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PETITIONER: STATE OF WEST BENGAL & ORS. ETC.

       Vs.

RESPONDENT: LAL CHAND AGARWALLA & ORS. ETC.

DATE OF JUDGMENT24/03/1987

BENCH: RAY, B.C. (J) BENCH: RAY, B.C. (J) THAKKAR, M.P. (J)

CITATION:  1987 AIR 1316            1987 SCR  (2) 621  1987 SCC  (2) 504        JT 1987 (1)   758  1987 SCALE  (1)584

ACT:                   Taxes  on  Entry of  Goods  into  Calcutta               Metropolitan Area Act, 1970 as amended in 1972               and 1974, section 6 read with Item 4 of Sched-               ule  thereto---Exigibility  to levy  of  Entry               tax-Words  and phrases-"Groundnut", whether  a               "nut’ within the description of the  specified               goods  under  the head "Class  I--Articles  of               food  and  drink-"Edibles"  attract  levy   of               duty--In  case the purpose of importer  is  to               extract  only  oil therefrom,  whether  exempt               from the levy.

HEADNOTE:                   Section  6 of the Taxes on Entry of  Goods               into  Calcutta  Metropulitan  Area  Act,  1970               provides for imposition of levy and collection               of taxes on the entry of every specified goods               into Calcutta Metropolitan Area (for  consump-               tion,  use  or sale therein)  from  any  place               outside  that area at such rate not  exceeding               the rates specified in the corresponding entry               in  Column  3  of the Schedule  as  the  State               Government may by notification specify.  CIasa               specifies articles liable to tax grouped under               the  caption  of  food and  drink.  Item  4(t)               specifies "nuts excluding beetal nuts" as  one               of  the items on which the rate of  entry  tax               has been specifically mentioned therein. Under               the  said  Class-l  in  item  No.4(u)  "oilman               stores  (except  edible oils)" has  been  men-               tioned and in Class-3 under heading (b),  item               No. 22 refers to oil seeds of inedible oils as               one  of the specified items for imposition  of               tax.                   The  respondents who are licensed  dealers               under the West Bengal Edible Oil Seed  Dealers               Licensing  Order, 1963 challenged the  imposi-               tion of entry tax on groundnuts imported  into               Calcutta Metropolitan Area for the purpose  of               manufacture of groundnut oil under the  provi-

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             sions  of  the Taxes on Entry  of  Goods  into               Calcutta  Metropolitan Area Act, 1970  on  the               ground that such importation of groundnuts  as               oil seeds is not subject to any levy under the               provisions  of  the said Entry Tax Act  in  as               much  as  there is no specific  provision  for               levy  on groundnuts as oil seeds for  manufac-               turing edible oil. The respondents prayed  for               a  mandate  directing the  appellants  not  to               impose  any entry tax on the ground that  they               are  edible nuts failing under specific  entry               01  edibles  provided in the Schedule  to  the               said Act, and with a further prayer for refund               of the taxes already imposed and collected  by               the               622               respondents.  A  learned Single Judge  of  the               Calcutta High Court issued a writ of  mandamus               as  prayed for. The State appeal  against  the               judgment  and  order  was  dismissed  and  the               judgment and order of the learned Single Judge               was  affirmed.  Hence the  appeal  by  special               leave.               Allowing the appeals, the Court,                   HELD: 1. On a plain reading of the  provi-               sions  of  the Taxes on Entry  of  Goods  into               Calcutta  Metropolitan Area Act, 1970,  it  is               clear and evident that groundnuts which answer               the description of nuts is excisable to  entry               tax under the said Act. Once the goods  answer               the  description of the item exigible to  tax,               under  Item  4(t) the importer of  such  goods               cannot  escape liability depending on the  use               to  which he puts. No question of  speculating               about intention of the legislature arises when               "nuts"  are in term specified as  goods  which               are  exigible  to tax  and  "groundnuts"  fall               under the description of "nuts". That  ground-               nuts  are nuts is not disputed nor  disputable               that  it  is  not so.  Groundnuts  are  "nuts"               whether  the same are consumed as they are  or               whether   they  are  crushed  for   extracting               oil--they  do not cease to be  nuts.  [626E-H;               627A-B]                   2.  The  legislative intent  to  tax  nuts               being very clear there is no room for  consid-               ering whether groundnut is also oil seed  used               for  manufacturing  edible oil,  "why"  it  is               imported  and whether it is exempt from  entry               tax on that account. Undoubtedly, nuts include               groundnut  also. Though the 1970 Act  was  re-               placed  by  the Taxes on Entry of  Goods  into               Calcutta Metropolitan Area, 1972 making  iden-               tical  provisions for the imposition of  entry               tax on specified goods entering into  Calcutta               Metropolitan Area, West Bengal Act XIX of 1974               specifically mentioned in SI.No.4 item No. (u)               for the words "nuts excluding betel nuts"  the               words  "nuts including groundnuts,  cashewnuts               and  walnuts but excluding betel  nuts"  shall               be,  and shall be deemed always to  have  been               substituted. [627B-G]                   3.  The words "nuts including  groundnuts,               cashewnuts  and  Walnuts but  excluding  betel               nuts" has been substituted retrospectively for

