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PETITIONER: AVADH SUGAR MILLS LTD.

       Vs.

RESPONDENT: THE SALES TAX OFFICER, SITAPUR & ANOTHER

DATE OF JUDGMENT22/02/1973

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. REDDY, P. JAGANMOHAN KHANNA, HANS RAJ

CITATION:  1973 AIR 2440            1973 SCR  (3) 546  1974 SCC  (3) 271  CITATOR INFO :  D          1987 SC1316  (3,5)

ACT: U.P. Sales Tax Act 1948-Purchase tax on  oilseeds-Groundnuts whether oilseeds.

HEADNOTE: The  petitioner appellant purchased groundnuts  mostly  from cultivators   for  the  manufacture  of  oil.   Relying   on decisions  of  the Madhya Pradesh and Punjab High  Court  he contended  that  groundnuts were not oilseeds and  thus  not liable to be subjected to purchase-tax under the UP.   Sales Tax Act.  The Allahabad High Court rejected the  contention. In appeal by certificate, HELD  : In finding out the true meaning of  term  ’oilseeds’ found in the Sales-Tax law in question the Court must  refer not  to the, dictionary meaning but the meaning ascribed  to the  term in commercial parlance.  There can hardly  be  any doubt  that in commercial articles ground nut is dealt  with as oilseed.  The commercial journals refer to groundnuts  as a species of oilseeds, [547D-F] Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh, (19 S.T.C. 469), relied on. A seed is one which germinates.  It is not disputed that the groundnut germinates.  Hence it is undoubtedly seed.  It  is mostly used for the manufacture of groundnut oil which is an edible  oil.  The decision relied on by the  appellant  must accordingly  be  held to be wrong and the  appeal  must  be dismissed. [547F-G] Commissioner of Sales Tax, Madhya Pradesh, Indore v.  Bakhat Rai  &  Co. (18 S.T.C. 285) and Hans Rai Choudhri v.  J.  S. Rajyana,  Excise  and  Taxation Officer,  (19  S.T.C.  489), disapproved.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1352  of 1970. Appeal by certificate from the judgment and order dated  7th day  of August 1967 of the Allahabad High Court  in  Special

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Appeal ’No. 94 of 1967. M.   C. Chagla, Suresh Sethi, R. K. Maheshwari, Maya Krishan :and B. P. Maheshwari, for the appellant. N. D. Karkhanis- and O. P. Rana, for the respondents. The Judgment of the Court was delivered by HEGDE, J.-This is- an appeal by certificate’ The only  ques- tion  that  arises  for decision  is  whether  groundnut  is oilseed.  The High Court has come to the conclusion that the groundnut  is  oilseed.  The question is ’to the  nature  of groundnut came up, for consideration in connection with  the levy  of  purchase-tax  on the  purchase  of  oilseed.   The assessee  in  this  case is a manufacturer of  oil  and  the assessee appears to have purchased groundnuts in 547 large  quantity  for the manufacture of oil.   He  contended before the assessing authorities as well as before the  High Court,  unsuccessfully, that groundnut is not  oilseed.   In support of that contention, he relied on the decision of the Madhya  Pradesh  High Court in Commissioner  of  Sales  Tax, Madhya  Pradesh, Indore v. Bakhat Rai & Co. (18 S.T.C.  285) and the decision of a single Judge of Punjab & Haryana  High Court  in  Hans  Raj Choudhri v. J.S.  Rajyana,  Excise  and Taxation  Officer  (19  S.T.C. 489).   These  two  decisions undoubtedly  ’support his contention.  The learned Judge  of the  Allahabad High Court have not accepted those  decisions as  laying  down the law correctly and we are  in  agreement with  the view taken by the learned Judges of the  Allahabad High Court.. The  petitioner in his Writ Petition has  definitely  stated that he purchased groundnuts mostly from cultivators for the manufacture  of  oil.   Hence  there is  no  doubt  that  he purchased groundnut for the purpose of manufacturing oil. We  shall  now proceed to consider  whether  groundnuts  are seeds and further whether they are oilseeds.  In finding out the  true meaning of term "oilseeds" found in the  Sales-tax law  in question, we are not to refer to  dictionaries.   We are  to  find  out  the meaning ascribed  to  that  term  in commercial  parlance.   See the decision of  this  Court  in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh (19 S.T.C. 469).  There can hardly be any doubt  that in commercial. circles Ground nut is dealt  with as oilseed.  The commercial journals and newspapers  while quoting the market price of oilseeds list groundnuts as  one of the species of oilseeds.  From this, it is clear that  in commercial circles groundnut is treated as oilseed. A seed is one which germinates.  It is not disputed that the groundnut  germinates.  Hence it is undoubtedly  seed.   The next   question  is  whether  it  is  generally   used   for manufacture  of  oil.  Here again, there can hardly  be  any doubt that groundnut is Mostly. used for the manufacture  of groundnut oil which is used in the manufacture of Dalda  and other cooking media.  Groundnut is one of the items which is mostly  used in this country for the manufacture of  cooking media. In  our opinion, both the Madhya Pradesh High Court and  the Punjab  &  Haryana High Court ’were wrong in  holding  that’ groundnut is not oilseed. For  the reasons mentioned above, this appeal  is  dismissed with costs. G.C.                              Appeal dismissed. 548