Commissioner of Sales Tax U.P. Vs.
M/S. S. N. Brothers, Kanpur  INSC 269 (2 November 1972)
REDDY, P. JAGANMOHAN
CITATION: 1973 AIR 78 1973 SCR (2) 852 1973
SCC (3) 496
CITATOR INFO :
RF 1977 SC 132 (15) D 1977 SC 597 (41) R 1988
SC2176 (4) R 1988 SC2229 (9) RF 1990 SC1579 (44) RF 1991 SC 494 (3)
U.P. Sales Tax Act (15 of 1948) s. 3 and
Notification under s. 3A 'Food colors' if 'dyes and colors' and 'Syrup
essences' if 'scents and perfumes'
Item 10 of the notification under s. 3A of
U.P. Sales-tax Act, 1948, referred to 'dyes and colors' and compositions
thereof, and item 37 to 'scents and perfumes'. The respondent (dealer) imported
from outside U.P., food colors and syrup essences. The appellant held that the
food colors fell under item 10 of the notification and syrup essences under
item 37 of the notification, and that they should be taxed at six paise per
rupee under the Act. The dealer contended that the tax on food colors and syrup
essences should be at the rate of two paise per rupee as unclassified goods
under s.3 of the Act. The High Court, in reference, agreed with the dealer's
Dismissing the appeal to this Court,
HELD : The words 'dyes and colors' and the
words 'scent and perfumes' have to be construed in their context and in the
sense as ordinarily understood and attributed to these words by people usually
conversant with and dealing in such goods.
Similarly, the words 'food colors' and 'syrup
essences', which are descriptive of the class of goods, the sales of which are
to be taxed under the Act, have to be construed in the sense in which they are
popularly understood by those who deal in them and who purchase and use them.
'Food colors' and 'syrup essences' are edible goods, whereas 'dyes and colors'
and 'scents and perfumes', as specified in entries 10 and 37, prima facie do
not connote that they are edible goods. The scheme of the list in the
notification also suggests that, apart from undoubted edible goods, in cases
where the import of the specified goods is wide enough to include both edible
and non-edible categories, then the intention has been clearly expressed
whether or not to in- clude edible goods. Therefore, entries 10 and 37 are not
intended to extend to edible colors like 'food colors' and edible essences like
'Syrup essences'. In any event, the view taken by the High Court is not so
grossly erroneous that it should be interfered with in a special leave appeal
under Art. 136. [856 F-G; 858 D-E, F-H; 859 A-B] Sarin Chemical Laboratory v.
Commissioner of Sales tax  26 S.T.C. 330, Ramvatar Budhiprasad v.
Assistant Sales Tax Officer, Akola,  12 S.T.C. 286, Commissioner of Sales
Tax. M.P. Indore v. Jaswant Singh Charan Singh  19 S.T.C. 469 and Sales
Tax Commissioner U.P. v. Ladha Singh Mal Singh,  28 S.T.C. 325 referred
Kishan Chand Chellaram v. Joint Commercial
Tax Officer Chintradripet,  21 S.T.C. 367 approved.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 2088 of 1969.
Appeal by special leave from the judgment and
order, dated April 3, 1969 of the Allahabad High Court in S. Y. R. No. 306 of
853 S. C. Manchanda and O. P. Rana for the
A. K. Sen, K. P. Gupta and Champat Rai for
The Judgment of the Court was delivered by
DUA, J.-This appeal by the Commissioner of Sales Tax, Uttar Pradesh is by
special leave and is directed against the judgment of the Allahabad High Court
answering the following question in the negative in favour of the respondent
(hereinafter called the dealer) and against the Commissioner of Sales Tax,
appellant "Whether the food color and essence are under the circumstances
items to be taxed under section 3A within the notification No. ST- 905/X dated
March 31, 1956 ?" The dealer carries on the business, inter alia, of
selling food colors and syrup essences. The dealer also carries on the business
of petroleum jelly but we are not concerned with that item in this appeal nor
are we concerned with the sales of imported scents and perfumes which,
according to the order of the Sales Tax Officer, were separately shown in the
statement filed by the dealer, ,during the assessment proceedings for the year
1960-61. For the said year the Sales Tax Officer taxed food colors and syrup
essences imported by the dealer from outside Uttar Pradesh under s. 3A of U.P.
Sales Tax Act, 15 of 1948 (hereinafter called the Act) treating them as
imported colors and perfumes. The figures of the dealer's trading account were
accepted by the Sales Tax Officer. The dealer, according to whom, food colors
and syrup essences being unclassified goods were taxable under s. 3 and not
under s. 3A of the Act, unsuccessfully appealed against the order of the Sales
Tax Officer to the Assistant Commissioner (Judicial); II Sales Tax, Kanpur.
