M/S. Motipur Zamindary Co. (P) Ltd. Vs.
The State of Bihar  INSC 325 (20 November 1961)
SINHA, BHUVNESHWAR P.(CJ) HIDAYATULLAH, M.
CITATION: 1962 AIR 660 1962 SCR Supl. (1) 498
CITATOR INFO :
R 1977 SC1638 (2) R 1979 SC 300 (3) RF 1986
SC 626 (12) R 1992 SC 224 (12)
Sales Tax-Exemption of green vegetables-Sugar
Cane, if falls within exemption-Dealer-Producer of sugar cane, whether a
dealer-Bihar Sales Tax Act, 1947 (Bihar 19 of 1947), ss. 2(c), 6-Notification
No. 9884-F 7 dated August 28, 1947-Bihar Annual Finance Act, 1950.
Under s. 6 of the Bihar Sales Tax Act, 1947,
the Government issued a notification exempting certain goods from the 499
payment of sales tax, including "green vegetables other than potatoes,
except when sold in sealed containers". The appellant who was a producer
of sugar can was assessed to sales tax. He contended that sugar cane was a
green vegetables and was exempted from tax and that he was not a dealer as
defined in s. 2 (c) of the Act and could not be assessed to sales tax.
^ Held, that sugar cane was not a green
vegetable and was not exempted under the notification. The word
"vegetables" in taxing statutes was to be understood as in common parlance
i.e. denoting class of vegetables which were grown in a kitchen garden or in a
farm and were used for the table. The dictionaries defined sugar cane as a
"grass." Ramavtar Budhaiprasad v. Assistant Sales Tax Officer, Akola, A.I.R. 1961 S. C. 1325, followed.
The State of Bombay v. R. S. Phadtare, 
7 S. T. C. 495, disapproved.
Held, further, that the appellant was a
dealer within the definition in s. 2(c). Section 2(c) was amended by the Bihar
Annual Finance Act, 1950. The amended was not a temporary amendment for only
one year; the amended section was applicable to the present case. The amending
Act did not require the assent of the President as the matter fell entirely
within entry 54 of the State List.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 185 to 187 of 1961.
Appeals by special leave from the judgment
and order dated May 13, 1959, of the Patna High Court in Misc. Judicial Case
No. 352 of 1957.
WITH Petitions Nos. 163 to 165 of 1959.
Petitions Under Art. 32 of the Constitution of
India for the enforcement of Fundamental Rights.
M. C. Setalvad, Attorney-General of India, Veda Vyasa and Naunit Lal, for the appellants/petitioners.
A. S. R. Chari, D. P. Singh., M. K. Ramamurthi,
R. K. Garg and S. C. Agarwala, for the respondents.
500 1961. November 20. The Judgment of the
Court was delivered by KAPUR, J.-The principal question raised in these appeals
and petitions under Art. 32 of the Constitution is whether sugar cane falls
within the term "green vegetables" and is therefore exempt from sales
tax under the exemption given by the notification dated August 28, 1947, issued
under s. 6 of the Bihar Sales Tax Act 1947, (Bihar 19 of 1947), hereinafter
called the 'Act'. After hearing the arguments in these appeals and petitions we
announced our decision dismissing them with costs and we now proceed to give
our reasons for the same.
The three appeals by special leave are
brought by the assessee and relate to assessment of sales tax for three years,
1950-51, 1951-52 and 1952-53 for which the amount of sales tax levied was Rs.
28,866, Rs. 23,383 and Rs. 23,298 respectively. Besides the three appeals the
assessee company has filed three petitions under Art. 32 challenging the
constitutionality of the assessments. In this judgment the appellant and the
petitioner is a private limited company and it will be termed
"appellant" and the State of Bihar which is respondent will be termed
The appellant took an objection to the
assessment and filed appeals to the Deputy Commissioner of Commercial taxes and
then a revision to the Board of Revenue and then at its instance the following
question was referred by the Board of Revenue to the High Court for opinion:-
"Whether sugar cane is a green vegetable within the meaning of item 6 of notification
No. 9884-FT dated 28-8-47 and as such exempt from taxation." The High
Court answered the question against the appellant and held that "sugar
cane" was not 501 included in the term "green vegetables" and it
is the correctness of that answer which has been canvassed before us. In the
petitions under Art.
32 of the Constitution it was contended that
the appellant being a producer of sugar cane was not a "dealer"
within the meaning of the Act and therefore no tax was payable on sale of sugar
cane by it.
The exemption under the Act is provided under
s. 6 of the Act which, at the relevant time, was as follows:- S. 6 "No tax
shall be payable under this Act on the sale of any goods or class of goods
specified in this behalf by the (State) Government by notification in the
Official Gazette, subject to such conditions as may be mentioned in the
Provided no notification shall be issued
under this section without giving in the Official Gazette such previous notice
as the State Government may consider reasonable, of its intention to issue such
notification." Under s. 6 of the Act the notification relied upon was
issued on August 28, 1947. This was notification No. 9884-FT which was in the
following terms:- "In exercise of the powers conferred by section 6 of the
Bihar Sales Tax Act, 1947 (Bihar Act XIX of 1947), and in supersession of the
previous notifications on the subject the Governor of Bihar is pleased to
direct that no tax shall be payable under the said Act on the sale of goods
specified in the second column of the schedule hereto annexed subject to the
exceptions, if any, set out in the corresponding entry in the third column
502 THE SCHEDULE Serial Description Exception
subject to which the No. of goods. exemption has been allowed.
