TaxTMI 
TaxTMI 
1994 (2) TMI 320
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...."B.P." denotes the grade of Balsam Tolu i.e. "British Pharmacopeia Grade". A consignment containing the above item arrived the Port of Bombay sometime in the year 1990. The said consignment was cleared by the customs as `drugs' covered by the above licence. It may be pertinent to observe in this connection that petitioner had imported Balsam Tolu B.P. in the past too. Althroughout it was classified by the BMC itself as a drug and no octroi was levied on the import thereof in Greater Bombay as octroi is not leviable on drugs. 3. It may also be pertinent in this connection that sometime in the year 1981, some officials of the BMC in charge of octroi tried to depart from this interpretation and classify `Balsam Tolu B.P.' imported by one M/s. Fair Deal Corporation Pvt. Ltd. as an article of food or drink falling under Item 8 of Schedule `H'. The above action being challenged by the said concern before this Court by filing a writ petition (which was numbered as Writ Petition No. 2004 of 1983) the Deputy Assessor and Collector (Octroi) of BMC, by his letter dated 6 January, 1984 informed the advocate of the said concern that no octroi was leviable on `Balsam Tolu B.P.' and that ....
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.... under the Drugs Control Act. In that view of the matter, according to the petitioner, the goods imported by the petitioner cannot be classified as a food essence. 5. In reply, learned Counsel for the BMC Mr. Bharucha submits that the fact that in the past Balsam Tolu B.P. was classified as a drug is not relevant as the principle of estoppel has no application in such matters. According to him, the user of Balsam Tolu B.P. by the petitioner is of no relevance. According to him, the language of Item 8 of Schedule `H' is plain and unambiguous and as such the doctrine of contemporaneous expositio has no application. Counsel submits that the popular commercial meaning of word appearing in the list of items in a fiscal statute should be considered in matters of classification. According to the Counsel, classification is a matter of evidence and whether a particular item falls under one entry or the other should be left to the authorities concerned to decide by examining witnesses etc. He has produced a number of dictionaries and other literatures to show that though Balsam Tolu is used in pharmaceutical preparations, it can also be used as a food essence. 6. I have caref....
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..... Therefore it is for administration to decide whether it should be made liable for octroi under item No. 8 as "Food essence" or not." (Emphasis supplied) It is evident from the above report that the Analyst nowhere said that Balsam Tolu is not a drug item or that it is not an item which can be used as medicine. He himself mentioned a number of its medical uses and left it to the BMC to decide whether it can be assessed under Item 8 Schedule `H' or not in view of the fact that the petitioner was using it as medicine. Thus, it is clear that no new material has come in the possession of the BMC to justify any departure from the classification accepted and acted upon by it for more than two decades. 7. It is well settled that when a particular construction has for some years been put upon an item of taxable commodity in fiscal statute in favour of the tax payer and that construction has been generally acted upon and acquiesced in by the authorities, a strong presumption arises in favour of that construction. Departure from that interpretation is not permitted except for very cogent reason. As observed by the Supreme Court in C.I.T. v. Balkrishna Malhotra (1971) 81 ....
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....-juices and all beverages, Glucose, Dextrose or any fruit sugar, oilman stores (except edible oils), preserved provisions, baking or curry powder, sachharin, all kinds of food colours and essences, glucose of all other kinds, malt extract, honey, papad, meat-fresh or preserved for whatever use, and all kinds of food or drink not specifically provided for, excepting whole milk, toned milk and skim milk powder. 7 per cent ad valorem. 3^1/2 per cent ad valorem (non-refundable) on Dried fruits and Dried Nuts 3 per cent ad valorem for forsen mutton carcasses 3 per cent ad valorem for unwrapped Bread 3 per cent ad valorem for biscuit costing not more than Rs. 16 per Kg. 2 per cent ad valorem for Ice-cream only. From the above item, it is evident that all commodities specified therein are articles of food and drink. The expression relevant for the present purpose is "all kinds of food colours and essence". This is preceded by "baking or curry powder, sachharin" and followed by "glucose of all other kinds, malt extract, honey, papad" etc. It is evident from the items of food and drink enumerated in Item 8 that items of day-to-day use as food and drink only are included....
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....ustry or in the market or, in other words how these are dealt with by the people who deal in them. This test was applied by the Supreme Court in Delhi Cloth & General Mills Co. Ltd. v. State of Rajasthan 1980 (6) E.L.T. 383 (S.C.) = (1980) 46 STC 256, where it was held that if there is one principle fairly well-settled it is that the words or expressions must be construed in the sense in which they are understood in the trade, by the dealer and the consumer. It is they who are concerned with it, and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the statute was enacted. Applying the same principle, it was held in Chiranjit Lal Anand v. State of Assam (1985) 60 STC 89 (S.C.), that "meat on hoof" has to be understood in the context of persons who are dealing in it and so understood it falls within the item "meat". The Commercial parlance rule was also referred to in Aluminium Cables Ltd. v. Union of India - 1985 (21) E.L.T. 3 (S.C.) = (1987) 64 STC 180 (S.C.). 12. Though the common parlance or commercial parlance tests are the generally accepted tests, various other tests have been evolved from time to time ....
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....ded in the statute for ascertaining the correct meaning of a fiscal entry, the same should be construed as understood in common parlance or trade or commercial parlance. Such words must be understood in their popular sense. The strict or technical meaning or the dictionary meaning of the entry is not be resorted to. The nomenclature given by the parties to the word or expression is not determinative or conclusive of the nature of the goods. The same will have to be determined by application of the well-settled rules or principles of interpretation which have been referred to as "common parlance" rule, "trade or commercial parlance" rule, "commonsense rule of interpretation" and "user test". The application of the principles will again depend on the facts and circumstances of each case. No test or tests can be said to be of universal application. Each case will have to be decided by applying one or more rules of interpretation depending upon the facts of that particular case. 15. Applying the above principles, it may now be examined whether Balsam Tolu B.P. is a drug or a food essence. I have perused various Pharmacopoeia and other literature where the composition, use, etc.....
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....alsam preparations. In the premises, in my opinion, the BMC had correctly interpreted this item althroughout in the past as a "drug". There is no justification for deviating from the above interpretation and to hold it a food essence falling under Item 8. For the reasons set out above, the action of the BMC to change the classification of Balsam Tolu B.P. from "drug" to "food essence" is not correct. It is not justified in departing from the interpretation given and acted upon by it after long two decades without any cogent reason. 18. Before I conclude, it may be expedient to mention that two other contentions were also advanced by the learned Counsel for the respondents. First, that interpretation of an item of taxable goods is a question of fact to be decided on the basis of evidence, hence this Court should not examine the same in exercise of its writ jurisdiction. Second, that if the item can reasonably bear two interpretations, and one of them which is in favour of the revenue was adopted, this Court has no jurisdiction to interfere with the same merely because the other interpretation favourable to the subject appears to the Court as the better one to adopt. 19.&e....