Further revision to the Court of the Judge (Revisions) Sales Tax, Lucknow also
failed. It may, however, be pointed out that for the assessment year 1957-58
the Appellate Authority had, in disagreement with the assessing officer, held
food colors and essences of syrup to be unclassified items and had granted the
relief claimed by the dealer. Against that decision of the Appellate Authority
the Department preferred a revision to the Court of the Judge (Revision), Sales
Tax. Both these revisions, by the Department with respect to the assessment
year 1957- 58 and by the dealer with respect to the assessment year 1960-61
were heard together and disposed of by the common order dated November 19,
1965. The dealer's application for reference was, however, allowed and the learned
Judge (Revisions). Sales Tax referred for determination of the Allahabad High
Court "he question reproduced in the beginning of this Judgment. The High
Court agreed with the dealer's contention and held food colors and syrup
essences not to fall within the entries at items nos. 10 and 854 37 of the
Notification under S. 3A of the Act. The reference was accordingly answered in
the negative and against the Department. The only question which now' falls for
determination is the one referred to the High, Court and which has already been
reproduced. There is no dispute about the turnover. The dealer claims that on
imported food colors and syrup essences the rate of tax should be 2 nP.
per rupee as unclassified goods under S. 3,
whereas according to the Commissioner the tax should be 6 nP. per rupee under
s. 3A of the Act. Section 3 provides for liability to tax under the Act whereas
section 3A, which was inserted by U.P. Act 25 of 1948 and has thereafter been
amended from time to time, deals with single point taxation.
Section 3A reads :
"3-A. Single point taxation : (1)
Notwithstanding anything contained in Section 3, the State Government may, by
notification in the official Gazette, declare that the turnover in respect of
any goods or class of goods shall not be liable to tax except at such single
point in the series of sales by successive dealers as the State Government may
(2) If the State Government makes a
declaration under sub-section (1), it may further declare that the turnover in
respect of such goods shall be liable to tax at such rate not exceeding ten
naya paise per rupee as may be specified.
(3) Every notification made under this
section shall be laid before the Legislative Assembly of the State as soon as
may be after it is made and if a resolution amending or modifying it is passed
by the Assembly within the session in which it is laid, it shall, from the date
of passing of the resolution, be amended or modified accordingly but without
prejudice to the validity of anything previously done or of any liability
incurred or assessment made." On March 31, 1955 the Governor of Uttar
Pradesh issued a notification in exercise of the powers conferred by s. 3A of
the Act. That notification so far as relevant for our purpose reads :
"Notification No. ST-905/X dated 31st
In exercise of the powers conferred by
section 3A of the U.P. Sales Tax Act, 1948 as amended from time to time and in
supersession of all previous Notifications on the subject, the Governor of
Uttar Pradesh is hereby pleased to declare that the turnover in respect of the
good,, specified in the List below shall not with effect from April 1, 1956, be
liable to tax "cept-(a) 855 in the case of goods imported from outside
Uttar Pradesh at the, point of sale by the importer; and (b) in the case of
goods manufactured in Uttar Pradesh at the point of sale by the manufacturer;
and the Governor is further pleased to declare that such turnover shall with
effect from the said date be taxed at the rate of one anna per rupee.
10. Dyes and colors and compositions thereof.
37. Scents and perfumes.
The narrow point requiring decision is
whether good colors and syrup essences imported by the dealer from outside U.P.
fall within the entries 10 and 37
respectively. If they do, then the appeal of the Department has to succeed and
if they do not then the appeal must fail. As noticed earlier the High Court has
in the impugned judgment, in disagreement with the view taken by the Sales Tax
Officer, the Assistant Commissioner (Judicial) and the Judge (Revisions), Sales
Tax, held that the food colors and essences do not fall in the entries at items
10 and 37 of the Notification. This is how the High Court has dealt with the
point in controversy:-- "The notification with which we are concerned in
the instant case is notification no. ST- 905/1 dated March 31, 1956. Item nos.
10 and 37 of that notification read as follows :
'10. Dyes and colors and composition thereof.
37. Scents and perfumes.' The case of
Commissioner of Sales Tax is that food colors would fall under item no. 10
i.e., 'dyes and colors and composition thereof' and essence would fall in the
entry given in item no. 37 i.e., 'scents and perfumes'. Food colors are edible,
articles. The expression 'dyes and colors and composition thereof' does not
relate to item of food but only to coloring and dyeing material i.e., material
for color washing or color painting o r dyeing of fabrics. In our opinion, it
stands in contradistinction to bleaching material.