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             the words "nuts excluding betel nuts" in  item               No.  4(u). This amendment is clarificatory  in               nature  and makes explicit what  was  implicit               out  of abundant caution, and clearly puts  an               end to all controversies as to whether ground-               nuts imported into Calcutta Metropolitan  Area               from outside is liable to imposition of  entry               tax.  It makes patently clear that  groundnuts               as one of the "nuts" was always subject to the               imposition  of entry tax under the said  Entry               Tax   Act.  Therefore,  the  contention   that               groundnut imported into Calcutta Metropolitan               623               Area for the purpose of manufacture of ground-               nut  oil which is one of the edible  oils  and               which is exempted from the imposition of  levy               of entry tax cannot be sustained any longer in               view  of  the express provisions of  the  Act.               [627G-H; 628A-B]                   Avadh Sugar Mills Ltd. v. Sales Tax  Offi-               cer  &  Anr., [1973] (Vol. 31) STC  469  (SC),               distinguished.

JUDGMENT:                   CIVIL APPELLATE JURISDICTION: Civil Appeal               No. 1387 of 1973.                   From   the   Judgment  and   Order   dated               31.5.1973 of the Calcutta High Court in Appeal               from Original Order No. 612 of 1971.               WITH               CIVIL APPEAL NO. 4301 of 1984.                   From  the  Judgment and Order  dated  9.9.               1981 of the Calcutta High Court in Appeal from               Original Order (F.M.A.) No. 459 of 1980.               Govind  Das  and Mr. G.S. Chatterjee  for  the               Appellants.               D.N. Mukherjee for the Respondents in C.A. No.               1387 of 1973.                   A.K. Ganguli and Miss Mridula Ray for  the               Respondent in C.A. No. 4301 of 1984.               The Judgment of the Court was delivered by                   B.C.  RAY,  J. Civil appeal  No,  1387/73.               This  appeal by special leave is  against  the               judgment  and  order  passed  in  appeal  from               Original  Order No.612 of 1971 dated  May  31,               1973  by the Division Bench of the High  Court               of  Calcutta affirming the judgment and  order               of  the  learned Single Judge  made  in  Civil               Revision  Case No. 5805 of 1970. The  respond-               ents  who are licensed dealers under the  West               Bengal  Edible  Oil  Seed  Dealers   Licensing               Order, 1963 have challenged the imposition  of               entry tax on groundnuts imported into Calcutta               Metropolitan Area for the purpose of  manufac-               ture of groundnut oil under the provisions  of               the  Taxes  on Entry of  Goods  into  Calcutta               Metropolitan Area Act, 1970 on the ground that               such importation of groundnuts as oil seeds is               not  subject to any levy under the  provisions               of the said Entry Tax Act in as much as  there               is  no specific provision for levy on  ground-               nuts as oil seeds for manufacturing edible               624

