1972 (11) TMI 66 - SC - VAT / Sales Tax

Imported food colours and syrup essences classification under general entries found excluded; not taxable under those entries, appeal dismissed

Construction of list entries turns on ordinary commercial meaning and context; words such as 'dyes and colours' and 'scents and perfumes' must be read as ... Imported food colours and syrup essences the rate of tax - words 'dyes and colours' - Single point taxation - Whether the food colour and essence are under the circumstances items to be taxed under section 3-A within the Notification No. ST-905/X dated March 31, 1956? Held that:- The words 'dyes and colours' used in entry No. 10 and the words 'scents and perfumes' used in entry No. 37 have to be construed in their own context and in the sense, as ordinarily understood and attributed to these words by people usually conversant with and dealing in such goods. Similarly, the words 'food colours' and 'syrup essences' which are descriptive of the class of goods the sales of which are to be taxed under the Act have to be construed in the sense in which they are popularly understood by those who deal in them and who purchase and use them. 'Food colours' and 'syrup essences' being themselves known articles of common use, the question arises whether the words and expressions used in entries 10 and 37 of the List are intended to take within their fold goods popularly known in common parlance by the names of 'food colours' and 'syrup essences'. Now in the case of entries Nos. 10 and 37 we are inclined to think in agreement with the High Court that these entries are not intended to extend to edible colours like food colours and to edible essences like syrup essences. It would indeed be straining the meanings of the words and expressions in those entries as understood in popular commercial sense to include edible colours and essences. If the intention of the State Government was to include food colours in entry No. 10 and syrup essences in entry No. 37 then in our view these goods could easily have been specified by their own popularly known description. In any event, assuming that another view as to the meaning of these entries is possible, we have not been persuaded to hold that the view taken by the High Court is so grossly erroneous that we should interfere on special leave appeal under article 136 of the Constitution. The appellant's learned counsel had at one stage suggested that the goods intended to be taxed under section 3-A of the Act are all luxury goods and therefore food colours and syrup essences which are normally used by comparatively richer class of society should be presumed to have been intended to be included in items Nos. 10 and 37 of the List. On closer scrutiny of the List, however, this point was rightly not developed. For the reasons foregoing this appeal fails and is dismissed with costs. Issues: Whether food colours and syrup essences imported from outside the State fall within entries 10 and 37 respectively of Notification No. ST-905/X dated March 31, 1956 and therefore are taxable under section 3-A (single point taxation) of the U.P. Sales Tax Act, 1948.Analysis: The entries in the notification must be construed in their commercial and popular sense as understood by persons dealing in the goods. Dictionaries giving multiple shades of meaning are not decisive. Precedents require ordinary, trade or commercial meaning to be applied when statutory items are not defined. The List in the notification otherwise indicates which edible goods are intended to be included, and entries 10 and 37 do not prima facie denote edible articles. Interpreting 'dyes and colours' and 'scents and perfumes' to include edible food colours and syrup essences would strain their ordinary commercial meaning and is unnecessary given that such edible items could have been specifically identified if intended to be covered.Conclusion: Food colours and syrup essences do not fall within entries 10 and 37 of Notification No. ST-905/X dated March 31, 1956 and therefore are not taxable under section 3-A of the U.P. Sales Tax Act, 1948; conclusion in favour of the assessee.