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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether sovereign gold prepared by adding a small percentage of copper to mint gold answers the description of "bullion" in Entry 74 of the Second Schedule to the Mysore Sales Tax Act, 1957, so as to attract tax at the rate specified for bullion under section 5(3)(a), or whether it falls outside that entry and is taxable under section 5(1).
Analysis: The expression "bullion" was construed in its popular and commercial sense, not in a restricted scientific sense. The Court held that bullion is gold or silver in the mass and includes precious metal alloyed with a small percentage of base metal where the alloy does not cease to be understood in trade and ordinary usage as gold or silver. The substance sold by the petitioners contained 91.66 per cent gold and 8.33 per cent copper and was treated in commercial circles as bullion gold. The reasoning rejected the view that bullion necessarily means only pure gold or pure silver and applied the ordinary trade meaning of words used in a sales tax statute.
Conclusion: Sovereign gold of the kind sold by the petitioners was held to be bullion within Entry 74, and tax was payable only at the rate specified there under section 5(3)(a), not at the general rate under section 5(1).
Ratio Decidendi: Words of everyday or commercial use in a taxing statute must be interpreted in their popular and trade sense unless the statute indicates otherwise.
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