Bricks Company Vs. Assessing Authority, Rohtak & ANR  INSC 263 (22
RANGNATH MISRA RANGNATH DUTT, M.M. (J)
1988 SCR (1) 272 1987 SCC Supl. 650 JT 1987 (3) 655 1987 SCALE (2)658
General Sales Tax Act, 1973: ss. 15 & I8-State Government Notification of
1973-'Sun dried bricks'-Whether 'bricks'-Whether exigible to sales tax.
Notification dated 5th May, 1973, issued by the State Government under s. 18 of
the Haryana General Sales Tax Act authorised levy of tax under s. 15 of the Act
at the first point in respect of the named goods, of which brick was one. The
appellant, a registered dealer claimed deduction of a certain sum out of the
gross 1:) turnover in respect of assessment of sales-tax for the accounting
period 1981-82, on the ground that he had purchased sun-dried bricks on payment
of sales tax under the Act and that amount represented the sales price of such
tax paid bricks, and that a second set of tax in the hands of the dealer was
not exigible. The claim was rejected by the authorities.
appellant filed writ petition before the High Court, which rejected his claim
on the ground that raw bricks did not come within the purview of the
the appeal in part, ^
The notification dated May 5, 1973 issued by the State Government under s. 18
of the Haryana General Sales Tax Act, 1973 applied to the sun-dried bricks.
[274E] 'Brick' is a generic term in which both the sun-dried and ovenbaked
varities of brick are included. Sun-dried bricks are, however, required to
undergo a further treatment, namely, the burning process to become bricks
proper. They are thus an intermediate stage of bricks as understood in common
parlance and are goods in the ordinary sense of the term being a commercial
commodity. [276G-H; C] 273 Lilavati Bai v. The State of Bombay,  SCR 721;
Singh v. Mota Singh,  7 SCR 205; Dy. Commissioner, Sales Tax, v. Plo Food
Packed,  3 SCR 1271 and Indian Carbon Ltd. v. Superintendent of Taxes,
Gauhati, 11972] 1 SCR 316, referred to.
sun-dried brick is purchased on payment of sales- tax and purchasing dealer
burns the same and sells the same for a higher price, sales tax should be
leviable on the sale price of such bricks. The amount of sales-tax paid when
sun- dried bricks were purchased, on production of appropriate declaration can
be deducted from the total amount of tax.
would not prejudice the revenue of the State nor would it bring about any
additional liability unwarranted by law so far as the dealer is concerned.
[277C-E] In the instant case the bricks which had been purchased as sun-dried
bricks were burnt by the appellant. He had thus further treated the sun-dried
bricks and produced goods of added value. It would not be proper to extend the
benefit of total exemption for the turnover of sale of bricks from tax, but it
would be appropriate to allow set off of the tax paid at the time of the
purchase of the sun dried bricks, out of the tax exigible on the taxable
turnover of burnt bricks.
If it is found that the appellant had paid sales tax on the sun-dried bricks,
the amount of tax then paid should be given credit and the balance should be
recovered from him.
Taxing officer to hear parties and come to his conclusion afresh. [277H; 274G]
The interest of the State would be properly protected if the impugned
notification is changed and so far as brick is concerned necessary modification
is made. Until that is done, the State should adopt the modality indicated.
APPELLATE Jurisdiction: Civil Appeal No. 2375(NT) of 1987.
the Judgment and order dated 4.9.1984 of the Punjab and Haryana High Court in
Civil Writ Petition No.
of 1984. 274 Anil B. Diwan and M.R. Ramachandran for the Appellant. S.C.
Mahanta, V.K. Mehta, C.V.S. Rao and Mahabir Singh for the Respondents.
following order of the Court was delivered:
R D E R Special leave granted.
appellant is a registered dealer under the Haryana General Sales Tax Act, 1973
('Act' for short) and is also a licencee under the Haryana Control of Brick
Supply order, 1972 ('order' for short). In respect of assessment of sales- tax
for the accounting period 1981-82, it claimed deduction of a sum of Rs.1,49,600.92
out of the gross turnover on the ground that it had purchased sun-dried bricks
from one Sardool Singh, a registered dealer on payment of sales-tax under the
Act and that amount represented the sale price of such tax-paid bricks. The
claim was rejected by the authorities under the Act. In the writ petition
before the High Court the claim was rejected on the ground that raw bricks
(i.e. unburnt bricks) did not come within the purview of the notification of
5th May, 1973, issued by the State Government in exercise of power vested under
Section 18 of the Act prescribing levy of tax at the first point in respect of
the named goods of which brick was one.
questions have been placed for our consideration:
P whether as a fact the appellant has paid sales-tax on the purchase of
sun-baked bricks from the seller as claimed and the appropriate declaration has
been produced in the assessment proceedings; and (ii) whether bricks used in
the notification of 1973 covered sun-dried bricks.
far as the first question is concerned it is one of fact and both parties have
agreed that we may direct the Taxing officer to hear parties and come to his
conclusion afresh. That situation would arise if we accept the contention of
the assessee on the other score. We shall, therefore, proceed to examine the
correctness of the other contention.
