1975 JTR(Ori) 89
1975 41 CLT 1310 ; 1976 37 STC 33 ; 1975 KHC 1303
N.K. Das, R.N. Misra, JJ.
STATE OF ORISSA
Versus
JANATA MEDICAL STORES
Special Jurisdiction Cases Nos. 146-148 of 1973
Decided On: Decided On : 30-09-1975
The interpretation of the term "glassware" in the context of the Orissa Sales Tax Act, 1947, and the entitlement of the Tribunal to annul assessments on the ground of hardship.
ORISSA SALES TAX ACT, 1947 - SECTION 5(1) - GLASSWARE - INTERPRETATION - ARTICLES MADE OF GLASS - COMMON PARLANCE MEANING - THERMOMETERS, LACTOMETERS, SYRINGES, EYE-WASH GLASSES AND MEASURING GLASSES - NOT GLASSWARE - PLASTIC RUBBERS AND PLASTIC PIECES - PLASTIC ARTICLES - TAXABLE AT 7 PERCENT.
Fact of the Case:
The assessee, a medical store, challenged the assessment of sales tax on thermometers, lactometers, syringes, eye-wash glasses, measuring glasses, plastic rubbers, and plastic pieces. The dispute arose due to the classification of these items as glassware, which was subject to a higher tax rate of 7 percent under the Orissa Sales Tax Act, 1947.
Finding of the Court:
The court held that thermometers, lactometers, syringes, eye-wash glasses, and measuring glasses did not come within the ambit of glassware as defined in the notification issued under the Act. The court found that these items were not commonly understood as glassware and had additional components that made them distinct from ordinary glassware. The court also held that plastic rubbers and plastic pieces were plastic articles and were subject to the higher tax rate of 7 percent.
Issues: 1. Whether thermometers, lactometers, syringes, eye-wash glasses, and measuring glasses come within the ambit of glassware and are subject to a higher tax rate of 7 percent? 2. Whether the Tribunal was entitled to annul assessments in respect of the sale of plastic rubbers and plastic pieces on the ground of hardship?
Ratio Decidendi: 1. The court interpreted the term "glassware" in its common parlance meaning, as there was no definition provided in the Act. The court found that thermometers, lactometers, syringes, eye-wash glasses, and measuring glasses were not commonly understood as glassware and had additional components that made them distinct from ordinary glassware. Therefore, they did not fall within the ambit of glassware as defined in the notification issued under the Act. 2. The court held that the Tribunal was not entitled to annul assessments in respect of the sale of plastic rubbers and plastic pieces on the ground of hardship. The court stated that the State was entitled to recover its legitimate dues and that the Tribunal's approach was contrary to accepted canons of tax assessment.
Final Decision: The court answered the questions referred to it by holding that: 1. Thermometers, lactometers, syringes, eye-wash glasses, and measuring glasses did not come within the ambit of glassware and were not subject to the higher tax rate of 7 percent. 2. The Tribunal was not entitled to annul assessments in respect of the sale of plastic rubbers and plastic pieces on the ground of hardship.
ORISSA SALES TAX ACT, 1947 - SECTION 5(1) - GLASSWARE - INTERPRETATION - ARTICLES MADE OF GLASS - COMMON PARLANCE MEANING - THERMOMETERS, LACTOMETERS, SYRINGES, EYE-WASH GLASSES AND MEASURING GLASSES - NOT GLASSWARE - PLASTIC RUBBERS AND PLASTIC PIECES - PLASTIC ARTICLES - TAXABLE AT 7 PERCENT.
Fact of the Case:
The assessee, a medical store, challenged the assessment of sales tax on thermometers, lactometers, syringes, eye-wash glasses, measuring glasses, plastic rubbers, and plastic pieces. The dispute arose due to the classification of these items as glassware, which was subject to a higher tax rate of 7 percent under the Orissa Sales Tax Act, 1947.
Finding of the Court:
The court held that thermometers, lactometers, syringes, eye-wash glasses, and measuring glasses did not come within the ambit of glassware as defined in the notification issued under the Act. The court found that these items were not commonly understood as glassware and had additional components that made them distinct from ordinary glassware. The court also held that plastic rubbers and plastic pieces were plastic articles and were subject to the higher tax rate of 7 percent.
Issues: 1. Whether thermometers, lactometers, syringes, eye-wash glasses, and measuring glasses come within the ambit of glassware and are subject to a higher tax rate of 7 percent? 2. Whether the Tribunal was entitled to annul assessments in respect of the sale of plastic rubbers and plastic pieces on the ground of hardship?
Ratio Decidendi: 1. The court interpreted the term "glassware" in its common parlance meaning, as there was no definition provided in the Act. The court found that thermometers, lactometers, syringes, eye-wash glasses, and measuring glasses were not commonly understood as glassware and had additional components that made them distinct from ordinary glassware. Therefore, they did not fall within the ambit of glassware as defined in the notification issued under the Act. 2. The court held that the Tribunal was not entitled to annul assessments in respect of the sale of plastic rubbers and plastic pieces on the ground of hardship. The court stated that the State was entitled to recover its legitimate dues and that the Tribunal's approach was contrary to accepted canons of tax assessment.
Final Decision: The court answered the questions referred to it by holding that: 1. Thermometers, lactometers, syringes, eye-wash glasses, and measuring glasses did not come within the ambit of glassware and were not subject to the higher tax rate of 7 percent. 2. The Tribunal was not entitled to annul assessments in respect of the sale of plastic rubbers and plastic pieces on the ground of hardship.
