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PETITIONER: COMMISSIONER OF SALES TAX U.P.

       Vs.

RESPONDENT: M/S.  S. N. BROTHERS, KANPUR

DATE OF JUDGMENT02/11/1972

BENCH: DUA, I.D. BENCH: DUA, I.D. REDDY, P. JAGANMOHAN

CITATION:  1973 AIR   78            1973 SCR  (2) 852  1973 SCC  (3) 496  CITATOR INFO :  RF         1977 SC 132  (15)  D          1977 SC 597  (41)  R          1988 SC2176  (4)  R          1988 SC2229  (9)  RF         1990 SC1579  (44)  RF         1991 SC 494  (3)

ACT: U.P. Sales Tax Act (15 of 1948) s. 3 and Notification  under s.  3A  ’Food  colors’  if  ’dyes  and  colors’  and  ’Syrup essences’ if ’scents and perfumes’

HEADNOTE: Item  10 of the notification under s. 3A of  U.P.  Sales-tax Act,  1948, referred to ’dyes and colors’  and  compositions thereof,  and  item  37  to  ’scents  and  perfumes’.    The respondent (dealer) imported from outside U.P., food  colors and  syrup  essences.   The appellant  held  that  the  food colors  fell  under item 10 of the  notification  and  syrup essences  under item 37 of the notification, and  that  they should  be taxed at six paise per rupee under the Act.   The dealer  contended  that  the tax on food  colors  and  syrup essences  should  be at the rate of two paise per  rupee  as unclassified goods under s.3 of the Act.  The High Court, in reference, agreed with the dealer’s contention. Dismissing the appeal to this Court, HELD : The words ’dyes and colors’ and the words ’scent  and perfumes’  have to be construed in their context and in  the sense as ordinarily understood and attributed to these words by people usually conversant with and dealing in such goods. Similarly,  the  words ’food colors’ and  ’syrup  essences’, which  are descriptive of the class of goods, the  sales  of which are to be taxed under the Act, have to be construed in the  sense in which they are popularly understood  by  those who  deal  in  them and who purchase and  use  them.   ’Food colors’ and ’syrup essences’ are edible goods, whereas ’dyes and  colors’  and  ’scents and perfumes’,  as  specified  in entries 10 and 37, prima facie do not connote that they  are edible  goods.  The scheme of the list in  the  notification also  suggests that, apart from undoubted edible  goods,  in cases where the import of the specified goods is wide enough to  include both edible and non-edible categories, then  the