Similarly, the entry at item no 37 relates to
articles which cater to the smelling sense i.e., those which appeal to nose.
Essence is a flavoring material and its function is to add flavor to the food
i.e., to make it more palatable. It appeals to the tongue or to the palate. By
scents and per-fumes is meant articles of perfumery. In our opinion.
therefore, the food colors and essences would
not fall in the entries at items nos. 10 and 37 of the notification 856
aforesaid. In our opinion they could not be taxed under section 3A but under
section 3 of the Act." Shri Manchanda, learned counsel for the appellant,
assailed the reasoning and approach of the High Court. According to him the
words "dyes and colors" in entry no. 10 of the List in the
Notification in question and the words "scents and perfumes" in entry
no. 37 of the said List are unqualified and there being no limitation
discernible on their plain and general meaning, they must be held to be wide
enough to cover 'food colors' and 'syrup essences'. In seeking support for this
submission reference was made to the Random House Dictionary of the English
Language (prepared in U.S.A.) for ascertaining the meanings of the words "
color" (color, as spelt in this dictionary), "dye" and
"essence", as also to Encyclopedia Britannia Vols. 8 & 17 and
Corpus Juris Secunduin, Vols. 28 and 70 for the same purpose.
Strong reliance was placed on the decision of
this Court in Commissioner of Sales Tax U.P. v. Indian Herbs Research &
Supply Co.(1) in which the word "perfume" was held to include
"dhoop" and "dhoop batti". The word "perfume", it
may be recalled occurs in the entry no. 37 of the List in the Notification in
In our opinion the Random House Dictionary
cannot serve as a safe guide in construing the words used in the List in the
Notification in question for the purpose of deciding whether or not the words
used in entries nos. 10 and 37 cover food colors and syrup essences : indeed
this Dictionary is apt to be a somewhat delusive guide in understanding the
meanings of the words and expressions with which we are concerned in the
context in which they are used. This Dictionary gives all the different shades
of meanings attributable to the words referred but that is hardly helpful in
solving the problem raised in the present controversy. The words- "dyes
and colors" used in entry no. 10 and the words "scents and
perfumes" used in entry no. 37 have to be construed in their own context
and in the sense, as ordinarily understood and attributed to these words by
people usually conversant with and dealing in such goods. Similarly the words
"food colors" and "syrup essences" which are descriptive of
the class of goods the sales of which are to be taxed under the Act have to be
construed in the sense, in which they are popularly understood by those who deal
in them and who purchase and use them. The respondent's learned counsel has in
support of this view referred us to some decided cases.
In Kishan Chand Chellaram v. Joint Commercial
Tax Officer, Chintradripet(2) a Bench of the Madras High Court held that
Terylene, Terene, Decorn, Nylon, Nylex etc., came within the expression
"artificial silk" occurring at item no. 4 in the Third Schedule to
the Madras General Sales Tax Act, 1959.
In the course of the judgment in (1) (1970)
25 S.T.C. 151.
(2) (1968) 21 S.T.C. 367.
857 that case it was observed that the import
and content of those words have not been defined in the Sales Tax Acts and the
Courts are bound to have recourse to the meaning attributable to such words by
persons who are dealing in and utilising such goods. The extreme, peculiar and
scientific meaning of the goods which might sometimes deviate from the popular
meaning, cannot prevail. The meaning which the trade, Government officials and
statutes attribute to the words "artificial silk" was considered by
the High Court to be the ordinary and popular meaning of that expression. In
Sarin Chemical Laboratory v. Commissioner of Sales Tax(1) this Court held tooth
powder to be a "toilet requisite" and liable to sales tax at a single
point under s. 3A of the Act read with entry no. 6 of the: notification, with
which we, are also concerned in the present case, it being observed that the
names of the, articles, sales and. purchases of which are liable to be taxed,
given in a statute, unless defined in the statute, must be construed not in a
technical sense but as understood in common par lance. In this decision
reference was made to an earlier decision of this Court by five Judges in
Ramvatar Budhiprasad v. Assistant Sales Tax Officer Okola (2 in which "betel
leaves" were not considered as "vegetable". In Commissioner of
Sales Tax, M.P. Indore v. Jaswant Singh Charan Singh(3) the word
"coal" was held by this Court to include "charcoal", it
being observed that, while interpreting items in statutes like the Sales Tax
Acts, resort should be had not to the scientific Or technical meaning of such
terms, but to their popular meaning or the meaning attached to them by those
dealing in them, that is to say, to their commercial sense. In the course of
the judgment, after referring to certain decisions, including the decisions
from Australian, Canadian and English Courts, it was observed :
"The result emerging from these
decisions is that while construing the word "coal" in entry 1 of Part
III of Schedule 11, the test that would be applied is what would be the meaning
which persons dealing with coal and consumers purchasing it as fuel would give
to that word.
