Commissioner of Sales Tax, Madhya
Pradesh Vs. M/S Popular Trading Company, Ujjain  INSC 194 (5 April 2000)
RAJENDRA BABU, J. :
For the assessment periods 1978-79 and
1979-80 the Sales Tax Officer assessed the respondent under the Madhya Pradesh
Sthaniya Kshetra Me Mal Ke Prvesh Par Kar Adhiniyam, 1976, that is, an Act to
levy a tax on the entry of goods into a local area in Madhya Pradesh for
consumption, use or sale therein [hereinafter referred to as `the Act']. The
respondent is a dealer in coconuts. Apart from oil he was assessed to entry tax
on `watery coconuts' under the Act.
The assessee claimed in the appeal that
`copra' and `coconut' are commercially two different commodities and `watery
coconut' is not liable to payment to entry tax.
However, the appellate authority rejected
this claim. The matter was carried in second appeal to the Tribunal
unsuccessfully. Thereafter, the respondent questioned the correctness of the
orders of the Tribunal and the other authorities before the High Court. The
High Court considered the Entry at item No. 5 which reads as "Oilseeds,
that is to say - (viii) Coconut (i.e.Copra excluding tender coconuts)(Cocos
Nucifera)". The High Court took the view that `tender coconut' is not
subject to tax and falls outside the scope of entry referred to above and does
not specifically contain `watery coconut'; that the word `copra' clarifies that
`watery coconut' is not shown to be a taxable item. The High Court relied upon
a decision of this Court in Sri Siddhi Vinayaka Coconut & Co. & Ors.
vs.State of Andhra Pradesh & Ors., 1974 (4) SCC 835, to hold that `watery
coconut' and `dry coconuts' are two distinct commodities. The High Court also
stated that every seed or article which can yield oil is not an oil seed and
adopted the test as to whether `coconut' is `copra'. Inasmuch as `watery
coconut' cannot be classified as `copra', the High Court took the view that it
is not sufficient to show that `watery coconut' is liable to be taxed but the
Department was liable to show that `watery coconut' was in reality `copra' and,
therefore, liable to tax. The Tribunal was not justified in holding that
`watery coconut' was not exempt from payment of entry tax in terms of the
The learned counsel for the appellant very
strenuously contended that the High Court had overlooked the essence of the
matter, namely, what is brought to tax under Entry 5 is an `oil seed' and
`coconut' of all descriptions except those which are not covered therein. The
learned counsel submitted that `watery coconut' undergoes a natural process of
ripening to a coconut and thereafter it ceases to be a `tender coconut' and so
includes both dehusked coconut or coconut without husk and while dehusked
coconut is known as `copra', coconut with husk is known as `watery coconut'.
She, therefore, submitted that `watery
coconut' falls within the scope of Entry 5 to attract tax.
The view taken by the High Court in this case
has lost sight of the expression in the opening clause of the entry `Oilseeds,
that is to say'. The phrase `that is to say' has been the subject matter of
interpretation by this Court in State of Tamil Nadu vs. Pyarelal Malhotra, 1976
(37) STC 311. The expression `that is to say' is descriptive, enumerative and
exhaustive and circumscribes to a great extent the scope of the entry. The
entry provides for `Oil seeds, that is to say coconut', which again says, `i.e.
Copra and coconut including any other commodity.' An oil seed botanically means
a seed which is a flowering plants' unit of reproduction or germ capable of
developing into another such plant. Seed which can yield oil is an oil seed. If
a seed by reason of application of a scientific method produces oil is not
necessarily understood to be an `oil seed' in a common parlance. If a commodity
possesses all the qualities of an oil seed it cannot be excluded from the ambit
of the expression `oil seed'. Oil is generally extracted from dry coconuts, but
in some parts of India it is extracted even from copra recovered from fresh coconuts.
Copra of watery coconut before it dries up
may not yield as much oil as dried copra. The oil which it yields may also
contain some watery substance which have to be eliminated for the purpose of
recovering pure coconut oil. At the same time, it yields sufficient quantity of
oil. Thus `watery coconut' while yielding oil merely because it yields some
watery substance does not cease to be an `oil seed' and, therefore, it falls
within the entry.
In this context, it is necessary for us to
refer to the decision of this Court in Sri Siddhi Vinayaka Coconut & Co.
& Ors. vs. State of Andhra Pradesh & Ors (supra) on which strong
reliance has been placed by the High Court. In that case this Court was
concerned with the entry as contained in the Andhra Pradesh General Sales Tax
Act. The entry therein merely contained `coconuts' in the Third Schedule and
`tender coconuts' in the Fourth Schedule which are useful only for drying
purposes which was exempt from tax. An Explanation was added to the Third
Schedule to state that the expression `coconuts' would mean fresh or dried
coconuts, shelled or unshelled including copra, but excluding tender coconuts.
Again by another amendment another Explanation was added to state that the
expression `coconuts' in the Schedule would mean dried coconuts, shelled or
unshelled, including copra but excluding tender coconuts. Thus this Court was
concerned in that case with two sets of entries - one contained in the Central
Sales Tax Act, which is similar to the provisions with which we are concerned
in the present case, and the other as stated in the Third and Fourth Schedule
to the Andhra Pradesh General Sales Tax Act. In that context, this Court had to
consider whether a `watery coconut' could be taxed within the permissible
restrictions as also `dried coconut' that resulted from the drying of the same
watery coconut. It was contended that under the State statute though `watery
coconut' and `dried coconut' were treated separately there is a provision for
refund when `watery coconut' had suffered tax became `dried coconut'. In that
context that decision was rendered and we are concerned with different kind of
entry for tax.
This Court in Ganpat Lal Lakhotia vs. State
of Rajasthan & Ors., 1997 (10) SCC 455, quoted with approval what was stated
in Sri Krishna Coconut Co. vs. CTO, 1965 (16) STC 511 (AP), wherein it was
stated as follows :- "In a tender coconut, the kernel is hardly formed or
is only in the initial stages of formation. In a dried coconut the kernel has
formed and fully developed and further the water inside the coconut has dried
up leading to the drying of the kernel also. But a fully grown coconut with a
well-developed kernel which contains water cannot be called either a tender or
a dried coconut. This is the well-known variety of coconuts used for culinary
purposes and on auspicious occasions and as part of the offerings in temple.
I do not think it is correct or reasonable to
describe this class of coconuts as either dried or tender." It was noticed
therein that a `watery coconut' in due course becomes `dried coconut' or
`copra' and, therefore, it could not be stated that `watery coconuts' are
outside the scope of the entry. If for purpose of the benefit arising under
Section 14 of the Central Sales Tax Act, which was the subject matter of
consideration before this Court, it has taken the view that the `watery
coconuts' are not outside the scope of the said provision.
There is no reason to state that the `watery
coconuts' in the present cases fall outside the scope of the Act. In the light
of this analysis, we are of the view that the High Court was not justified in
holding that `watery coconut' is not taxable under the relevant entry of the
Act. In the result, we set aside the order made by the High Court and restore
that of the Tribunal. However, in the circumstances of the case, there shall be
no orders as to costs.