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Judgment
Prakash Krishna, J.—The only question mooted in the above revisions is whether the ''coconut oil'' sold by the dealer applicant under the branded name ''parachute coconut oil'' is liable to be taxed under the entry of ''oils of all kinds'' or ''cosmetics and toilet requisites'', under the U.P. Trade Tax Act (hereinafter referred as the Act).
The dispute relates to the assessment years 1981-82, 1982-83, 1983-84 and 1984-85 (provincial). The dealer is carrying on the business of coconut oil, tooth powder etc. The coconut oil which is presently in dispute in these revisions was taxed at the rate of 12% treating it to be cosmetics by the Assessing Officer. The said order was challenged successfully in appeal before the Deputy Commissioner (Appeal) who held that ''parachute branded oil'' is liable to be taxed under the category of ''oils of all kinds''. The department challenged the legality and propriety of the order of the first appellate authority by filing second appeals Nos. 147 of 1987, 150 of 1989, 209 of 1989 and 190 of 1990 for the assessment years 1981-82 to 1984-85 respectively. The Tribunal after examining the matter with some detail allowed the appeals by setting aside the order of the first appellate authority and restored back the matter to the Assessing Authority with certain directions contained therein. Challenging the findings recorded by the Tribunal, the present revisions have been preferred by the dealer. In the memo of revisions, the following questions of law have been sought to be raised:
(i) Whether the Trade Tax Tribunal is legally justified in law in completely over-looking the relevant Notifications, as also the various decisions and material evidence placed by the applicant Company in support of its case in deciding the issue involved in the present case.
(ii) Whether the Trade Tax Tribunal is correct in law, on one hand recording its finding that the product manufactured and sold by the applicant Company, is Coconut Oil which is covered under the various notifications but while concluding the issue, forming its own view on the basis of the Brand Name used by the applicant Company and holding that the goods manufactured is not covered under the head of definition of "Oils of all kinds.
(iii) Whether the Tribunal is legally justified in law in expressing its opinion against the applicant Company, as it appears and remanding the matter back to the assessing authority for fresh investigation.
(iv) Whether on the facts and circumstances of the case, the finding
recorded by the Tribunal is at all correct in the eyes of law.
(v) Whether in any view of the matter, the impugned order of the Tribunal is correct in the eyes of law as the Tribunal completely over-looked, even not recorded any finding of own regarding the findings recorded by the Deputy Commissioner, deciding the matter and allowing the appeal of the applicant Company.
(vi) Whether the Tribunal is legally correct in law in allowing the appeal filed by the Department, completely overlooking the facts as well as nature of the case and remanding the matter to the Assessing Authority overlooking the material aspect of the matter that the matter relates for the assessment year 1981-82 to 1984-85 i.e. to say, the matter is about 18 years old.
(vii) Whether in any view of the matter, the impugned order of the Tribunal is sustainable in the eyes of law.
However, the learned Counsel for the applicant confined his argument to the question with regard to the taxability of the commodity in question. The main plank of the argument is that the commodity in question is ''coconut oil'' and is liable to be taxed as ''oil of all kinds'' notwithstanding the fact that the dealer itself has represented to the public at large through advertisement including in T.V. Channel that the product is meant for use on hair.
Before proceeding further, it is relevant to notice the relevant entries in two competitive notifications. Entry No. 31 in notification No. 5785 dated 7-9-1981 reads as follows:
31 - Oils of all kinds, other than those M Or I 4% covered by any other entry of this list or by any other notifications issued under the Act
Entry No. 5 of notification No. 5784 dated 7-9-1981 reads as follows:
5 - All kinds of cosmetics and toilet preparations for beautification or care of the face, skin, hair, nails, M Or I 12% eyes or brows, but not including soaps, safety razor blades, hair combs, tooth pastes, tooth powders, and other dentifrices, tooth brushes and kumkum.
