TaxTMI 
TaxTMI 
2010 (4) TMI 688
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was justified in law in throwing the burden on the Applicants to prove that the steam was a chemical as understood in common parlance and thereby, confirming the levy of sales tax on its sales @ 10%? 3. All these references give rise to the common issues between common parties based on identical set of facts including the period of assessment, as such they were heard together, so a single judgment will dispose of these references. The facts 4. The material facts briefly are stated as follows :- The Applicant is a manufacturer of Sulpheric Acid and other chemicals and products. During the process of such manufacturing activity, the steam is generated which is being sold by the Applicant as a by-product on which the Applicant collected the tax @ 4% on the footing that the steam was a chemical. 5. The Applicant states that, the steam is chemical under the BST Act, 1959, thus, taxable @ 4% under the Notification Entry No. 233 issued under Section 41 of the BST Act, 1959 during the material time; whereas the Assessing Authority held that the steam was covered by Entry No. 102 of Schedule-C Part-II, as such, not classifiable as chemical. The contentions of the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mmencement of the Maharashtra Tax Laws (levy Amendment and Validation) Act, 1922. (Mah.XI of 1992). To the extent to which the amount of sales tax, or as the case may be, purchase tax exceeds four paise in the rupee. Nil Government Notification, Finance Department, No. STA-1092 /54B/Taxati on-2/ dated the 1st June, 1992. w.e.f. 1-5-992 to 31-5-1992 Schedule Entry No.C-II-102 :- 102 All Goods other than those specified from time to time in the other schedules and the preceding entries of this schedule. 10% 10% 1-12-1982 to 31-8-1990 Submissions 10. Mr. Joshi, learned counsel appearing for the Applicant/Assessee submitted that the steam is classifiable as chemical and therefore, the same is liable to be covered under Entry No. 233, as such the Applicant is liable to pay the sales tax @ 4% only. 11. In order to buttress his submission, Mr. Joshi pressed into service the meaning of the word "steam" given in "Twentieth Century Chambers Dictionary (1972 Edition)" as "a substance obtained by Chemical means or used in chemical operations". He further submitted that the steam is chemical as per the science of chemistry and chem....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 9 Vijay Foundry & Machinery Works v. State of Gujarat - 84 STC 152 (HC-Gujarat). 10 Brooke Bond India Limited v. State of Kerala (HC-Kerala) - 84 STC 334 11 Televista Electronics (P) Ltd. v. Commissioner of Sales Tax (HC-Delhi) - 87 STC 410 12 Hardcastle, Waud & Co.Ltd. v. Stte of Tamil Nadu (HC) - 89 STC 352 13 Mysore Agro Service Centre v. State of Karnataka (HC) - 90 STC 401 14 Mysore Ammonia (P) Ltd. v. State of Karnatka (HC) - 90 STC 439 15 Haran D. Manufacturing Co. v. State of Gujarat (HC) - 91 STC 130 16 N. Sundareswaran v. State of Kerala (HC) - 91 STC 476 17 Gupta Agencies v. State of Punjab (HC) - 92 STC 543 18 Quality Chemicals v. State of Gujarat (HC) - 94 STC 450 19 Union Carbide India Ltd. v. State of A.P. - 98 STC 1 (SC) 20 Electro Enterprises v. Commissioner of Sales Tax, (HC) - 98 STC 116 21 Bombay Che....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m is to be understood as chemical and thus, the authorities below erred in coming to the conclusion that for the purpose of sale tax the meaning of common parlance is to be taken into consideration. 16. Lastly, Mr. Joshi submitted that the Tribunal in Second Appeal No. 101/1992 vide its judgment dated 31-1-1994 held that the steam is chemical and therefore, the Applicant is entitled for the same benefit in the present case also. He further submitted that the Government of Maharashtra issued Notification dated 7-10-1995 and enlisted certain goods on the basis of excise tariff to be chemicals. This list of chemicals contains an item 28-11-90 which pertains to steam sold by the Applicant and that steam was considered as a chemical by the State Government. On these submissions, Mr. Joshi urged that the questions of law referred to this Court may be answered in favour of the Applicant and against the Revenue. 17. Per contra :  Mr. Sonpal, the learned "A" Panel Counsel appearing for the Respondents/Revenue submitted that the judgment in Second Appeal No. 101/1992 was considered by the Tribunal in the latter judgment wherein the Tribunal observed that the scientifically speakin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of fatty acids, functionally, it is understood as a substance possessing the characteristic of soap like properties. Therefore, the Court held that the detergents are nothing but soap. Mr. Sonpal, therefore, submitted that applying this test where a word has a scientific or technical meaning and also an ordinary meaning then the ordinary meaning must be given consideration while deciding the classification under the Sales Tax Laws. 21. Mr. Sonpal further submitted that the Applicant has laid much stress on scientific definitions of the words and the expert opinion. According to him, under the Sales Tax laws the common man's view has to be preferred but there is no bar to refer to technical or scientific character and in large number of cases the dictionary meaning or technical literature were considered by the Courts while interpreting the schedule entries. But in all those cases before applying this test the Court held that while construing the word which was of technical or scientific character, its scientific or technical meaning required to be assigned. The steam is not a word of scientific or technical character, but commonly understood as a steam. He further submitt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at in common parlance the steam is treated as chemical. 