GLOBAL TRADES AND INDUSTRIES Vs. STATE OF KERALA

JUDGEMENT

(1.) THESE are connected cases. In this batch of tax revision cases, the question raised is whether dealers are liable to be taxed relating to their turnover of "safety fuse", "gelatine and detonators", etc. , under entry 18 of the First Schedule to the Kerala General Sales Tax Act, 1963, as it stood before the amendment by Act 19 of 1980 or under entry 157, as it stood before the amendment by Finance Act 18 of 1987. In all these cases, the Sales Tax Appellate Tribunal, relying upon the Bench decision in State of Kerala v. Sivachandradasa [1987] 65 STC 379 (Ker) came to the conclusion that fuses sold under the Explosives Act will come within the scope of entry 18/157 of the First Schedule. In this batch of revisions, Mr. Dandapani argues that his client is a licensee both under the Arms Act and the Explosives Act who dealt with commodities as per the licences under the two Acts. Similarly, Mr. Subramaniam contends that his clients are only dealers and licensees under the Explosives Act and they do not deal with any article under the licences issued under the Arms Act. It is contended by both the learned counsel that a Division Bench of this Court in Sivachandradasa's case [1987] 65 STC 379 relied on the definition of "ammunitions" in the Arms Act, 1959, ignoring the earlier Bench decision in Sales Tax Officer v. P. K. Navi & O. S. Chandran [1981] 47 STC 194 (Ker) and came to a wrong conclusion that selling of "safety fuse", etc. , also comes within entry 18/157 of the First Schedule. Entry 18 of the First Schedule to the Kerala General Sales Tax Act reads as follows : " 18. All arms including rifles, revolvers, pistols and ammunitions for the same. " (Entry No. 157 as it stood before the amendment by Finance Act 18 of 1987 is also of similar import ). It is significant to remember that this particular entry covers ammunitions which are meant for rifles, revolvers and pistols. It does not deal with any other ammunition. When we come to the Indian Arms Act, we find that the scope of definition is totally different. Section 2 (1) (b) of the Arms Act, 1959, is as follows : " 2. Definitions and interpretation.- (1) In this Act, unless the context other requires, - (a ). . . . . . . . . . . . . . . . . . . . . . . . . . (b) 'ammunition' means ammunition for any fire-arm, and includes, - (i) rockets, bombs, grenades, shells and other like missiles, (ii) articles designed for torpedo service and submarine mining, (iii) other articles containing or designed or adapted to contain explosive, fulminating or fissionable material or noxious liquid, gas or other such thing, whether capable of use with fire-arm or not, (iv) charges for fire-arms and accessories for such charges, (v) fuses and friction tubes, (vi) parts of, and machinery for, manufacturing ammunition, and (vii) such ingredients of ammunition as the Central Government may, by notification in the official Gazette, specify in this behalf;" In this definition of "ammunition", the most important words are ammunition for any fire-arm and includes fuses and friction tubes. What is contemplated by that definition is "fuses" which are used for the ammunition of fire-arms. In this batch of cases, we are concerned with "fuses" which are used for the purpose of quarrying, drilling and blasting rocks. None of these "fuses" can be used, nor is there any plea that they were ever used for any other purpose. They cannot be used for any fire-arms. It should be remembered, that while interpreting the words used in the statutes, we have to take into consideration the definition given in the context of the objects and reasons of the enactment, because the particular word is defined with reference to the purposes sought to be achieved by that enactment.

(2.) THIS Court in Sales Tax Officer v. P. K. Navi & O. S. Chandran [1981] 47 STC 194, clearly laid down that the definition of an expression contained in one enactment cannot furnish any safe guideline for determining the scope and content of the same expression used in a different context in a separate enactment. THIS is all the more so, when the two enactments have been passed by different legislative bodies. It was also held that the content and scope of the expression "ammunitions" occurring in entry No. 18 of the First Schedule to the Kerala General Sales Tax Act, 1963, should be considered by applying to it its ordinary meaning as obtaining in common parlance or commercial parlance. THIS principle is in accord with the earlier Full Bench decision of this Court in Krishna Iyer v. State of Kerala [1962] 13 STC 838 and the decisions of the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [19611 12 STC 286 and Commissioner of Sales Tax v. Jaswant Singh Charan Singh [1967] 19 STC 469. The later decisions of the Supreme Court are also of similar import : Aditya Mills Limited v. Union of India [1989] 73 STC 195; (1988) 4 SCC 315, Collector of Central Excise v. Krishna Carbon Paper Co. [1989] 72 STC 280; (1989) 1 SCC 150. The aforesaid decisions are binding on us and we should give effect to them. THIS particular principle enunciated long ago by the Supreme Court of India and also by a Full Bench and Division Bench of this Court, was not taken into account or rather ignored by the subsequent Division Bench which pronounced the judgment in Sivachandradasa's case [1987] 65 STC 379. With great respect to that Bench, we find that the procedure adopted by the Division Bench in the latter decision is not in accordance with the earlier binding decisions of the Supreme Court and of this Court. It should also be remembered that in the latter Bench decision, the dealer is a licensee under the Arms Act only. He was not a licensee under the Explosives Act. Without extracting in full the definition of the word "ammunition" given in section 2 (1) (b), their Lordships were inclined to import as a whole the definition given in the Arms Act into the Kerala General Sales Tax Act and apply the same for construing entry 18 of the First Schedule to the Kerala General Sales Tax Act.

(3.) WE examined the facts of the cases before us. WE find that originally tax was being collected under section 5 of the Act and 4 per cent was being collected. The same was upheld by the assessing authority and the appellate authority. Subsequently, after Sivachandradasa's case (1987] 65 STC 379 (Ker) notices are given and assessments are reopened and tax was levied at a higher rate at 20 per cent. In equity too, it is unfair to impose on the dealers a higher percentage of tax. But, we are not resting our decision on this ground. On a proper and fair interpretation of entry 18/157, we find that the goods dealt with by the revision petitioners do not come within entry 18/157.