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PETITIONER: COMMISSIONER OF WEALTH TAX, ORISSA, BHUBANESWAR

       Vs.

RESPONDENT: SMT. BINAPANI CHAKRAVARTY

DATE OF JUDGMENT28/03/1995

BENCH: MANOHAR SUJATA V. (J) BENCH: MANOHAR SUJATA V. (J) AGRAWAL, S.C. (J) HANSARIA B.L. (J)

CITATION:  1995 AIR 1380            1995 SCC  Supl.  (2) 262  JT 1995 (3)   506        1995 SCALE  (2)496

ACT:

HEADNOTE:

JUDGMENT: MRS.  SUJATA V. MANOHAR J..- 1.These  appeals by special leave from a common judgment  of the High Court of the Orissa in seven Reference Applications before it under Section 27(1) the Wealth Tax 1957.  The High Court was required to consider the following question:-               "Whether  the  word  ’jewellery’  in   section               5(1)(viii)  of the Wealth-Tax Act, 1957  prior               to  the  amendment  of  the  section  and  the               introduction of the Explanation by the Finance               Act  (No.2)  of’  1971  could  take  in   gold               ornaments  without  precious  or  semiprecious                             stones embedded on them?" The High Court has answered the question thus:-               "The word ’jewellery’ in section 5(1)(viii) of               the Wealth Tax Act of 1957 prior to  amendment               of   the   provision   and   introduction   of               Explanation  1  by the Finance Act  (No.2)  of               1971 would not take in gold ornaments  without               precious  or semi-precious stones embedded  on               them." The Commissioner of Wealth Tax has filed the present appeals from the above decision. 2.  The  relevant assessment years are 1965-66  to  1971-72. The  relevant valuation dates are 31st of March of  each  of the  years  in  question.  We are,  therefore,  required  to consider  the  provisions  of Section 5(1)(,  viii)  of  the Wealth Tax Act, 1957 as in force during the relevant period. Section 5 of the Wealth Tax Act. 1957 deals with  exemptions from  wealth  tax  granted In  respect  of  certain  assets. Section  5(i)(Viii), prior to its amendment by  the  Finance Act 2 of 1971, was follows :-               "5(i)  :  Subject to the  provisions  of  sub-               section (1A) weath-tax shall not be payable by               an  assessee  in  respect  of  the   following

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             assets, and such assets shall not be  included               in the net wealth  of the assessee -               (1)  x     x    x     x      x               508                x x x x x                (viii)    furniture,   household    utensils,               wearing apparel, provisions and other articles               intended for the personal or household use  of               the assessee.  " Section  5(1)(viii)  was interpreted in the context  of  the provisions of Section 5(1)(xiii) and 5(i)(xv) by this  Court in  the  case  of  Commissioner  of  Wealth-Tax  Gujarat  v. Arundhati Balakrishna (77 ITR 505).     The Court said  that jewellery intended  for  the  personal use of  the  assessee would     come  within  the scope of the  exemption  granted under  Section 5(1)(viii) -- being "other articles  intended for   the  personal.......  use  of  the  assessee."  As   a consequence,   the  Finance  Act  2  of  1971  amended   the provisions  of Section 5(1)(viii) with retrospective  effect from 1st of April, 1963, to read as follows :-               "5(1)(viii):furniture,   household   utensils,               wearing apparel, provisions and other articles               intended for the personal or household use  of               the assessee, but not including jewellery."                                        (underlining ours) By  the  same Finance Act of 1971, Explanation  1  was  also added to Section 5(1)(viii).  The Explanation, however,  was made   effective  only  prospectively,  with   effect   from 1.4.1972. Explanation 1 is as follows :-               "Explanation  1  : For the  purposes  of  this               clause  and  clause (xiii),  ’’jewellery’  in-               cludes -               (a)   ornaments made of gold, silver, platinum               or  any  other  precious metal  or  any  alloy               containing  one  or  more  of  such   precious               metals, whether or not containing any precious               or  semi-precious  stone, and whether  or  not               worked or sewn into any wearing apparel;               (b)   precious   or   semi-precious.   stones,               whether  or not set in any furniture  untensil               or  other article or worked or sewn  into  any               wearing apparel." 3.   In the present appeals we are concerned with the period during which the retrospectively amended Section  5(1)(viii) was in operation but without Explanation 1 (which came  into effect  from 1st of April, 1972).  We have to consider  what is excluded from the benefit of the exemption granted  under Section  5(1)(viii).   Is it only those items  of  jewellery which  are studded with precious or semi-precious stones  or whether  all  ornaments and jewellery made out  of  precious metals  (such  as gold, silver or platinum  or  alloys  with precious  metals) are excluded from the exemption,  although they  may  not  be studded with  precious  or  semi-precious stones? 4.It has been urged before us by the assessee that it is  on account of Explanation 1 to Section 5(1)(viii) that the term "jewellery" would also include ornaments made only of  gold, silver,  platinum  or  any other  precious  metal  or  alloy containing  such  precious metal, even  though  no  precious stones  arc embedded in them.  It is submitted that  in  the absence  of such an Explanation during the relevant  period, the term "jewellery" would cover only ornaments studded with jewels or precious stones.  It would not cover in its  ambit ornaments  made only of gold, silver, platium or  any  other precious metal or alloy.