Learned Counsel for the applicant submits that ''coconut oil'' is an edible oil and is, therefore, taxable under entry No. 31 of notification No. 5785. He further submits that if the coconut oil is mixed with perfumes and is only used for beautification and toilet purposes, only then it shall fall under the category of ''cosmetics of all kinds''. Reliance upon various judgments noticed hereinafter in brief was placed to show that the coconut oil has always been treated by the department as falling in the category of ''oils of all kinds''. He also referred circular dated 7-11-1981 issued from the office of the Commissioner of Sales Tax wherein the Commissioner has informed the department that refined and filtered coconut oil is liable to be taxed under the category of ''oils of all kinds'' unless scent or any other fragrance bearing substance is added therein. The other circular is dated 9-12-1999 wherein it has been stated that the filtered coconut oil is liable to be taxed under the category of ''oils of all kinds''. Much emphasis was laid on an order of the Sales Tax Tribunal Kanpur Bench Kanpur in second appeal No. 413 of 1982 relevant to the assessment year 1976-77 in the case of M/S Tata Oil Company Ltd. wherein it has been held that tax liability on the filtered coconut oil shall be governed by notification No. 332 dated 15-11-1971 whereunder the rate prescribed is at 4%. It was held that the filtered coconut oil shall be placed in the category of ''oils of all kinds''.
Reliance on Chandausi Oil Mills Chandausi v. Sales Tax Commissioner 1961 (12) SCC 310 a Division Bench of this Court, wherein it has been held that edible means- fit to be eaten as food and, therefore, linseed oil being an Article fit for being eaten as food is clearly ''edible oil'' within the meaning of notification No. 923 dated 8-6-1948, was placed.
Reliance was also placed upon an order passed by the Trade Tax Commissioner, U.P. Lucknow in a proceeding u/s 35 of U.P. Trade Tax Act dated 6-1-1986 holding that coconut oil (pure and simple) is used for cooking purposes. In U.P. it is used as hair oil as well as edible oil. While determining the point of taxability of a particular commodity, its usability should be considered in a limited scope as expressed by the Hon''ble High court in the case of Commissioner of Sales Tax v. Ram Kumar Nand Kumar, Kanpur 1972 UPTC 736 in respect of taxability of coconut oil.
He further submits that in the case of the dealer for the earlier assessment years i.e. 1979-80 and 1980-81, the Tribunal followed its earlier judgment in the case of Tata Oil Mills, referred to above and has held that the coconut oil is taxable under the category of ''oils of all kinds''.
Having given careful consideration on the above submissions, I find no difficulty in holding that the coconut oil is edible oil and filtered coconut oil is liable to be taxed under the category of ''oils of all kinds''. This is one aspect of the matter that coconut oil is liable to be taxed under the category of ''oils of all kinds''. The other aspect of the matter is whether the coconut oil sold by the dealer in the relevant assessment years was sold to the customers as oil or cosmetics and toilet requisites, is a different matter. In none of the authorities relied upon and referred above, the question was how the commodity in question i.e. coconut oil sold by the dealer in particular has been considered even by the dealer itself and the customers in the market. The question is whether the purchasers purchased the commodity treating it as edible oil for eating purposes or have purchased with a different object in the mind i.e. other than eating purposes.
At this juncture, certain facts noticed by the Tribunal in the order and not disputed before this Court may be considered. The dealer is selling branded parachute coconut oil. It is being advertised on T.V. Channel and other media for the purpose of ''dark and long hair''. In the packing, it has been transcribed as follows ''this oil can be used directly or as base for perfume hair oil''.
It is being sold in the packing of 200 and 500 ml. The commodity in question has not been purchased by the trader dealing in edible oil. It has been further noticed that the commodity has been sold to small consumers at a much higher rate than the prevalent rate of edible oil. It is being advertised in T.V. and other media as ''hair oil'' and not as ''edible oil''.
On these facts, the question arises whether the commodity in question i.e. parachute coconut oil is liable to be treated as edible oil or as hair oil. This point has been considered in detail by a Division Bench of this Court in CST v. Chawla Stores 1976 UPTC 337 . Almost identical controversy was involved and the question was whether the perfumed hair oil manufactured and sold by the assessee therein is liable to be taxed under the entry of ''oils of all kinds'' or as ''hair oil''. Relying upon the judgment of the Apex Court in Sarin Chemical Laboratory Vs. Commissioner of Sales Tax, U.P., and State of Gujarat Vs. Prakash Trading Co., Ahmedabad, it was held that hair oil as the expression itself indicates is used for dressing hair. Its object is not only to keep tidy, promote its growth, check baldness but also to beautify appearance.
It was then contended that the commodity in question does not contain scent or fragrance. In support thereof reliance was sought to be placed on a report of an Analyst of Harcourt Buttler Technological Institute. There appears to be no evidence on record to show as to whether any perfume or scent is added in the commodity in question. The Analyst has only mentioned that practically no change in the original smell was noticed due to effect of heat at 50 to 60 degree centigrate for one hour on the original smell. This report is hardly of any significance and it does not throw any light on the controversy involved. Significantly, there is no mention in the entire report as to whether the commodity analysed by him contained smell of any kind or not at the room temperature.
