1985 (7) TMI 331 - SC - VAT and Sales Tax

Supreme Court: Ripened Coconut Not 'Fresh Fruit' for Tax Exemption

PA Thillai Chidambara Nadar Versus Additional Appellate Assistant Commissioner, Madurai and Another

The Supreme Court held that a ripened coconut does not qualify as a 'fresh fruit' or a 'vegetable' for exemption from sales tax under the Tamil Nadu ... Whether a coconut (neither tender nor dried but a ripened cocount with or without husk) is a 'fresh fruit' or a 'vegetable' so as to earn exemption from the levy of sales tax under G.O. No. 1764 dated April 5, 1960 as amended on December 22, 1960 issued under the Tamil Nadu General Sales Tax Act? 1959? Held that:- Appeal dismissed. It is well-settled that it is for the assessee who claims exemption to adduce evidence that a particular article is an exempted item and if he cannot or if he fails to do so, then the Revenue may proceed on its basis. In such a situation, the assessee should have such an opportunity. We cannot foreclose such an opportunity. We cannot categorically say that ripened coconut could never be considered to be 'vegetable'. But in this case the assessee has adduced no evidence. Issues:1. Whether a coconut is considered a 'fresh fruit' or a 'vegetable' for exemption from sales tax.2. Interpretation of exemption notification under the Tamil Nadu General Sales Tax Act, 1959.3. Application of the principles of statutory interpretation in determining the classification of coconut.4. Analysis of legislative history and earlier exemption notifications.5. Burden of proof on the assessee for claiming exemption.Issue 1:The main issue in the judgment is whether a coconut should be classified as a 'fresh fruit' or a 'vegetable' to qualify for exemption from sales tax under a specific notification. The High Court held that a ripened coconut does not fall under either category, making it liable for sales tax. The Supreme Court analyzed the popular meaning of 'fresh fruit' and 'vegetable' in household usage, concluding that a coconut does not fit within these definitions. The court emphasized that even though a coconut may be used in culinary preparations, it is not a substantial article of food on the table, leading to the rejection of the appellant's claim for exemption.Issue 2:The judgment interprets the exemption notification issued under the Tamil Nadu General Sales Tax Act, 1959, which exempts 'fresh fruits' and 'vegetables' from sales tax. The court applied the principle that terms should be understood in their popular meaning rather than scientific or technical definitions. The absence of a specific definition in the Act led to the court's reliance on common parlance to determine the classification of a coconut. The court concluded that a ripened coconut does not qualify as a 'fresh fruit' or a 'vegetable' under the notification, upholding the imposition of sales tax on the appellant.Issue 3:The judgment delves into the application of statutory interpretation principles in classifying a coconut for tax purposes. Referring to previous decisions, the court highlighted the need to consider the meaning attached to terms by those dealing with them. The court rejected the appellant's reliance on legislative history and earlier notifications, emphasizing that the specific exemption notification in question did not include coconuts. The court's analysis focused on the common understanding of 'fresh fruit' and 'vegetable' in everyday household use, leading to the dismissal of the appeals.Issue 4:The judgment scrutinizes the legislative history and earlier exemption notifications related to the taxation of coconuts. The court found that previous notifications subjected coconuts to sales tax until the issuance of the specific exemption under the 1959 Act. The court dismissed the appellant's attempt to rely on the legislative history, stating that the earlier notifications did not support the claim for exemption. Additionally, the court deemed the treatment of coconuts under subsequent amendments irrelevant to the current case.Issue 5:The judgment addresses the burden of proof on the assessee to establish eligibility for exemption from sales tax. The court emphasized that the burden lies with the party claiming exemption to provide evidence supporting the classification of the item as exempt. In this case, the appellant failed to present such evidence regarding the classification of ripened coconuts as 'vegetable' or 'fresh fruit,' leading to the dismissal of the appeals. The court highlighted the importance of providing evidence to support claims for exemption from taxation.