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intention  has been clearly expressed whether or not to  in- clude  edible goods.  Therefore, entries 10 and 37  are  not intended  to extend to edible colors like ’food colors’  and edible  essences like ’Syrup essences’.  In any  event,  the view  taken  by the High Court is not so  grossly  erroneous that it should be interfered with in a special leave  appeal under Art. 136. [856 F-G; 858 D-E, F-H; 859 A-B] Sarin  Chemical  Laboratory  v. Commissioner  of  Sales  tax [1970]  26  S.T.C. 330, Ramvatar  Budhiprasad  v.  Assistant Sales Tax Officer, Akola, [1961] 12 S.T.C. 286, Commissioner of  Sales  Tax.  M.P. Indore v. Jaswant Singh  Charan  Singh [1967]  19  S.T.C. 469 and Sales Tax  Commissioner  U.P.  v. Ladha Singh Mal Singh, [1971] 28 S.T.C. 325 referred to. Kishan  Chand  Chellaram  v. Joint  Commercial  Tax  Officer Chintradripet, [1968] 21 S.T.C. 367 approved.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  2088  of 1969. Appeal  by special leave from the judgment and order,  dated April  3, 1969 of the Allahabad High Court in S. Y.  R.  No. 306 of 1967. 853 S. C. Manchanda and O. P. Rana for the appellants. A. K. Sen, K. P. Gupta and Champat Rai for the respondents. The Judgment of the Court was delivered by DUA, J.-This appeal by the Commissioner of Sales Tax,  Uttar Pradesh  is  by special leave and is  directed  against  the judgment of the Allahabad High Court answering the following question  in  the  negative  in  favour  of  the  respondent (hereinafter called the dealer) and against the Commissioner of Sales Tax, appellant               "Whether the food color and essence are  under               the  circumstances  items to  be  taxed  under               section  3A  within the notification  No.  ST-               905/X dated March 31, 1956 ?" The  dealer carries on the business, inter alia, of  selling food colors and syrup essences.  The dealer also carries  on the  business  of petroleum jelly but we are  not  concerned with that item in this appeal nor are we concerned with  the sales  of imported scents and perfumes which,  according  to the order of the Sales Tax Officer, were separately shown in the  statement filed by the dealer, ,during  the  assessment proceedings  for  the year 1960-61.  For the said  year  the Sales  Tax  Officer  taxed food colors  and  syrup  essences imported  by the dealer from outside Uttar Pradesh under  s. 3A of U.P. Sales Tax Act, 15 of 1948 (hereinafter called the Act)  treating  them as imported colors and  perfumes.   The figures of the dealer’s trading account were accepted by the Sales  Tax  Officer.  The dealer, according  to  whom,  food colors  and  syrup essences being  unclassified  goods  were taxable  under  s.  3  and  not under  s.  3A  of  the  Act, unsuccessfully  appealed against the order of the Sales  Tax Officer  to the Assistant Commissioner (Judicial); II  Sales Tax,  Kanpur.   Further revision to the Court of  the  Judge (Revisions)  Sales  Tax,  Lucknow  also  failed.   It   may, however, be pointed out that for the assessment year 1957-58 the  Appellate  Authority  had,  in  disagreement  with  the assessing officer, held food colors and essences of syrup to be unclassified items and had granted the relief claimed  by the   dealer.   Against  that  decision  of  the   Appellate Authority  the Department preferred a revision to the  Court of  the Judge (Revision), Sales Tax.  Both these  revisions,

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by the Department with respect to the assessment year  1957- 58  and  by the dealer with respect to the  assessment  year 1960-61  were heard together and disposed of by  the  common order dated November 19, 1965.  The dealer’s application for reference  was,  however,  allowed  and  the  learned  Judge (Revisions).   Sales Tax referred for determination  of  the Allahabad   High  Court  "he  question  reproduced  in   the beginning of this Judgment.  The High Court agreed with  the dealer’s contention and held food colors and syrup  essences not to fall within the entries at items nos. 10 and 854 37  of  the  Notification  under S.  3A  of  the  Act.   The reference  was  accordingly  answered in  the  negative  and against the Department.  The only question which now’  falls for determination is the one referred to the High, Court and which  has  already been reproduced.  There  is  no  dispute about the turnover.  The dealer claims that on imported food colors  and syrup essences the rate of tax should be  2  nP. per  rupee  as  unclassified  goods  under  S.  3,   whereas according  to the Commissioner the tax should be 6  nP.  per rupee  under  s.  3A of the Act.   Section  3  provides  for liability to tax under the Act whereas section 3A, which was inserted  by  U.P. Act 25 of 1948 and  has  thereafter  been amended from time to time, deals with single point taxation. Section 3A reads :               "3-A.     Single   point   taxation   :    (1)               Notwithstanding anything contained in  Section               3,  the State Government may, by  notification               in  the  official Gazette,  declare  that  the               turnover  in respect of any goods or class  of               goods  shall  not be liable to tax  except  at               such  single point in the series of  sales  by               successive dealers as the State Government may               specify.               (2)   If   the   State  Government   makes   a               declaration  under  sub-section  (1),  it  may               further  declare that the turnover in  respect               of  such goods shall be liable to tax at  such               rate not exceeding ten naya paise per rupee as               may be specified.               (3)   Every   notification  made  under   this               section shall be laid     before           the               Legislative  Assembly of the State as soon  as               may  be after it is made and if  a  resolution               amending  or  modifying it is  passed  by  the               Assembly  within  the session in which  it  is               laid,  it shall, from the date of  passing  of               the   resolution,  be  amended   or   modified               accordingly  but  without  prejudice  to   the               validity of anything previously done or of any               liability incurred or assessment made." On  March  31, 1955 the Governor of Uttar Pradesh  issued  a notification in exercise of the powers conferred by s. 3A of the  Act.   That  notification so far as  relevant  for  our purpose reads :               "Notification  No. ST-905/X dated 31st  March,               1955.               In exercise of the powers conferred by section               3A of the U.P. Sales Tax Act, 1948 as  amended               from  time to time and in supersession of  all               previous  Notifications  on the  subject,  the               Governor of Uttar Pradesh is hereby pleased to               declare  that the turnover in respect  of  the               good,,  specified in the List below shall  not               with  effect from April 1, 1956, be liable  to