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5.To  interpret  the word "jewellery" as  such  without  the benefit of Explanation 1, 509 we   must  first  consider  how  the  term  "jewellery"   is ordinarily  understood  the New  Shorter  Oxford  Dictionary "jewellery"  is defined as :               "gems or ornaments made or sold by  jewellers,               especially   precious  stones  in   mountings;               jewels collectively or as a form of adornment.               "               "Jewel" is defined as:               "An  article  or  value  used  for  (personal)               adornment,   especially  one  made  of   gold,               silver, or precious stones............. a pre-               cious stone, a gem; especially one worn as  an               ornament.  " The  term  "jewel"  and  "jewellery",  therefore,  refer  to articles of value for adornment, especially those made  from gold, silver or precious stones.  The terms are,  therefore, wide enough to cover not merely precious stones or  articles of adornment made with the use of precious stones, but  also other articles of value made from gold, silver, platinum  or precious  metals.  Ordinarily speaking, when a person  talks about  jewellery,  he includes ornaments which arc  made  of gold,  silver or any other precious metal also  irrespective of  whether these articles have precious stones embedded  in them or not. 6.The  difference  which is sought to be  made  out  between ornaments  which contain precious stones, and  ornaments  of gold, silver and platinum which do not have precious  stones embedded  in  them,  appears to  be  artificial.   The  term "jewellery"  is  not confined in ordinary parlance  to  only those ornaments which have precious stones embodded in them. It  covers  all  articles of value used  for  adornment.   A jewellery shop normarlly sells not just precious stories  or articles  made  of  precious  stones;  it  certainly   sells ornaments  of gold and silver.  It may be that in our  local languages,  different kinds of bangles, necklaces and  other ornaments carry different and specific names depending  upon their  design and craftsmanship.  But these are all  covered by the generic term "jewellery." 7.   Undoubtedly, the Explanation has been introduced by the Finance  Act of 1971, partly to clarify this position.   The explanation provides an extensive definition of "jewellery." It includes ornaments made of gold, silver, platinum or  any other precious metal whether or not containing any  precious or semi-precious stones.  It also covers, within the meaning of  the term, such items which may or may not be  sewn  into any   wearing  apparel.   It  also  includes  precious   and semiprecious  stones  whether  or not  set  many  furniture, utensils or other article, or worked or sewn into any  wear- ing apparel.  The Explanation may have extended the  meaning of  "jewellery"  to cover, for example, precious  stones  by themselves or precious stones set in furniture or  utensils. But  insofar as it includes ornaments made of gold,  silver, platinum or any other precious metal or alloy, it is  merely clarificatory  in nature.  Merely because ornaments made  of gold and silver are now expressly included in Explanation 1, it  is not possible to hold that they were earlier  excluded from the meaning of the term "jewellery." 8.   In the case of Commissioner of Wealth-Tax, Delhi-II  v. Smt.   Savitri Devi (140 ITR 525), a Division Bench  of  the Delhi  High Court held that the word "jewellery" as set  out in  the dictionaries and as understood in  common  parlance, includes gold

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510 ornaments made for personal use.  These are almost always  a jeweller’s job and cannot be made by anyone.  The Delhi High Court  has  held that the Explanation cannot take  away  the ordinary meaning of the word "jewellery".  The  artificially enlarged meaning as given by the definition in Explanation 1 also  includes,  by  way of abundant  caution,  the  natural meaning  of  the term. hence jewellery, even  before  coming into  force  of  the  Explanation  1,  would  include   gold ornaments.   We agree with the reasoning of the  Delhi  High Court.   This view is reiterated in Commissioner  of  Wealth Tax, Delhi-III. v. Rukmani Devi(142 ITR 41). 9.A similar view has been taken by the Gujarat High Court in the  case  of  Commissioner of’ Wealth-Tax.   Gujarat  L  v. Jayantilal  Amratlal  (102 ITR 105); by the  Allahabad  High Court in the case of Commissioner of Wealth-Tax, Lucknow  v. His  Highness Maharaja Vibhuti Narain Singh (117  FIR  246), and  by  the  Madhya  Pradesh High  Court  in  the  case  of Nandkishore Girdharilal Modi. v. Commissioner of Wealth-Tax, M.P.  (132  ITR 868).  Another Bench of the  Madhya  Pradesh High Court in the case of Commissioner of Wealth-Tax, MP. v. Smt.  Sonal K. Amin (127 ITR 427) has, however, taken a con" view.   The  Calcutta High Court has also taken  a  contrary view in the case of Commissioner of Wealth-Tax, West Bengal- 1,  Calcutta  v. Aditya Vikrant Birla 14 ITR  711.  For  the reasons  which we have set out above, we do not  agree  with the  contrary view expressed by the Calcutta High  Court  in Aditya  vikram   Birla’s  case (supra)  and  by  the  Madhya Pradesh  High Court in Sonal K.  Amin’s Case  (supra).   The Calcutta  High Court has placed some emphasis  on  different vernacular terms used for different types of ornaments.   In our  view,  this is not, in any manner,  conclusive  of  the question  whether  the term "jewellery"  includes  ornaments made  of  precious  metals  such as  gold  or  silver.   The contrary decisions arc, therefore, overruled, 10.In the premises, the appeals are allowed with costs. 511