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             oil. They have therefore prayed for a  mandate               directing  the  appellants not to  impose  any               entry  tax on the ground that they are  edible               nuts  failing under specific entry of  edibles               provides  in  the Schedule to  the  said  Act.               There was also a prayer or refund of the taxes               already imposed and collected by the  respond-               ents.                   The  learned single Judge who  issued  the               rule after hearing both the parties held  that               though  under SI. No. 4, item No. (t)  of  the               Schedule to the said Act, ’nuts’ was a  speci-               fied item for purposes of imposition of  entry               tax as shown in corresponding column No. 3  in               the  said Schedule yet the learned Judge  held               that since groundnut is oil seed for  manufac-               turing  edible  oil which is  not  subject  to               entry  tax,  the groundnut  imported  for  the               purpose  of extracting oil as oil seed by  the               dealers  was not subject to the imposition  of               entry  tax. It was further held that the  term               groundnut  might  answer  the  description  of               being  nuts used as edibles as also oil  seeds               for  edible oils. The legislature intended  to               impose levy on ’nuts’ imported as edibles  and               not  to cover such nuts imported as oil  seeds               for  edible oils. The rule was  made  absolute               with  costs and a writ of mandamus was  issued               directing the appellants herein not to  impose               any levy under the provisions of the said Act.               There  was  also a further  mandate  upon  the               appellants herein directing them to refund all               taxes realised under the said Act on groundnut               imported   by  the  petitioners,   respondents               herein into Calcutta Metropolitan Area.                   Against this judgment and order the appel-               lant State of West Bengal preferred an appeal.               This appeal was dismissed and the judgment and               order  of  the learned single  Judge  was  af-               firmed. It was held that the intention of  the               legislature  was that edible oil or oil  seeds               would  not be liable to tax. The Court  refer-               ring to the decision in Avadh Sugar Mills Ltd.               v. Sales Tax Officer & Anr., [1973] (Vol.  31)               STC 469 (S.C.) held that in commercial  circle               ’groundnut’  was  treated as  ’oil  seed’  for               manufacture of oil. It did not refer to ’nuts’               as  such, and as such groundnut did  not  fail               with the ambit of entry tax as provided in the               said Entry Tax Act. Against this judgment  and               order the instant appeal on special leave  was               filed.                   The  sole question that poses  itself  for               consideration   in  this  appeal  is   whether               groundnuts  falling within the description  of               ’nuts’  in Schedule in Class-l, item No.  4(t)               is liable to be taxed under the Taxes on Entry               of Goods into Calcutta Metropolitan Area  Act,               1970  in  case the purpose of importer  is  to               extract  oil therefrom. It has been  urged  on               behalf  of the respondents that oil  seeds  or               edible oils are not               625               specified items for the purpose of  imposition               of  entry tax under section 6(1) of  the  said

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             Act. The importation into Calcutta  Metropoli-               tan Area of groundnuts by the respondents  for               the purpose of manufacturing groundnut oil  is               exempt from the levy of entry tax according to               them. It is necessary to quote here the  rele-               vant  provisions of the Schedule for the  pur-               pose of determining this question.                ................................................... .........                  Serial     No.         Specified      goods               Rates of tax                  1                                         2               3                ................................................... .....               X             X          X          X    Class               I--Articles of food                                                 and drink               4. Edibles--               X             X                X     X               t.  nuts, excluding betal nuts         6  per-               cent ad valorem               u.  oilman stores (except          ( 1/2  per-               cent ad valorem               edible  oils)                        for   dry               fruits)                                         -do-                       x                  x                 x               x          x               Class-III. Articles for industrial               use and articles used for fuel,               lighting, washing and polishing.               A .-- Articles for industrial use                       and articles used for fuel.               X                          X                 X               X               16. Mineral oils of all sorts--               X                         X                  X               X                 (xii)  Turkey red oil,  bye-products       2               paise per litre                 of mineral oils                   x                                        x               x                   (b)  Crude  oil                          1               paise per litre               (c)  grease, petroleum jelly        2  percent               ad valorem                                                  B  .--Arti-               cles used for                                                  0lighting.               x               22.  Oilseeds for inedible oils      50  paise               per 50 kilograms                   Section  6  of the said Act  provides  for               imposition of levy and collection of taxes  on               the  entry of every specified goods into  Cal-               cutta Metropolitan Area (for consumption,  use               or  sale therein) from any place outside  that               area  at  such rate not  exceeding  the  rates               specified in the corresponding entry in column               No. 3 of this Schedule as the State               626               Government  may by notification  specify.  The               State Government specified the goods entry  of

