COMMISSIONER OF SALES TAX Vs. AGARWAL AND CO

JUDGEMENT

(1.) THE respondents, Messrs. Agarwal & Co. , are resellers in tea, coffee and skimmed milk powder. For the period 1st April, 1975, to 31st March, 1976, the Sales Tax Officer subjected the sales of skimmed milk powder to tax rejecting the contention of the respondents that skimmed milk powder was covered by entry No.36 of Schedule A to the Bombay Sales Tax Act, 1959, as then in force, and hence was exempt from the payment of sales tax. THE Sales Tax Officer accordingly held that the sales of skimmed milk powder amounting to Rs. 24,593 were liable to be taxed. From this finding the respondents appealed before the Assistant Commissioner of Sales Tax. THE appeal was dismissed. THE respondents preferred a second appeal before the Tribunal. THE respondents relied upon a decision of the Commissioner in the determination proceedings under section 52 of the Act in the case of Messrs. Vyas Corporation (DDQ-1171/164/b-2 dated 4th October, 1972) and the detailed discussion of facts and law in that decision. THEy also submitted that a subsequent decision of the Commissioner in determination proceedings in the case of Messrs. Hariom Sales Corporation (No. DDQ-1174/198/b-10 dated 13th December, 1975) was not applicable to the present case. THE respondents also challenged the correctness of the decision in Hariom Sales Corporation case. THE Tribunal considered in detail the decisions of the Commissioner in two earlier cases as well as the detailed reasoning given in these two decisions and came to the conclusion that skimmed milk powder is covered by entry No.36 of Schedule A to the Bombay Sales Tax Act, 1959, as then in force. THE Tribunal accordingly allowed the second appeal filed by the respondents. THEreafter, at the instance of the department, the following two questions have been referred to us under section 61 (1) of the Bombay Sales Tax Act, 1959 : " (1) Whether, on a true and proper interpretation of entry No.36 in Schedule A to the Bombay Sales Tax Act, 1959, the Tribunal was correct in holding that the 'skimmed milk powder' falls within the scope of the said entry ? (2) Whether there was any evidence before the Tribunal for coming to the conclusion that skimmed milk powder is now understood as milk in common parlance ?"

(2.) UNDER section 5 of the Bombay Sales Tax Act, 1959, the sale and purchase of goods specified in Schedule A is free from all taxes. Entry 36 of Schedule A to the Bombay Sales Tax Act, 1959, at the relevant time was as follows : " Milk, whole or separated or reconstituted. "

(3.) IN this connection, it is also relevant to examine the legislative history of this entry. As observed by a Division Bench of this High Court in the case of Commissioner of Sales Tax, Maharashtra, Bombay v. Lala Lajpatrai Hotel, reported in [1975] 35 STC 368, it is permissible to look at the legislative history of an entry while interpreting the words of an entry in a sales tax legislation. A reference to the legislative history of an entry was similarly made in the case of Commissioner of Sales Tax, v. Sultan Shev Co. reported in [1977] 40 STC 583. The legislative changes pertaining to this entry can be seen at a glance from the following table : ------------------------------------------------------------------------ Act Schedule Entry No. Description of goods Period ------------------------------------------------------------------------ 1 2 3 4 5 ------------------------------------------------------------------------ Bombay II 14 Fresh milk, 1-10-1946 to Sales Tax condensed milk, 31-3-1948 Act, 1946 separated milk, milk powder and infant foods. do. II 14 Fresh milk, whole 1-4-1948 to or separated and 31-10-1952 milk powder Bombay I 24 Fresh milk, whole 1-11-1952 to Sales Tax or separated 31-3-1953 Act, 1952 Bombay A 34 Milk, whole or 1-4-1953 to Sales Tax separated 31-3-1959 Act, 1953 Bombay A 36 Milk, whole or 1-1-1960 to Sales Tax separated or 30-6-1981 Act, 1959 reconstituted do. A 34 Milk in liquid form, 1-7-1981 to whether sweetened till date or not, but not including condensed milk or flavoured milk ----------------------------------------------------------------------- Thus, originally the entry in terms pertained to fresh milk. Therefore, milk powder was expressly included in this entry up to 31st October, 1952. From November, 1952, to 31st March, 1953, the entry covered only fresh milk, whole or separated. As from 1st April, 1953, the word "fresh" has been removed. The entry as from 1st April, 1953, to 31st December, 1959, only refers to milk, whole or separated. As from 1st January, 1960, right up to 30th June, 1981, the entry covers milk, whole or separated or reconstituted. IN view of the decisions of the Commissioner and the Tribunal holding that powered milk was covered by the term "milk", the relevant entry appears to have been amended as from 1st July, 1981, to cover only "milk in liquid form". We are not here concerned with this latest amendment in the Act. But the amendment itself indicates that unless there are express words which confine the term "milk" only to milk in its liquid form, ordinarily milk would include all types of milk including milk powder.