The term 'Brick' has not been defined in the Act. The High Court has adopted
the definition given in the order, where it has been defined as 'piece of burnt
clay having geometrical shape fixed in a kiln'. It is not disputed that the
order has nothing to do with the Act. In the absence of a statutory definition
of the term 'Brick', the common parlance meaning of the word as found in
dictionaries has to be accepted. (See Lilawati Bai's case 1957 SCR 721 and
Gajraj Singh's case  7 SCR 205. Counsel for the appellant also relied
upon the decisions of this Court in the cases of Dy. Commissioner, Sales Tax.
v. PIO Food Packed,  3 SCR 1271 and Indian Carbon Ltd. v.
of Taxes, Gauhati,  1 SCR 3 16 in support of his submissions. According
to Collins English Dictionary 'brick' means 'a rectangular block of clay mixed
with sand and fired in a kiln or baked by the sun, used in building
construction'. New Webster's Dictionary carries the meaning of the word as: 'a
block of clay usually rectangular, hardened by the sun or by burning in a kiln
and used for building, paving etc.' According to the oxford English Dictionary
'brick' means 'a substance formed of clay, kneaded, moulded, and hardened by
baking with fire, or in warm countries and ancient times by drying in the sun'.
Britannica indicates that 'after the bricks are formed, they must be dried to
remove as much free water as possible. Drying, apart from sun-drying, is done
in drier kiln with controlled, draft and humidity'.
have on record the Schedule of Rates of the Haryana Public Works Department of
the contemporaneous time which shows that while the rate per thousand of
sun-dried bricks was Rs.15, oven-burnt bricks of that quantity of the first
class cost Rs.75 five times more. The sun-dried bricks, though a form of brick
are not indeed the same as burnt bricks. As seen above though they have many
things common with baked bricks, they are not a complete substitute thereof. A
customer in the market would not ordinarily be prepared to accept the sub-dried
bricks to meet his requirement of bricks for house construction. As was rightly
pointed out by appellant's counsel sun-dried brick is goods of an intermediate
are satisfied that the High Court went in wrong placing full reliance on the
definition of the term 'Brick' in the order and. H 276 therefore, the proper
perspective of the issue for determination has been lost sight of. For brick
making, cleaned clay and sand mixed in desired proportion are put into sized
frames and after the extra substance is removed, the raw brick is taken out of
the frame and is laid on the field to dry up and become hard. If it intended to
make hard bricks, the same are stacked into a kiln and adequately heated up by
fire. There are various methods of burning the bricks. If not burnt, the
sun-dried bricks are not hard enough to take good load. Sun-dried bricks are
thus an intermediate stage of bricks as understood in common parlance and are
goods in the ordinary sense of the term being a commercial commodity.
18 of the Act authorises the State Government by notification to direct that in
respect of named goods, tax under Section 15 of the Act may be levied at the
first stage of sale thereof and on the issue of such a notification, tax on
such goods shall be levied accordingly.
under the notification is taxed at the first point of sale. The dealer claimed
deduction on the basis of the notification by maintaining that he had purchased
the bricks from the manufacturer and at that point had paid the tax.
a second set of tax in the hands of the dealer was not exigible. The reasoning
given by the taxing authorities as also the High Court cannot be sustained. As
the counsel for the appellant pointed that 'brick' is a generic term; as per
the meaning of the term in common parlance and dictionaries sun-dried bricks
are bricks of a class and both varieties of bricks can to a considerable extent
be used for the same purpose as substitute of one another. As the term 'Brick'
covers both sun-dried and oven-baked bricks, and there is no definition in the
Act, the contention of the appellant that sun-dried bricks are a class of
'brick' to which the notification under Section 18 applies cannot be thrown out
have already pointed out that though both the varieties of brick are included
in the generic term 'brick', the use to which these are put is not the same. We
have also pointed out that there is a considerable difference in the price.
Sun-dried bricks are required to undergo a further treatment, namely, the burning
process to become bricks proper, when burnt, bricks are sold at a substantially
higher price to meet different demands in the market. The appellant after
purchasing sun-dried bricks has burnt them and sold the same 277 for higher
consideration. A Learned counsel for the State rightly contended that if
sun-dried brick is accepted as 'brick' within the meaning of the notification,
on the basis of the provision for taxing at the first point in regard to sale
of bricks, by paying tax on the low consideration of sun-dried bricks, the
dealer would escape liability of sales-tax on the turn-over of baked bricks.
Undoubtedly this would be the position. We accordingly suggested to Counsel for
the State that this situation should be appropriately met and the interest of
the State would be properly protected if the notification in questions changed
and so far as brick is concerned, necessary modification is made. Where
sun-burnt brick is purchased on payment of sales-tax and the purchasing dealer
(whose assessment is in issue) burns the same and sells the same for a higher
price, sales-tax should be leviable on the sale price of such bricks. The
amount of sales-tax paid when sun-dried bricks were purchased on production of
appropriate declaration can be deducted from the total amount of tax.
would not prejudice the revenue of the State nor would it bring about any
additional liability unwarranted by law so far as the dealer is concerned. The
impugned notification would not serve the purpose indicated and would require
amendment. It is up to the State to take the requisite steps.
what remains for consideration is: whether the appellant would succeed in the
claim for deductions. It is not disputed by appellant's counsel that the sale
price of bricks which had been purchased as sun-dried bricks and sold for the
price of Rs.1,49,600.92 were burnt by the appellant.
the finding that the appellant had further treated the sun-dried bricks and
produced goods of added value, we do not think it would be proper to extend the
benefit of total exemption for the turn-over of sale of bricks from tax. The
notification of the State Government is somewhat misleading;
would thus be appropriate to allow stoff of the tax paid at the time of the
purchase of the sun-dried bricks out of the tax exigible on the taxable
turn-over of burnt bricks. While setting aside the judgment of the High Court
we would direct that until appropriate amendment to the notification is made,
the State should adopt the modality indicated above. In the instant case if it
is found that appellant had paid sales-tax to Sardool Singh, the 278 amount of
tax then paid should be given credit and the balance should be recovered.
appeal is allowed to the extent indicated above.
shall bear their respective costs.