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             which into Calcutta Metropolitan Area will  be               liable  to  tax  under this Act  at  the  rate               specified in corresponding column No. 3 of the               Schedule. On a reading of the aforesaid Sched-               ule  it  is  clear and  evident  that  Class-I               specifies articles liable to tax grouped under               the  caption of food and drink. Item No.  4(t)               specifies nuts excluding betel nuts as one  of               the  items on which the rate of entry tax  has               been specifically mentioned therein. Under the               said  Class-I in item No. 4(u)  oilman  stores               (except edible oils) has been mentioned and in               Class-3  under heading (B) item No. 22  refers               to  oil  seeds of inedible oil as one  of  the               specified items for imposition of tax. It  has               been urged on behalf of the respondents that a               edible  oils are exempted from  imposition  of               tax  under  the said Act  groundnut  which  is               imported  by the respondent dealers from  out-               side the State into Calcutta Metropolitan Area               for  the purpose of manufacture  of  groundnut               oil  is exempted from the imposition of  entry               tax. It has been further urged in this connec-               tion  that  a  very  negligible  quantity   of               groundnuts  is used for edible  purposes.  The               ground  nuts are generally used as  oil  seeds               for  the purpose of manufacturing  edible  oil               i.e. groundnut oil. It has been submitted that               though  groundnut is included within  nuts  in               item  No. 4(t) yet it was rightly held by  the               Courts  below  that ground nuts  used  as  oil               seeds  for  the  purpose  of  manufacture   of               groundnut oil is free from imposition of entry               tax  and  as such the appeal  should  be  dis-               missed. This contention of the learned counsel               on  behalf of the respondents cannot  be  sus-               tained in as much as ’nuts’ has been specified               as  one of the items liable to be taxed  under               4(t)  for imposition of tax at the  rate  men-               tioned in corresponding column No. 3. So on  a               plain  reading  of the said provisions  it  is               clear and evident that groundnuts which answer               the description of nuts is excisable to  entry               tax  under the said Act. It is unnecessary  to               go  into the question as to whether  groundnut               is  also  used for the purpose  of  extracting               edible oil. The observations of this Court  in               the  case of Avadh Sugar Mills Ltd.  v.  Sales               Tax Officer & Another (supra) wherein  ground-               nut has been taken as oil seed for the purpose               of U.P. Sales Tax Act. This has no beating for               the  purpose of imposition of entry tax  under               the  said Entry Tax Act, 1970 as it  has  been               mentioned already hereinbefore that under item               No.  4(t)  ’nuts’ has been  specifically  men-               tioned  as one of the specified goods for  the               imposition of entry tax. Once the goods answer               the  description of the item exigible to  tax,               the  importer  of  such  goods  cannot  escape               liability  depending  on the use to  which  he               puts. No question of speculating about  inten-               tion of the legislature arises when ’nuts’ are               in term specified as goods which are  exigible               to  tax  and ’groundnuts’ fall under  the  de-               scription of ’nuts’. That groundnuts are

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             627               nuts is not disputed nor disputable that it is               not so. An extract from Encyclopedia Britanni-               ca also leaves no room for doubt on this score               and even the contention of the respondents  is               not  that groundnuts are not ’nuts’  but  that               when same are imported for extracting oil  the               same  are not exigible to tax. Groundnuts  are               ’nuts’  whether the same are consumed as  they               are or whether they are crushed for extracting               oil--they  do not cease to be nuts. The  relevant extract is appended below as appendix "A".     The  legislative  intent to tax nuts  being  very  clear there  is no room for considering whether groundnut is  also oil  seed  used  for manufacturing edible oil  ’why’  it  is imported  and  whether it is exempt from entry tax  on  that account.  Undoubtedly,  nuts  include  groundnut  also.  The contention  of the respondents in our considered opinion  is totally devoid of any merit and as such it is overruled.  It is very relevant to mention here that the Taxes on Entry  of Goods into Calcutta Metropolitan Area Act, 1970 was replaced by  the Taxes on Entry of Goods into  Calcutta  Metropolitan Area Act, 1972 (West Bengal Act V of 1972). In the said  Act identical  provision  has been made for  the  imposition  of entry  tax on specified goods entering into Calcutta  Metro- politan  Area’,  at  the rates  specified  in  corresponding column  No. 3 of the items mentioned in the Schedule.  Class I,  item 4(u) specifies edible nuts excluding betel nuts  as was in the previous Act of 1970. In Entry No. 22 under Class IV  oil  seeds of vegetable oils other than  mustard,  rape, groundnut  etc.  was mentioned. In item No. 24 of  the  said Class  IV vegetable oils, other than mustard oil,  groundnut oil  etc.  has been specifically mentioned. So this  Act  of 1972  also specifically mentions ’nuts’ as one of the  goods entry of which into Calcutta Metropolitan Area is subject to the levy of entry tax. This Act of 1972 was further  amended in  1974 by West Bengal Act XIX of 1974. By the said Act  it has been specifically mentioned in the Schedule to the Taxes on Entry of Goods into Calcutta Metropolitan Area Act,  1972 in  S1.  No. 4, item No. (u) for the words  ’nuts  excluding betel nuts’ the words ’nuts including groundnuts, cashewnuts and  walnuts but excluding betel nuts’ shah be, and shah  be deemed always to have been, substituted. In other words, the words ’nuts including groundnuts, cashewnuts and walnuts but excluding  betel nuts’ has been substituted  retrospectively for the words ’nuts excluding betel nuts’ in item No.  4(u). This amendment is clarificatory in nature and makes explicit what was implicit out of abundant caution, and clearly  puts an end to all controversies as to whether groundnuts import- ed into Calcutta Metropolitan Area from outside is liable to imposition  of  entry  tax. It  makes  patently  clear  that groundnut as one of the ’nuts’ was always 628 subject to the imposition of entry tax under the said  Entry Tax Act. The contention that groundnut imported into Calcut- ta  Metropolitan  Area  for the purpose  of  manufacture  of groundnut  oil which is one of the edible oils and which  is exempted from the imposition of levy of entry tax cannot  be sustained  any longer in view of the express  provisions  of the Act.     Considering all these facts and circumstances as well as considering that nuts excluding betel nuts being one of  the specified  goods mentioned in the Schedule to the  said  Act clearly  bring  within  its field  groundnut;  so  groundnut imported  into Calcutta Metropolitan Area is liable  to  the

