exempted coconut also from taxation under the new Act.

In this connection, we may also use the test laid down in His Majesty the King v. Planters Nut and Chocolate Company Ltd. (1951) C.L.R.

(Ex.) 122, which decision was cited with approval by the Supreme Court in Commissioner of Sales Tax v. Jaswant Singh Charan Singh [1967] 19

S.T.C. 469 . It was stated therein ""counsel for the plaintiff suggested a test, which I think apposite. Would a householder when asked to bring

home fruit or vegetable for the evening meal bring home salted peanuts, cashew-nuts or nuts of any sort ? Answer: obviously not"". If we make the

same test for coconuts, we think the same negative answer must follow. It also seems to us that the use of the word ""fresh"" in the context of the

other items which are exempt under the said Government notification dated 5th April, 1960, seems to be significant. The raison there exempting the

various articles mentioned therein seems to be the perishable nature or character of those articles. If that were so, coconut could not be treated as

a perishable and, therefore, a ""fresh fruit"" under that exemption. Having regard to the legislative history of the words employed in the exemption,

we are of the view that coconut is not a fresh fruit within the meaning of the exemption under the Government notification.

We are also of the opinion that coconut cannot be deemed to be vegetable within the meaning of that word under the exemption. In Ramavatar

Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 S.T.C. 286, the Supreme Court observed the following observation of the Madhya

Pradesh High Court in Madhya Pradesh Pan Merchants'' Association, Santra Market, Nagpur v. The State of Madhya Pradesh (Sales Tax

Department) [1956] 7 S.T.C. 99, as correctly laying the test on ""vegetable"" :

In our opinion, the word ''vegetables'' cannot be given the comprehensive meaning the term bears in natural history and has not been given that

meaning in taxing statutes before. The term ''vegetables'' is to be understood as commonly understood denoting those classes of vegetable matter

which are grown in kitchen gardens and are used for the table.

The question is whether coconut is a kitchen garden product or is used for the table. It is true that in this part of the country the kernel of the

coconut is used as an ingredient in the culinary preparation for adding taste to the food. But the test, in our opinion, laid in that case is not that the

article is used as an ingredient in the preparation of food, but whether it is a part or principal article of food itself like fish, meat, etc. It is not used

as a substantial article of food and, therefore, it cannot be stated that it satisfies the test of ""used for the table"". Though much may be said for both

views on the question whether coconut is grown in kitchen garden, as we are satisfied that it cannot be treated as a food used for the table, we are

not inclined to go into that question.

For the foregoing reasons, we are also of the view that coconut is not vegetable within the meaning of the Government notification cited above.

The result is, T. C. No. 195 of 1968 is allowed and T. C. No. 411 of 1969, W. P. Nos. 1439 and 3425 of 1970 are dismissed. State will be

entitled to their costs in T. C. Nos. 195 of 1968 and 411 of 1969 and W. P. No. 1439 of 1970. Counsel fee Rs. 150 in each case. There will be

no order as to costs in W. P. No. 3425 of 1970.