It is an acknowledged legal position that while interpreting entries in Sales Tax Act, resort should not be taken to scientific or technical meaning . Popular meaning attached to the commodity by the persons those dealing in the commodity should be adopted. If any term or expression has been defined in the enactment then it must be understood in the sense it is defined but in the absence of any definition being given in the enactment, the meaning of the term in common parlance or commercial parlance has to be adopted.
In Ramavatar Budhiaprasad etc. Assistant Sales Tax Officer, Akola (1961) 1 SCR 279 the question was whether ''betel leaves'' fell within item ''vegetable'' so as to earn exemption from sales tax and it was held that word ''vegetable'' has not been defined in the Act, and that the same must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance and so construed it denoted those classes of vegetable matter which are grown in kitchen garden and are used for the table and did not comprise betel leaves within it and, therefore, betel leaves were not exempt from taxation.
In Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh, , the question was whether the item ''coal'' under Entry I of Part III of second Schedule to Madhya Pradesh General Sales Tax Act, 1958 included charcoal or not and it was 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 he had not to the scientific or the technical meaning of such terms hut to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense.
Viewing the question from the above angle, it was further observed that both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include ''charcoal'' in the term ''coal'' and held that ''charcoal'' fell within the concerned Entry No. 1 of Part III of Schedule II of the Act.
An interesting question arose before the Apex Court with regard to rate of taxability of clinical syringes in Indo International Industries v. Commissioner of Sales Tax, U.P. 1981 UPTC 481 wherein it was held that having regard to the well settled test the question is whether clinical syringes could be regarded as ''glass ware'' falling within Entry 39 of the First Schedule to the Act? It is true that the dictionary meaning of the expression ''glass ware'' is Article made of glass (See Websters New World Dictionary). However, in commercial sense glass ware could never comprise Article like clinical syringes, thermometers, lactometers, and the like which have specialised significance and utility. In popular or commercial parlance a general merchant dealing in ''glass ware'' does not ordinarily deal in Articles like clinical syringes, thermometers, lactometers, etc. which Article through made of glass, are normally available in medical stores or with the manufacturers thereof like the assessee. It is equally unlikely that consumer would ask for such Articles from a glass ware shop. In popular sense when one talks of glassware such specialised Articles like clinical syringes, theremometers, lactometers and the like do not come up to one''s mind. Applying the aforesaid test, therefore, it was held that the clinical syringes which the assessee manufactures and sells cannot be considered as ''glass ware'' falling within Entry 39 of the First Schedule of the Act.
As noticed above, the Supreme Court has held that vegetables being a word of every day use, it must be construed in its popular sense, that is to say, the meaning with which the people are conversant with the subject matter with which the statute is dealing would be attached to it and so the word was construed to denote those classes of vegetables which are grown in kitchen garden. It was held that betel leaves are not grown in kitchen garden and, therefore, is not vegetable. Similarly, sugarcane was excluded from the category of sugar product in Motipur Zamindary Co. (P) Ltd. Vs. The State of Bihar, . Chillies and lemons have been held to be vegetables in Mangulu Sahu Ramahari Sahu Vs. The Sales Tax Officer, Ganjam,
In CCE v. Krishna Carbon Paper Co. [ 1988 ] Su 12 (3) SCR 12 it has been held that consumers understanding of the expressions used in legislation relating to them is also an imput in judicial construction. Emphasis has been laid in construing entries of goods in Excise, Customs, Octroi or Sales Tax Act. Resort should normally be had not to the scientific or technical meaning but to their popular meaning i.e. the meaning attached to the expressions used by those dealing in them.
Applying the test of popular meaning it was held while construing Uttar Pradesh sales Tax Act, 1948 that tooth powder is a ''toilet requisite'' in Sarin Chemical Laboratory (supra).
The said decision has been followed in State of Gujarat v. Prakash Trading Co. (supra).
In Ganesh Trading Co., Karnal Vs. State of Haryana and Another, it has been held that popular meaning in the context of Sales Tax Act is that meaning which is popular in commercial circles for the Act essentially, in its working is concerned with the dealers who are commercial men. Rice and paddy were, therefore, held to be different commodity for the purpose of Punjab Sales Tax Act. It is not necessary to multiply the rulings as the controversy appears to be well settled except the case of Commissioner of Central Excise, Calcutta-IV Vs. Pandit D.P. Sharma, wherein it was laid down that "main criteria for determining classification is normally the use it is put to by the customers who use it." It was a case relating to classification of Banphool oil under the Excise Act. The dispute was whether the said product is classifiable as Ayurvedic medicament.
