1991 (6) TMI 247 - HC - VAT and Sales Tax

Glass bottles not considered glassware under Kerala Sales Tax Act. Tax revision cases dismissed.

Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam Versus K. Ummul Kulsu

Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam Versus K. Ummul Kulsu - [1994] 92 STC 450 (Ker) Issues Involved:1. Whether glass bottles and phials come under entry 111 of the First Schedule to the Kerala General Sales Tax Act, 1963.2. Whether glass bottles and phials are exigible to tax at 10% of the sales turnover or only at the general rate applicable to unclassified items.Issue-Wise Detailed Analysis:1. Classification of Glass Bottles and Phials under Entry 111:The primary issue in these tax revision cases is whether glass bottles and phials fall under entry 111 of the First Schedule to the Kerala General Sales Tax Act, 1963, which pertains to 'glassware.' The assessing authority initially treated these items as 'glassware' and levied a 10% tax. However, the Sales Tax Appellate Tribunal held that empty bottles and phials are not 'glassware' and should be taxed at the general rate for unclassified items. This decision was challenged by the Revenue.2. Interpretation of 'Glassware':The term 'glassware' is not defined in the Kerala General Sales Tax Act. The Supreme Court's decision in Indo International Industries v. Commissioner of Sales Tax [1981] 47 STC 359 established that in the absence of a statutory definition, terms should be understood in their popular or commercial sense, as recognized by those dealing with the items. The Supreme Court emphasized that the meaning in common parlance should be adopted over scientific or technical definitions.3. Precedents and Common Parlance:The Supreme Court and various High Courts have consistently held that items should be classified based on their common understanding in trade. For instance, in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 STC 286, the Supreme Court ruled that 'vegetables' should be understood as commonly used and not in a technical sense. Similarly, in Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 63 STC 322, the Supreme Court held that glass mirrors are not 'glassware' under the Central Excises and Salt Act, 1944, as they are not commonly understood as such.4. Trade Practice and Legislative Intent:The court noted that glass bottles and phials are not typically sold in glassware shops and are not considered 'glassware' by those dealing in such items. The Kerala General Sales Tax Act itself suggests that glass bottles and phials are not included under 'glassware,' as other specific glass items were listed separately in amendments, but glass bottles and phials were not. This omission indicates that the legislature did not intend to include them under 'glassware.'5. Comparison with Other States' Legislation:The court observed that in other states, such as Karnataka and Andhra Pradesh, glass bottles are explicitly mentioned in the relevant tax entries. The absence of a similar mention in the Kerala Act further supports the conclusion that glass bottles and phials are not intended to be classified as 'glassware.'Conclusion:The court concluded that glass bottles and phials do not fall under the term 'glassware' as per entry 111 of the Kerala General Sales Tax Act. They should be taxed at the general rate applicable to unclassified items. The tax revision cases were dismissed, affirming the Tribunal's decision that glass bottles and phials are not exigible to tax under entry 111.Petitions dismissed.