A sales tax statute, being one levying a fax
on goods must, in the absence of a technical term or a term of science or art,
be presumed to have used an ordinary term as coal according to the meaning
ascribed to it in common parlance. Viewed from that angle both a merchant
dealing in coal and a consumer wanting to purchase it would regard coal not in
its geological sense but in the sense as ordinarily understood and would
include 'charcoal' in the term 'coal'. It is only when the question of the kind
or variety of coal would arise that a distinction would be made between coal
and charcoal; other- (1) (1970)26S.T.C.339. (2) (1961) 12 S.T.C. 286.
(3) (1967) 19 S.T.C. 469.
858 wise both of them would in ordinary
parlance as also in their commercial sense be spoken as coal." It may be
pointed out that the entry in the case cited read "coal including coke in
all its forms". In Sales Tax Commissioner/ U.P. v. Ladha Singh Mal
Singh(1) cloth manufactured by means of power-looms was held by this Court not
to fall within the words " cloth manufactured by mills" in the
Notification dated June 8, 1948, issued under s. 3A of the Act and the sale of
such cloth was held not liable to be taxed at the higher rate of 6 ps. in a
rupee. According to this decision power-loom cloth in popular language is never
associated with mill cloth. In view of these and some other decisions the
learned counsel for the appellant, it may be said in fairness, did not dispute
that the words with which we are concerned must be construed in the sense which
is imputed to them by the persons who deal in and who consume such articles.
"Food colors" and "syrup
essence" being themselves known articles of common use, the question
arises whether the words and expressions used in entries 10 and 37 of the List
are intended to take within their fold goods popularly known in common parlance
by the names of "food colors" and "syrup essences".
It cannot be gain said that "food
colors" and "syrup essences" are edible goods whereas "dyes
and colors and compositions thereof" and "scents and perfumes"
as specified in entries nos. 10 and 3 7 of the List do not seem prima facie to
connote that they are edible goods. This is the reasoning of the High Court and
it appears to us to be both logical and rational. Indeed, except for items like
'salt' in entry no. 34, the "sugar manufactured by mills' (entry no. 49)
and "Banaspati, including refined coconut oil" (entry no. 43) which
is capable of being used as medium for cooking is prima facie edible there does
not seem to be any other edible article included in the List. Item no. 25
speaks of "Oils of all kinds other than edible oils manufactured on Ghanis
by human or animal power". This scheme suggests that, apart from the
undoubted edible goods, in cases where the import of the specified goods is
wide enough to include both edible and non-edible category then the intention
has been clearly expressed whether or not to include edible goods. How in the
case of entries nos. 10 and 37 we are inclined to think in agreement with the
High Court that these entries are not intended to extend to edible colors like
food colors and to edible essences like syrup essences. It would indeed be
straining the meanings of the words and expressions in those entries as
understood in popular commercial sense to include edible colors and essence-,.
If the intention of the State Government was to include food colors in entry
no. 10 and syrup essences in entry no. 37 then in our view these goods could
easily have been (1) (1971) 28 S.T.C. 325.
859 specified by their own popularly known
description. In any event assuming that another view as to the meaning of these
entries is possible we have not been persuaded to hold that the view taken 'by
the High Court is so grossly erroneous that we should interfere on special
leave appeal under Art.
136 of the Constitution.
Shri Manchanda made a passing reference to
the Prevention of Food Adulteration Rules, 1955 framed under ss. 4 and 23 of
the Prevention of Food Adulteration Act, 37 of 1954 and pointed out that r. 23
postulates addition of coloring matter to an article of food when permitted.
This, according to the argument, suggests that the word 'color' as used in
entry no. 10 of the List of the Notification in question has been used in a
broad enough sense so as to take within its fold edible color or food color. We
are not impressed by this argument. Rule 23 of the Prevention of Food
Adulteration Rules indeed seems to go against the submission.
The appellant's learned counsel had at one
stage suggested that the goods intended to be taxed under s. 3A of the Act are
all luxury goods and therefore food colors and syrup essences which are
normally used by comparatively richer class of society should be presumed to
have been intended to be included in items nos. 10 and 37 of the List. On
closer scrutiny of the List, however, this point was rightly not developed.
For the reasons foregoing this appeal fails
and is dismissed with costs.
V.P.S. Appeal dismissed.