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             tax "cept-(a)               855               in  the  case of goods imported  from  outside               Uttar  Pradesh  at the, point of sale  by  the               importer; and               (b)   in  the  case of goods  manufactured  in               Uttar  Pradesh  at the point of  sale  by  the               manufacturer;  and  the  Governor  is  further               pleased  to declare that such  turnover  shall               with effect from the said date be taxed at the               rate of one anna per rupee.                LIST               10.   Dyes   and   colors   and   compositions               thereof.               37.   Scents and perfumes. The  narrow point requiring decision is whether good  colors and syrup essences imported by the dealer from outside  U.P. fall within the entries 10 and 37 respectively.  If they do, then the appeal of the Department has to succeed and if they do  not then the appeal must fail.  As noticed  earlier  the High  Court  has in the impugned judgment,  in  disagreement with the view taken by the Sales Tax Officer, the  Assistant Commissioner  (Judicial)  and the Judge  (Revisions),  Sales Tax,  held that the food colors and essences do not fall  in the entries at items 10 and 37 of the Notification.  This is how   the   High  Court  has  dealt  with   the   point   in controversy:--               "The notification with which we are  concerned               in  the instant case is notification no.   ST-               905/1 dated March 31, 1956.  Item nos. 10  and               37 of that notification read as follows :               ’10.  Dyes and colors and composition thereof.               37. Scents and perfumes.’               The case of Commissioner of Sales Tax is  that               food colors would fall under item no. 10 i.e.,               ’dyes and colors and composition thereof’  and               essence would fall in the entry given in  item               no.  37  i.e., ’scents  and  perfumes’.   Food               colors  are edible, articles.  The  expression               ’dyes and colors and composition thereof’ does               not  relate  to  item  of  food  but  only  to               coloring  and dyeing material  i.e.,  material                             for  color washing or color painting o r  dyeing               of  fabrics.   In our opinion,  it  stands  in               contradistinction   to   bleaching   material.               Similarly, the entry at item no 37 relates  to               articles  which  cater to the  smelling  sense               i.e., those which appeal to nose.  Essence  is               a  flavoring material and its function  is  to               add  flavor to the food i.e., to make it  more               palatable.  It appeals to the tongue or to the               palate.   By  scents and  per-fumes  is  meant               articles   of  perfumery.   In  our   opinion.               therefore, the food colors and essences  would               not  fall in the entries at items nos. 10  and               37 of the notification               856               aforesaid.   In our opinion they could not  be               taxed under section 3A but under section 3  of               the Act." Shri Manchanda, learned counsel for the appellant,  assailed the reasoning and approach of the High Court.  According  to him the words "dyes and colors" in entry no. 10 of the  List in  the Notification in question and the words  "scents  and