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imposition  of  entry tax under the said Entry Tax  Act.  We therefore  allow this appeal and set aside the judgment  and order  passed in Appeal from Original Order No. 612 of  1971 without any order as to costs. The writ petition giving rise to the appeal will stand dismissed.     In  Civil Appeal No. 4301 of 1984 the respondent made  a similar  challenge that groundnut which the  petitioner  im- ported  from  outside the State into  Calcutta  Metropolitan Area could not be subjected to the levy of entry tax as  the same  is used as oil seed for manufacturing edible oil  i.e. groundnut oil which is exempted from the incidence of  entry tax  under  the said Act.. This challenge was made  in  1974 when the Taxes on Entry of Goods into Calcutta  Metropolitan Area Act, 1972 as amended by the Amendment Act (West  Bengal Act  XIX of 1974) came into operation. We have already  men- tioned  hereinbefore  that in the Schedule to the  Taxes  on Entry of Goods into Calcutta Metropolitan Area Act, 1972  in S1.  No.  4, item (u) for the words  ’nuts  excluding  betel nuts’  the words ’nuts including groundnuts, cashewnuts  and walnuts but excluding betels’ shall be deemed always to have been  substituted. In other words, this amendment  has  been given retrospective effect and groundnut being  specifically mentioned  in SI. No. 4(u) of the Schedule to the said  Act, there  is  no scope for any  controversy  that  ’groundnuts’ imported  into  Calcutta Metropolitan , Area are  liable  to entry tax under the provisions of the said Act.     In  this  view  of the matter this  judgment  will  also govern  Civil  Appeal  No. 4301 of  1984  wherein  identical questions  have  been raised. This appeal  is  also  allowed without any order as to costs. The writ petition giving rise to  the  appeal  will stand dismissed with no  order  as  to costs. S.R.                                           Appeals   al- lowed. 629             Book Name: ENCYCLOPAEDIA BRITANNICA              Volume 16 Napoleon I to Ozonolysis             (Page 797 Nusaybin-NUI) Edition 1768     NUT, generally any seed or fruit consisting of a kernel, usually  oily, surrounded by a hard or brittle  shell.  Most edible  nuts,  e.g., walnut, brazil nut, peanut,  etc.,  are well  known  as  dessert nuts. Not all  nuts,  however,  are edible;  some are used as sources of oil or fat and  may  be regarded as oil seeds (see Oil Plants); others are used  for ornaments.  The  botanical  definition of a  nut,  based  on morphological  features, is more restrictive: a  hard,  dry, one-called  one  seeded fruit that does not  split  open  at maturity.  Among  the nuts that fit both the  botanical  and popular  conception  are the acorn,  chestnut  and  filbert; other so-called nuts may be botanically seeds (Brazil nuts), legumes  (peanuts)  or drupes (almond,  coconut,  pecan  and walnut),  In this article the term nut will be used  in  its broadest sense unless otherwise indicated. 630