23. Mr. Sonpal further submitted that the second line of argument advanced by the Applicant that w.e.f. 7-10-1995 the Government has issued a list of chemicals for the purpose of BST Act, 1959 and in that list the description of the goods at 28-11-90 pertains to the steam. Therefore, according to the Applicant the steam is considered as a chemical by the Government even prior to the date of the said notification. In this regard, the Tribunal observed that this notification is not having retrospective effect and the Applicant cannot take help of subsequent amendment to interpret the prior entry, so the subsequent amendment cannot be read into the earlier entries. In support of this submission, Mr. Sonpal relied on the judgment in the case of M/s. National Engineering Company Pvt. Ltd. v. State of Tamil Nadu. (84 STC 457). He further submitted that in any case the subsequent amendment cannot be used to decide the assessment of the prior years because the subsequent amendment has not been given retrospective effect. On these submissions, Mr. Sonpal submitted that both the questions referred herein above are required to be answ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....therefore must be understood in the way in which a common man will understand it. In other words, the test is as to what a common man viewing or dealing with, the article will understand it to be. In doing so, the particular use to which a particular customer may put it should be eschewed from consideration. 8...... 9. It is the way in which a common man dealing with the article will understand it, that is determinative of the character of the goods. There cannot be any dispute that nobody will understand these bolts and nuts as spare parts of automobiles/tractors, but only as iron and steel articles dealt with in an hardware shop. We therefore hold that the bolts and nuts dealt with by the Assessee cannot be treated as spare parts of automobiles or of tractors; on the other hand, they have to be classified only as nuts and bolts which squarely fall as iron and steel articles not otherwise provided under entry No. 45 or 99 of the First Schedule during the respective periods. 10....... 11....... 12....... 13. A person seeing an automobile jack is not likely to understand it as a mere iron and steel article. He is likely to understand it only as an adjunct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e conversant with the subject matter with which the statute is dealing, would attribute to it". Such words must be understood in their "popular sense". The particular terms used by the legislature in the denomination of articles are to be understood according to the common commercial understanding of those terms and not in their scientific and technical sense "for the legislature does not suppose our merchants to be naturalists or geologists or botanists". The expression "timber", it seems to us, has an accepted and well recognised legal connotation and is nomen juris. It has also a popular meaning as a word of everyday use. In this case, the two meanings of "timber", the legal and the popular, coalesce and are broadly subsumed in each other." 29. The Apex Court, in the matter of Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola reported in 1961 (12) STC 286 held that the word must be construed not in any technical sense but as understood in common parlance. Head-note of the judgment reads thus :- "The word "vegetables" in item 6 of Schedule II of the C.P and Berar Sales Tax, 1947, must be construed not in any technical sense nor from the botanical point of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al has rejected the said contention and has held that it could not be proved that the proportion of the impregnated materials had reached such a level in the impregnated fabrics that the final product had ceased to contain the characteristics of a fabric so as to take it out of the purview of the cotton fabric as set out in Item 19(iii) of the Tariff. The Tribunal was of the view that the term "cotton fabric" covers a wide range. As regards the submission that phenol formaldehyde resin with which the fabric is impregnated is not a plastic material, the Tribunal held that the expression "artificial plastic materials" in Item 19(iii) embraces within itself resin also since plastic is a generic term and as understood in popular sense it covers resin. The said finding recorded by the Tribunal has been assailed by Shri J. Vellapally, the learned senior counsel appearing for the appellant. Shri Vellapally has invoked the "COMMON PARLANCE TEST" and has submitted that in common parlance "Prepeg-F" cannot be regarded as cotton fabric. The learned counsel has placed reliance on the decision of this Court in Purewal Associates Ltd. v Collector of Central Excise. We do not find any substance i....