The Standing Counsel (S.T.), for the petitioner.
B. Agarwala, for the opposite party.
JUDGMENT
R. N. MISRA, J. - On applications by the State of Orissa made under section 24(2)(b) of the Orissa Sales Tax Act of 1947, this court directed the Tribunal to state a case and refer the following two questions for opinion of the court :
"(1) Whether, on the facts and in the circumstances of the case, the Sales Tax Tribunal is correct in annulling the assessments by holding that thermometers, lactometers, syringes, eye-wash glasses and measuring glasses do not come within the ambit of serial No. 38 of the schedule of taxable goods ? and
(2) Whether, the Tribunal is entitled to annual assessment in respect of sale of plastic rubbers and plastic pieces on the ground of hardship ?"
2. The assessee is a medical stores at Puri. The periods of assessment are 1966-67, 1967-68 and 1968-69. While examining the assessee's accounts the Sales Tax Officer found that in respect of the sale turnover of thermometers, lactometers, syringes, measuring glasses and eye-wash glasses as also droppers and certain other alleged plastic articles the assessee had collected and paid tax at 5 per cent. As the assessing officer was of the view that all the named articles except plastic materials came within the meaning of glassware, the sale thereof was taxable at 7 per cent of the price. Similarly, in regard to sale of plastic goods a higher rate of tax exigible. Additional demands raised by the Sales Tax Officer were impugned by the assessee in appeal before the Assistant Commissioner. He, however, agreed with the assessing officer. In second appeal the assessee's contention waived with the Tribunal. The Tribunal stated that under sub-section (1) of section 5 of the Act provision for rate of tax has been made. The general rate is 5 per cent. The first two provisos authorise the State Government to vary the rate of tax by notification. The first proviso reads thus :
"Provided that the State Government may, from time to time by notification and subject to such conditions as they may impose, fix a higher rate of tax not exceeding seven per cent or any lower rate of tax payable under this Act on account of the sale or purchase of any goods or class of goods specified in such notification."
Notification No. 33927-F dated 30th December, 1957, has been made in exercise of powers conferred by the first proviso to sub-section (1) of section 5. Under item No. 38, glassware, china-clay goods excepting bottles, lamps and lantern chimneys and earthenware pottery are subject to tax at 7 per cent. The dispute in the matter before us is the assessee's claim that the items indicated above are not glasswares and, therefore, do not come within the purview of item No. 38 of the notification in question. The taxing department is of the view that these articles are glasswares and, therefore, exigible to tax at 7 per cent. Glassware has no definition under the Act. The Supreme Court has indicated in three pronouncements, Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [[1961] 12 S.T.C. 286 (S.C.)], Commissioner of Sales Tax v. Jaswant Singh Charan Singh [[1967] 19 S.T.C. 469 (S.C.)] and Commissioner of Sales Tax v. S.N. Brothers [[1973] 31 S.T.C. 302 (S.C.)], that the meaning of the term in common parlance, in the absence of a definition, has to be adopted. In the last of the cases cited above, Dua, J., while speaking for the court quoted with approval the observation of the Madras High Court in the case of Kishinchand Chellaram v. Joint Commercial Tax Officer [[1968] 21 S.T.C. 367], to the effect that the import and content of the words having not been defined in the Sales Tax Acts, 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. "Glassware" as understood from the Shorter Oxford English Dictionary is "articles made of glass". In popular sense glassware would ordinarily refer to articles made of glass. In general use, when glassware is referred to one's mind, thermometers, lactometers, syringes or eye-wash glasses or even measuring glasses do not occur. A general merchant dealing in glassware ordinarily does not deal in these articles. These are articles which are normally available in a medical shop such as that of the assessee before us. Thermometers and lactometers and also syringes are not only made of glass but there are other components. Though their bodies may be of glass, the additional materials of non-glass origin therein which really make them marketable and goods of utility have a predominant place. Therefore, they do not strictly come within the common parlance meaning of glassware. Undoubtedly, eye-wash glass and measuring glass are made of glass, but when one refers to glassware, these specialised materials are not understood to be glassware as such.
3. In this view of the matter, we would agree with the conclusion of the Tribunal and answer the question referred to us by holding that :
On the facts and in the circumstances of the case, the Sales Tax Tribunal is correct in annulling the assessments by holding that thermometers, lactometers, syringes, eye-wash glasses and measuring glasses do not come within the ambit of serial No. 38 of the schedule of taxable goods.
4. It is conceded before us by the counsel for the assessee that plastic rubbers and plastic pieces are plastic articles and would, therefore, be directly covered by item No. 7-C of the very notification whereunder the plastic goods are liable to tax at 7 per cent. The concession before us on behalf of the assessee is well-founded. The Tribunal while dealing with this aspect of the matter says :
"As regards plastic droppers the matter is different. They are essentially plastic goods and they can be used in the clinical side and as well as in many other ways. Therefore, they should be taxed at 7 per cent. However, these sales appear to be very little and merely because some plastic droppers might have been sold the entire assessment previously made cannot be disturbed and it would be a matter of hardship if the appellant is again assessed on the ground that he has been under-assessed."
The approach of the Tribunal is certainly contrary to all accepted canons of assessment of tax. The State is entitled to recover its legitimate dues. Merely because the tax dues may be smaller, it is open to take the view it has. Our answer to the second question, therefore, is :
The Tribunal is not entitled to annual assessments in respect of sale of plastic rubbers and plastic pieces on the ground of hardship.
We make no order as to costs.
N. K. DAS, J. - I agree.
Reference answered accordingly.