1977 (3) TMI 147 - HC - VAT and Sales Tax

Classification of glass bangles under sales tax law: 7% tax rate upheld over 5% contention

The court held that glass bangles are classified as specified goods under entry No. 38 of the Orissa Sales Tax Act, subject to a 7% tax rate, rejecting ... - Issues:Interpretation of entry No. 38 of the Orissa Sales Tax Act - Whether glass bangles are covered by specified goods or considered unclassified goods.Analysis:The judgment involves the interpretation of entry No. 38 of the Orissa Sales Tax Act concerning the classification of glass bangles for taxation purposes. The assessee, a dealer in glass bangles, contested the imposition of tax at 7% under entry No. 38, claiming it should be taxed at 5% as unclassified goods. The State Government's notification specified glassware at 7%, excluding certain items. The primary issue was whether glass bangles fell under the ambit of 'glassware' in entry No. 38 or should be considered unclassified goods.The court emphasized the literal interpretation of statutes, stating that tax liability must be determined strictly as per the law's provisions. The principle of construction dictates that any reasonable doubt should benefit the subject. The court examined the common parlance theory to interpret the term 'glassware' in entry No. 38. The absence of a statutory definition led to considering the ordinary meaning of glassware as 'articles made of glass.'The court analyzed previous cases, such as Haji Jamaluddin Manguji v. State and Commissioner of Sales Tax, U.P. v. Manohar Glass Works, which established that 'glassware' includes all articles made of glass. The court rejected the argument that a later notification on tax-free goods affected the interpretation of entry No. 38 for the relevant assessment years. The judgment highlighted that glass bangles, as finished glass articles sold in ordinary shops, fall under the category of glassware.Ultimately, the court agreed with the Tribunal's conclusion that glass bangles are covered by entry No. 38 of taxable goods and cannot be treated as unclassified goods. The judgment affirmed that glass bangles are subject to tax at 7% under the specified goods category. The reference was answered in the affirmative, with no order as to costs.In conclusion, the judgment provides a detailed analysis of the interpretation of statutory provisions, common parlance theory, and precedent cases to determine the tax classification of glass bangles under the Orissa Sales Tax Act. The decision clarifies the classification of glass bangles as specified goods under entry No. 38, emphasizing the importance of a strict and literal interpretation of tax laws.