Common parlance reading of tax exemption entry keeps distilled water taxable under the residuary rate.

Distilled water was held not to fall within the exemption entry for "water" because taxing terms are read in their common parlance sense, and the surrounding references to aerated water and mineral water showed a focus on water meant for human consumption. Reassessment under section 12(8) could be initiated on the basis of an audit report because the phrase "if for any reason" is of broad import and is not confined by the narrower income-tax reopening concept of "information". In the absence of a specific entry, distilled water was taxable under the residuary entry at 8 per cent.

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Issues: (i) Whether distilled water falls within the expression "water" in entry 39 of the tax-free goods under the Orissa Sales Tax Act, 1947; (ii) whether reassessment could be initiated under section 12(8) of the Orissa Sales Tax Act, 1947 on the basis of an audit report; (iii) whether, in the absence of a specific entry, the sale of distilled water was taxable under the residuary entry and at what rate.

Issue (i): Whether distilled water falls within the expression "water" in entry 39 of the tax-free goods under the Orissa Sales Tax Act, 1947.

Analysis: Words in a taxing entry are to be understood in their common parlance sense. The expression "water" in the exemption entry, read with "aerated water" and "mineral water", indicates water meant for human consumption. Distilled water is not ordinarily understood as water meant for human consumption, even if it may be used for medicinal preparation or in batteries.

Conclusion: Distilled water does not fall within entry 39 and is not exempt as "water".

Issue (ii): Whether reassessment could be initiated under section 12(8) of the Orissa Sales Tax Act, 1947 on the basis of an audit report.

Analysis: The analogy drawn from the law on "information" under section 34 of the Income-tax Act, 1922 and section 147 of the Income-tax Act, 1961 was not accepted as controlling. Section 12(8) uses the wider expression "if for any reason", which is of broad import and is not confined by the same limitations as the income-tax reopening provisions.

Conclusion: Reassessment under section 12(8) could validly be initiated on the basis of the audit report.

Issue (iii): Whether, in the absence of a specific entry, the sale of distilled water was taxable under the residuary entry and at what rate.

Analysis: Since distilled water was not exempt and there was no specific entry covering it, the residuary entry governed the sale. Under the Act, sales are taxable unless exempted, and the rate applied by the department was 8 per cent.

Conclusion: The sale of distilled water was taxable under the residuary entry at 8 per cent.

Final Conclusion: The writ petition failed because distilled water was neither exempt under the water entry nor outside the charging scheme of the Act, and the reassessment proceedings were maintainable.

Ratio Decidendi: In construing a taxing exemption entry, words are to be understood in common parlance, and a reopening provision framed in wide terms such as "if for any reason" is not confined by the narrower concept of "information" under the income-tax reopening provisions.

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