2011 (4) TMI 1033 - HC - VAT and Sales Tax

Classification of homoeo globules under VAT Act as 'sugar made in India' entitles tax exemption. Literal interpretation favored.

The court held that homoeo globules are classified under Sl. No. 35A of the VAT Act as 'sugar manufactured or made in India,' entitling them to tax ... Principal of classification - VAT on homoeo globules - West Bengal Value Added Tax Act, 2003 - whether homoeo globules imported by the petitioner should fall within the residuary clause of the VAT Act notwithstanding the fact that Sl. No. 35A of the Schedule A contains an item, namely, 'sugar manufactured or made in India - held that:- homoeo globules containing only sugar in purer form than the ordinary sugar available in market cannot be placed under residuary heading when there is a specific entry under section 35A to the effect 'sugar manufactured or made in India' without any reference to any common man's description, density, form, shape, colour or mode of user thereof as indicated in various other entries.. Where the statute, in respect of some of the items of the Schedule, has explained those by further describing how it is popularly described by a common man and in respect of some others, no such explanation has been given, the principle of applying 'popular meaning' theory to the latter ones is not tenable. homoeo globule imported by the writ petitioner is entitled to the benefit of item No. 35A for which no tax is payable and direct the assessing authority to act accordingly. Issues Involved:1. Classification of homoeo globules under the VAT Act.2. Interpretation of the term 'sugar manufactured or made in India' in Sl. No. 35A of Schedule A to the VAT Act.3. Application of 'popular meaning' versus 'scientific or technical meaning' in tax classification.Issue-wise Detailed Analysis:1. Classification of Homoeo Globules under the VAT Act:The primary issue was whether homoeo globules imported by the petitioner should be classified under Sl. No. 35A of Schedule A to the VAT Act as 'sugar manufactured or made in India' or under the residuary entry in Schedule CA, subject to a 12.5% tax. The Sales Tax Officer's memo had classified the homoeo globules as an unspecified item under Schedule CA, leading to the dispute.2. Interpretation of 'Sugar Manufactured or Made in India':The court examined whether homoeo globules, which contain sugar alone and are manufactured in India by purifying ordinary sugar to 99% purity, fall under the term 'sugar manufactured or made in India' in Sl. No. 35A of Schedule A. The petitioner argued that the clear and unambiguous language of Sl. No. 35A should include homoeo globules since they are made of pure sugar. The court noted that under the West Bengal Sales Tax Act, 1954, and subsequently the VAT Act, 'sugar' had been tax-free without any specific limitations or exclusions. The court concluded that the homoeo globules, being pure sugar, should be classified under Sl. No. 35A.3. Application of 'Popular Meaning' versus 'Scientific or Technical Meaning':The respondent argued that the Tribunal rightly relied on the popular meaning of sugar, citing the Supreme Court decision in Alpine Industries v. Collector of Central Excise, where 'lip salve' was classified based on its popular use rather than its technical composition. However, the court distinguished this case, stating that homoeo globules are pure sugar in a different form and do not contain any additional materials. The court referenced the Supreme Court's ruling in the State of Gujarat v. Sakarwala Brothers, which held that the term 'sugar' includes all forms of sugar, regardless of shape, texture, or name. The court also highlighted that the VAT Act explicitly describes some items by their popular names but does not do so for 'sugar,' indicating that the literal meaning should apply.Conclusion:The court set aside the Tribunal's order and the Sales Tax Officer's memo, holding that homoeo globules are entitled to the benefit of Sl. No. 35A for which no tax is payable. The court directed the assessing authority to act accordingly, emphasizing that when two views are possible, the one favoring the assessee should be adopted. The court concluded that the popular meaning theory is not tenable where the statute does not provide specific descriptions, and the literal meaning should be applied. The judgment was agreed upon by both judges, with no order as to costs.