R ATMARAM BASUDIWALA Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THE question referred to this High Court for the opinion and answer by the Gujarat Sales Tax Tribunal under section 69 of the Gujarat Sales Tax Act, 1969, reads thus : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that mori basudi sold by the applicant under its cash memo No. 5270, dated January 15, 1980, was exigible to tax under entry 50 of Schedule II, Part A to the Gujarat Sales Tax Act, 1969 ?" The assessee, M/s. R. Atmaram Basudiwala, is a partnership firm carrying on the business of preparing and selling sweets at Ahmedabad. The assessee-firm is duly registered as a dealer under the Gujarat Sales Tax Act, 1969. The assessee had sold mori basudi without masala weighing 1. 50 kg. for an amount of Rs. 24 to one of the customers on January 15, 1980 and issued sale bill bearing No. 5270. The assessee had made the necessary application for the determination under section 62 of the Act. The assessee had annexed along with the application the abovesald bill. The question for determination was as to the rate of tax payable on the sale of mori basudi which would be without sugar and without masala. In the determination application it was contended that the assessee manufactured condensed milk without any sugar or mala known as mori basudi. It was urged that mori basudi would be the milk condensed, which would be in a denied and condensed form without sugar and masala. It was urged that the sale of the abovesaid article would be tax-free under entry No. 10 of Schedule I to the Act. The learned Deputy Commissioner, after hearing the parties had come to the conclusion that the article namely, mori basudi would fall within residuary entry No. 13 of Schedule III, to the Act. The assessee had carried the matter before the Tribunal by filing First Appeal No. 7 of 1981. The Tribunal had partially allowed the appeal and had held that the correct entry applicable would be entry 50 of Schedule II, Part A to the Act, and thus it set aside the order regarding the applicability of the residuary entry 13 of Schedule III to the Act. Later on the assessee had submitted the necessary application for reference to this Court and accordingly the reference has been made. While considering the determination application the learned Deputy Commissioner, Sales Tax had considered three entries. He had firstly considered entry 10 of Schedule I to the Act which runs thus : " (i) Milk, whole or separated or reconstituted. (ii) Buttermilk, curds and lassi and chakka. " Entry 50 of Schedule II to the Act which runs thus was also considered. " Sweets and sweetmeats (including shrikhand, bastidi and doodpak ). " Lastly residuary entry 13 of Schedule III to the Act, which runs thus, was also considered. " All goods other than those specified from time to time in sections 18 and 19a and 19b and in Schedules I and II and in the preceding entries. " The learned Deputy Commissioner had observed that ordinarily the fat contents of pure milk would be much low and that in the same way the price thereof would also be much low in comparison with mori basudi. The Deputy Commissioner and the Tribunal have examined the question by applying the well-known principle of popular parlance. The Supreme Court decision in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 STC 286 and one another Supreme Court decision in Commissioner of Sales Tax v. Jaswant Charan Singh [1967] 19 STC 469 were taken into consideration. Applying the principle laid down by the Supreme Court in the abovesald two decisions, the Tribunal and the Deputy Commissioner had come to the conclusion that mori bastidi would not fall within the tax-free entry. In the abovesaid two decisions rendered by the Supreme Court the well-known principle has been laid down which is to the effect that when a particular entry is to be read and when the question regarding the particular commodity falling within that entry is to be examined, the test would be as to whether that particular commodity is known by that particular name in the entry, by the people in the area in which the law exists at the relevant time. If this test is to be applied to the present question it would become abundantly clear that mori basudi would not fall within the purview of entry 10. The reasoning in the background of the conclusion is obvious. A customer who is out in the market to purchase milk would never accept mori basudi. In the same way a person who reaches a sweet shop to have mori basudi would never be content with a pouchful measure of milk, simpliciter. "mori basudi" will always be used as a sweet after adding sugar to the taste while milk would be used as milk only, though for a variety of purposes in a variety of modes and methods. Incidentally it may be noticed that the same principle has been reiterated by the Supreme Court in a later decision in Collector of Central Excise v. Parle Exports (P) Ltd. [1989] 75 STC 105; (1988) JT 454 (SC), treating the test of popular parlance as effective as it was in the light of earlier decisions.

(2.) THE abovesaid entry 10 which forms the part of the Schedule I to the Act is in respect of milk, whole or separated or reconstituted. It also speaks of butter-milk, curd, lassi and chakka. The abovesaid items have been made tax-free under entry 10 of Schedule I to the Act. Applying the principle of popular parlance it, can be said without any hesitation that the article which is being sold in the name and style of mori basudi would never fall within the purview of abovesaid tax-free entry. Incidentally it requires to be appreciated that at the time of presenting the determination application, the bill which was produced along with the application by the assessee was also in respect of mori basudi. It therefore goes to show very clearly that when the seller had sold and the purchaser had purchased the commodity it was known as and it was taken and given as mori basudi and not as milk. Therefore applying the principle of popular parlance it becomes abundantly clear that mori basudi would not fall within the abovesaid entry 10 of Schedule I to the Act which is a tax-free entry. As noticed above while deciding the determination application the learned Deputy Commissioner, Sales Tax had come to the conclusion that the article would fall within the residuary entry 13 of Schedule III to the Act. The abovesaid determination opinion of the learned Deputy Commissioner, Sales Tax, could not found favour with the Tribunal and in our opinion rightly so. Entry 50 of Schedule II to the Act is in respect of sweets and sweetmeats. The abovesaid entry also includes shrikhand, basudi and doodhpak. It therefore becomes clear that the Tribunal was perfectly justified in coming to the conclusion that the abovesaid article which was sold in the name of mori basudi, falls within entry 50 of Schedule II to the Act. It was sought to be urged before the Tribunal that under the tax-free entry No. 10 of Schedule I butter-milk, curd, lassi and chakka are also made perfectly tax-free. On the analogy of the abovesaid position it was tried to be urged before us also that chakka is the commodity or a product from which ultimately shrikhand is being manufactured. Any how chakka has been excluded and it is forming the part of tax-free entry 10 of Schedule I. The Tribunal had accepted the view that entry 50 of Schedule II to the Act is in respect of certain sweets but the tax-free entry 10 includes chakka If the Legislature wanted to include mori basudi also within the tax-free entry 10 of Schedule I to the Act, nothing could prevent the Legislature from doing so. We are in perfect agreement with the abovesald reasoning adopted by the Tribunal. It therefore becomes clear that the article in question namely, mori basudi would never fall within the tax-free entry 10 of Schedule I to the Act.

(3.) ONCE again reverting to the Supreme Court decision in Collector of Central Excise [1989] 75 STC 105, it requires to be pointed out that as stated by the Supreme Court the words, used in the provision imposing tax or granting exemption, should be understood in the same way in which the same are understood in ordinary parlance in the area in which the law is in force or by people who ordinarily deal with them. As made clear by us earlier the word mori basudi is being used by the people including the manufacturer for a sweet known as mori basudi and never for the milk. Viewing this case in this respect also it becomes clear that the abovesaid commodity would not fall within the tax-free entry as urged by the assessee. It therefore becomes clear that the Tribunal was perfectly justified in coming to the conclusion that the commodity in question would be failing within entry 50 of Schedule II of the Act. We therefore answer the abovesaid question in affirmative and in favour of the Revenue and against the assessee, with no order as to costs. Reference answered in the affirmative. .