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perfumes"  in entry no. 37 of the said List are  unqualified and there being no limitation discernible on their plain and general  meaning,  they must be held to be  wide  enough  to cover  ’food  colors’   and ’syrup  essences’.   In  seeking support for this submission reference was made to the Random House  Dictionary  of  the  English  Language  (prepared  in U.S.A.) for ascertaining the meanings of the words "  color" (color,  as spelt in this dictionary), "dye" and  "essence", as  also to Encyclopedia Britannia Vols. 8 & 17  and  Corpus Juris  Secunduin,  Vols.  28 and 70 for  the  same  purpose. Strong reliance was placed on the decision of this Court  in Commissioner  of Sales Tax U.P. v. Indian Herbs  Research  & Supply  Co.(1)  in  which the word  "perfume"  was  held  to include  "dhoop" and "dhoop batti".  The word "perfume",  it may  be recalled occurs in the entry no. 37 of the  List  in the Notification in question. In our opinion the Random House Dictionary cannot serve as a safe  guide in construing the words used in the List in  the Notification in question for the purpose of deciding whether or  not the words used in entries nos. 10 and 37 cover  food colors and syrup essences : indeed this Dictionary is apt to be  a somewhat delusive guide in understanding the  meanings of the words and expressions with which we are concerned  in the  context in which they are used.  This Dictionary  gives all  the  different shades of meanings attributable  to  the words  referred  but that is hardly helpful in  solving  the problem raised in the present controversy.  The words- "dyes and  colors" used in entry no. 10 and the words "scents  and perfumes" used in entry no. 37 have to be construed in their own  context and in the sense, as ordinarily understood  and attributed to these words by people usually conversant  with and  dealing  in  such goods.   Similarly  the  words  "food colors"  and "syrup essences" which are descriptive  of  the class of goods the sales of which are to be taxed under  the Act  have  to be construed in the sense, in which  they  are popularly  understood  by  those who deal in  them  and  who purchase and use them.  The respondent’s learned counsel has in  support of this view referred us to some decided  cases. In  Kishan Chand Chellaram v. Joint Commercial Tax  Officer, Chintradripet(2) a Bench of the Madras High Court held  that Terylene, Terene, Decorn, Nylon, Nylex etc., came within the expression "artificial silk" occurring at item no. 4 in  the Third  Schedule to the Madras General Sales Tax  Act,  1959. In the course of the judgment in (1) (1970) 25 S.T.C. 151. (2) (1968) 21 S.T.C. 367. 857 that  case  it was observed that the import and  content  of those words have not been defined in the Sales Tax Acts  and the  Courts  are  bound  to have  recourse  to  the  meaning attributable to such words by persons who are dealing in and utilising such goods.  The extreme, peculiar and  scientific meaning of the goods which might sometimes deviate from  the popular  meaning,  cannot prevail.  The  meaning  which  the trade,  Government officials and statutes attribute  to  the words "artificial silk" was considered by the High Court  to be the ordinary and popular meaning of that expression.   In Sarin  Chemical Laboratory v. Commissioner of  Sales  Tax(1) this Court held tooth powder to be a "toilet requisite"  and liable to sales tax at a single point under s. 3A of the Act read  with entry no. 6 of the: notification, with which  we, are  also concerned in the present case, it  being  observed that  the  names of the, articles, sales and.  purchases  of which  are  liable to be taxed, given in a  statute,  unless defined in the statute, must be construed not in a technical

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sense  but  as  understood in common  par  lance.   In  this decision  reference was made to an earlier decision of  this Court  by five Judges in Ramvatar Budhiprasad  v.  Assistant Sales Tax Officer Okola (2 in which "betel leaves" were  not considered  as "vegetable".  In Commissioner of  Sales  Tax, M.P. Indore v. Jaswant Singh Charan Singh(3) the word "coal" was  held  by  this Court to include  "charcoal",  it  being observed that, while interpreting items in statutes like the Sales  Tax Acts, resort should be had not to the  scientific Or  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  the course   of  the  judgment,  after  referring   to   certain decisions, including the decisions from Australian, Canadian and English Courts, it was observed :               "The  result emerging from these decisions  is               that while construing the word "coal" in entry               1  of Part III of Schedule 11, the  test  that               would be applied is what would be the  meaning               which persons dealing with coal and  consumers               purchasing it as fuel would give to that word.               A  sales tax statute, being one levying a  fax               on  goods must, in the absence of a  technical               term or a term of science or art, be  presumed               to   have  used  an  ordinary  term  as   coal               according  to  the meaning ascribed to  it  in               common parlance.  Viewed from that angle  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’. It  is  only               when  the question of the kind or  variety  of               coal  would arise that a distinction would  be               made between coal and charcoal; other-               (1)  (1970)26S.T.C.339.     (2)    (1961)   12               S.T.C. 286.               (3)   (1967) 19 S.T.C. 469.               858               wise  both of them would in ordinary  parlance               as also in their commercial sense be spoken as               coal." It may be pointed out that the entry in the case cited  read "coal  including  coke  in all its  forms".   In  Sales  Tax Commissioner/  U.P.  v.  Ladha  Singh  Mal  Singh(1)   cloth manufactured by means of power-looms was held by this  Court not to fall within the words  " cloth manufactured by mills" in  the Notification dated June 8, 1948, issued under s.  3A of the Act and the sale of such cloth was held not liable to be taxed at the higher rate of 6 ps. in a rupee.   According to  this  decision power-loom cloth in popular  language  is never associated with mill cloth.  In view of these and some other  decisions the learned counsel for the  appellant,  it may be said in fairness, did not dispute that the words with which we are concerned must be construed in the sense  which is  imputed  to  them by the persons who  deal  in  and  who consume such articles. "Food  colors"  and "syrup essence" being  themselves  known articles  of  common use, the question  arises  whether  the words and expressions used in entries 10 and 37 of the  List are intended to take within their fold goods popularly known in common parlance by the names of "food colors" and  "syrup essences". It  cannot  be  gain  said that  "food  colors"  and  "syrup essences"  are  edible goods whereas "dyes  and  colors  and