Taking into consideration the principle delineated above applicable to the interpretation of entries in fiscal statute, parachute coconut oil is liable to be classified and taxed under the entry of ''cosmetics and toilet requisites of all kinds''. It is being represented by the dealer as hair oil through advertisement and writing on the packing to the public. A judicial notice can be taken that the edible oil is not sold in a small packing of 200 or 500 ml. It is also relevant that the product in question has been sold much above the prevailing price of the edible oil. The product is being meant for application on hair to make them dark and long. Invoking the principle of common parlance and the usability of the product, in my opinion, it would be appropriate to tax the product in the category of ''all kinds of cosmetics and toilet requisites'' being hair oil. The Tribunal on this score is perfectly justified.
The other limb of the argument is that in the earlier assessment years, the Tribunal treated the product in question as edible oil and, therefore, it was not open for the department to contend otherwise in the subsequent years. In this connection reliance was placed upon a recent judgment of the Apex Court in the case of Ponds India Ltd. v. C.T.T. Lucknow 2008 (37) NTN 169. On a perusal of the order of the Tribunal in the earlier assessment years, it would show that the controversy as involved presently was not there. The Tribunal was called upon in the earlier assessment years to adjudicate as to whether coconut oil is liable to be taxed as edible oil or otherwise. The Tribunal opined that coconut oil as well as the filtered coconut oil is liable to be taxed under the category of ''oils of all kinds. The point that branded parachute coconut oil is to be taxed as ''oils of all kinds'' or as a ''hair oil'' was not there even remotely. Since the question involved presently was not involved in the earlier assessment years, the ratio relied upon the case of Ponds India Ltd. (supra) has hardly any application. It does not advance the case of the dealer. For the same reason, the circulars of the Commissioner of Sales Tax, judgment of the Tribunal and the order passed by the Commissioner u/s 35 of the Act do not posit the case of the dealer any further. In none of them the question as involved in the present revisions was there.
Apart from the above, these decisions have no binding effect on this Court as they are of, if any value, are either of Commissioner of the Tribunal, below the High Court.
The argument that entry of ''oils of all kinds'' being specific, the commodity in question will fall in the said entry is not at all attractive for the reason that both the entries i.e. ''oils of all kinds'' and ''all kinds of cosmetics and toilet requisites'' are general entries as observed by Division Bench of this Court in CST v. Chawla Stores (supra). The principle ''generabillus specialia derogant'' will not be applicable. Parachute coconut oil being hair oil is taxable as cosmetics and toilet requisites and even if there is no perfume or scent, as was alleged by the dealer for the first time before this Court, it is being used as ''hair oil'' by the customers.
Certain decisions were relied upon in support of the submission that if two interpretations are possible then one which is favourable to a dealer should be preferred. The said principle, on the facts of the present case, has hardly any application.
I see no application of Arya Vaidya Pharmacy and Anr. v. state of Tamil Nadu 1989(73) STC 346.
Learned Counsel for the dealer argued that having recorded all the findings against the dealer, no useful purpose is going to be served by remanding the matter back to the Assessing Authority. I find sufficient force therein. A bare perusal of the order of the Tribunal clearly shows that it has reached to the conclusion that the commodity in question is liable to be taxed as ''cosmetics and toilet requisites'' being hair oil, remanding the matter to the Assessing Authority for further probing is not of much significance. Even otherwise also, the dealer is bound by its representation that the product in question is meant for application on hair.
At the cost of repetition the undisputed fact that the commodity in question is sold in small packs and is not purchased as edible oil, the order of remand is not justified. The matters are now more than two decades old and, therefore, the portion of the order of the Tribunal which provides for remand of the case to the Assessing Authority needs interference and the same is set aside. The question No. 6 is decided accordingly.
In view of the above discussions, it is held that the Tribunal was justified in holding that Parachute coconut oil is liable to be taxed as ''hair oil'' and not under the category of ''oils of all kinds''. But it was not justified in remanding the matter to the Assessing Authority for further probing.
In the result, the revisions succeed and allowed in part so far as it relates to the portion of the order remanding the matter to the Assessing Authority is concerned. For the rest, the revisions are dismissed.
No order as to costs.