6 Green vegetables Except when sold in sealed
other than pota- containers.
........." The question raised is that
sugar cane falls within the term "green vegetables" in entry 6 of the
Schedule and is therefore exempt from assessment to Sales tax. In support of
this contention counsel for the appellant relied upon a judgment of the for the
appellant relied upon a judgment of the Bombay High Court, The State of Bombay
v. R. S. Phadtara (1) where it was held that sugar cane is "fresh
vegetable" and is therefore exempt from sales tax under a similar
notification issued under the Bombay Sales Tax Act. Changla C. J., there
observed at page 496 as follows:- "In its plain and natural meaning a
"vegetable" clearly is wide enough to cover "sugar cane";
but what is urged by the Advocate General is that we must not give it that wide
meaning but must give it the popular meaning as under stood by people who deal
in vegetables or eat vegetables, and it is urged that from that narrow and
restricted point of view sugar cane is not vegetable.
This is a taxing statue and if in favour of
that construction which gives relief to the subject. That was exactly the 503
approch of the Sales Tax Tribunal and in our opinion that approach was a very
proper one." This observation is not in accord with the opinion given by
this Court in Ramaytar Badhriprasad v.
Assistant Sales tax Officer, Akola (1) in
which under an almost identical entry it was held that "betel leaves"
is not included in the term "vegetables". After quoting with approval
a passage from the judgment of the Nagpur High Court, Madhya Pradesh pan
Merchants Association v. State of Madhya Pradesh (2) this court said:
"the word "vegetable" in
taxing statutes is to be understood as in common parlance i.e. denoting class
of vegetables which are grown in a kitchen garden or in a farm and are used for
the table." If that is the meaning of the word "vegetables"
sugar cane cannot fail within entry 6 which relates to green vegetables. In
Webster's dictionary "sugar cane" has been defined as "a grass
extensively grown in tropical and warm regions for its sugar" and in Oxford
dictionary it is defined as "a tall peronnial grass cultivated in tropical
and sub-tropical countries and forming the chief source of unmanufactured
Therefore it cannot be said that sugar cane
falls within the definition of the words "green vegetables".
The second question which was raised before
us and which arises in the petitions under Art. 32 is that the appellant
company is not a "dealer" within the meaning of the word as defined
in s. 2(c) of the Act which is as follows:- " "dealer" means any
person who sells or supplies any goods (including goods sold or supplied in the
execution of a contract) 504 whether for commission, remuneration or otherwise
and includes any family or a Hindu joint family, the Government and any society
club or association which sells or supplies goods to its members".
The words of this sub-section are very wide
and cover the case of the appellant and therefore this point is also without
substance and must be rejected. But it was argued that the definition of the word
"dealer" in the Act which was amended by Bihar Annual Finance Act
1950 is applicable only for the financial year beginning April 1, 1950, and not for subsequent years and for that aid was sought from the preamble to the
Bihar Annual Finance Act 1950. That preamble is as follows:- "whereas it
is expedient to amend the Bihar Sales Tax Act, 1947, and the Bihar Agricultural
Income Tax Act, 1948, to levy a tax on passengers and goods carried by public
service vehicles and public carries and to lay down rates on Sales Tax payable
under Bihar Sales Tax Act 1947 to fix limit of taxable agricultural income to
lay down rates of agricultural Income Tax Act and Super Tax chargeable under
Bihar Agricultural Income Tax Act, 1948 for the financial year beginning on the
1st day of April 1950 and to make further provisions in connection with the
finance of this State of Bihar".
The preamble cannot limit or change the
meaning of the plain words of s.2(c) of the Act which apply to the case of the
appellant and therefore the amended section is applicable to the present case.
It is an erroneous approach to the question
to say that because of the words "for the financial year beginning on the
first of April 1950" in the particular context in the preamble, the
definition of the word "dealer" was amended only for one year Nothing
has been shown indicating that section 505 (2)(i) of Bihar Annual Finance Act
intended to effect a temporary amendment in the previous definition of the word
"dealer" in cl(c) of s.2 of the Act. The contention is therefore
It was also submitted that the assent of the
President was not given to the Bihar Annual Finance Act 1950. In our opinion
that submission is equally without force because tax on sale of goods is a
matter entirely within entry 54 of the State List and the amendment made in the
definition of the word "dealer" in the Act did not require the assent
of the President.
In our opinion the appeals and the petitions
under Art. 32 are without merit and are therefore dismissed with costs. One
Appeals and writ petitions dismissed.