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compositions thereof" and "scents and perfumes" as specified in  entries  nos. 10 and 3 7 of the List do not  seem  prima facie  to connote that they are edible goods.  This  is  the reasoning of the High Court and it appears to us to be  both logical and rational.  Indeed, except for items like  ’salt’ in  entry no. 34, the "sugar manufactured by  mills’  (entry no.  49)  and  "Banaspati, including  refined  coconut  oil" (entry no. 43) which is capable of being used as medium  for cooking is prima facie edible there does not seem to be  any other  edible  article included in the List.   Item  no.  25 speaks  of  "Oils  of  all  kinds  other  than  edible  oils manufactured  on  Ghanis by human or  animal  power".   This scheme suggests that, apart from the undoubted edible goods, in  cases  where the import of the specified goods  is  wide enough  to include both edible and non-edible category  then the  intention has been clearly expressed whether or not  to include  edible goods.  How in the case of entries  nos.  10 and  37 we are inclined to think in agreement with the  High Court  that  these  entries are not intended  to  extend  to edible  colors like food colors and to edible essences  like syrup  essences.  It would indeed be straining the  meanings of the words and expressions in those entries as  understood in  popular  commercial sense to include edible  colors  and essence-,.  If the intention of the State Government was  to include  food colors in entry no. 10 and syrup  essences  in entry no. 37 then in our view these goods could easily  have been (1)  (1971) 28 S.T.C. 325. 859 specified by their own popularly known description.  In  any event assuming that another view as to the meaning of  these entries is possible we have not been persuaded to hold  that the  view taken ’by the High Court is so  grossly  erroneous that we should interfere on special leave appeal under  Art. 136 of the Constitution. Shri Manchanda made a passing reference to the Prevention of Food  Adulteration Rules, 1955 framed under ss. 4 and 23  of the  Prevention  of Food Adulteration Act, 37  of  1954  and pointed  out  that  r. 23 postulates  addition  of  coloring matter  to  an  article  of  food  when  permitted.    This, according to the argument, suggests that the word ’color’ as used  in  entry no. 10 of the List of  the  Notification  in question has been used in a broad enough sense so as to take within  its  fold edible color or food color.   We  are  not impressed  by this argument.  Rule 23 of the  Prevention  of Food  Adulteration  Rules  indeed seems to  go  against  the submission. The  appellant’s learned counsel had at one stage  suggested that  the goods intended to be taxed under s. 3A of the  Act are  all  luxury goods and therefore food colors  and  syrup essences  which  are normally used by  comparatively  richer class of society should be presumed to have been intended to be included in items nos. 10 and 37 of the List.  On  closer scrutiny  of the List, however, this point was  rightly  not developed. For the reasons foregoing this appeal fails and is dismissed with costs. V.P.S.                 Appeal dismissed. 860