Civil Appeal No 2422 of 1978
Appeal by Special Leave from the Judgment and Order dated 13 2 1978 of the Kerala High Court in TRC No 6376
MM Abdul Khader VJ Francis and MA Firoz for the Appellant
The Judgment of the Court was delivered by BHAGWATI J
The questions of law which arise for determination in this appeal lie in a very narrow compass and do not present any difficulty in answering them
They are the usual type of questions that arise under the Sales Tax legislation namely whether a particular commodity sold or purchased by the assessee falls within one entry or another
The assessee always contends that it falls within an entry which attracts lesser rate of tax while the Revenue invariably seeks to bring it within the entry attracting a larger rate of tax
Two questions arise here for consideration
One question is whether certain ornaments and other articles of gold purchased by the assessee with a view to melting them and making new ornaments 940 or other articles out of the melted gold fall within Entry 56 in the First Schedule of the Kerala General Sales Tax Act 1963 hereinafter referred to as the Act which reads Bullion and Specie
If the ornaments and other articles of gold purchased by the assessee fall within this Entry the turn over of purchases of these goods would be liable to be taxed at the rate of 1 per cent while it would have to suffer tax at the rate of 3 per cent if these goods do not fall within the Entry and are taxable under section 5A read with sec
51 ii of the Act
The other question relates to taxation of the turnover of sales of GI Pipes effected by the assessee and it raises the point whether GI Pipes sold by the assessee fall within Entry 26A in the First Schedule to the Act which reads Water Supply and Sanitary Fittings
If they do not fall within this Entry the turn over of their sales would be liable to be taxed at the rate of 3 per cent under section 51 ii of the Act but if they do then the rate of tax would be 7 per cent
The Sales Tax Officer and in appeal the Appellate Assistant Commissioner decided both the questions against the assessee and taxed the turn over of purchases of ornaments and other articles of gold at the rate of 3 per cent and the turn over of sales of GI Pipes at the rate of 7 per cent
The Tribunal on further appeal by the assessee disagreed with the view taken by the tax authorities and holding that the ornaments and other articles of gold purchased by the assessee were Bullion and specie within the meaning of Entry 56 and GI Pipes sold by the assessee were not covered by the expression water supply and sanitary fittings in Entry 26A taxed the assessee at the lesser rates as claimed by him
The Revenue thereupon took the matter by way of revision to the High Court but the High Court also took the same view and affirmed the judgment of the Tribunal
This decision of the High Court is assailed in the present appeal preferred by the Revenue after obtaining special leave from this Court
We will first consider the question whether the ornaments and other articles of gold purchased by the assessee fall within the description of Bullion and specie given in Entry 56
There are two expressions in this Entry which require consideration one is bullion and the other is specie
Now there is one cardinal rule of interpretation which has always to be borne in mind while interpreting entries in Sales Tax legislation and it is that the words used in the entries must be construed not in any technical sense nor from the scientific point of view but as understood in common parlance
We must give the words used by the legislature their popular sense meaning that sense which people conversant with the subject matter with 941 which the statute is dealing would attribute to it
The word bullion must therefore be interpreted according to ordinary parlance and must be given a meaning which people conversant with this commodity would ascribe to it
Now it is obvious that bullion in its popular sense cannot include ornaments or other articles of gold
Bullion according to its plain ordinary meaning means gold or silver in the mass
It connotes gold or silver regarded as raw material and it may be either in the form of raw gold or silver or ingots or bars of gold or silver
The Shorter Oxford Dictionary gives the meaning of bullion as gold or silver in the lump also applied to coined or manufactured gold or silver considered as raw material So also in Jowitt s Dictionary of English Law and Wharton s Law Lexicon we find that the following meaning is given for the word bullion uncoined gold and silver in the mass
These metals are called so either when melted from the native ore and not perfectly refined or where they are perfectly refined but melted down into bars or ingots or into any unwrought body of any degree of fineness
It would therefore be seen that ornaments and other articles of gold cannot be regarded as bullion because even if old and antiquated they are not raw or unwrought gold or gold in the mass but they represent manufactured or finished products of gold
Nor do they come within the meaning of the expression specie
The word specie has a recognised meaning and according to Webster s New World Dictionary it means coin as distinguished from paper money
The Law Dictionaries also give the same meaning
Wharton s Law Lexicon and Jowitt s Dictionary of English Law state the meaning of specie as metallic money and in Black s Law Dictionary it is described as coin of the precious metals of a certain weight and fineness and bearing the stamp of the Government denoting its value as currency while Words and Phrases Permanent Edition Vol
39A also gives the same meaning
Therefore according to common parlance the word specie means any metallic coin which is used as currency and if that be the true meaning it is obvious that ornaments and other articles of gold cannot be described as specie
It would thus seem clear that the ornaments and other articles of gold purchased by the assessee do not fall within Entry 56 and they are accordingly liable to be taxed not at the lesser rate of 1 per cent applicable to bullion and specie but at the general rate of 3 per cent under section 5A read with Section 51 ii of the Act
That takes us to the second question in regard to taxability of the turnover of sales of GI Pipes made by the assessee
The Revenue 942 contended that GI Pipes fall within the description water supply and sanitary fittings in Entry 26A so as to be exigible to tax at the higher rate of 7 per cent while the assessee contended that they are not covered by this expression and are therefore taxable only at the lesser rate of 3 under sec
51 ii of the Act
The determination of this question turns on the true interpretation of the words water supply and sanitary fittings
So far as the expression sanitary fittings is concerned it has received judicial interpretation by this Court in State of Uttar Pradesh vs Indian Hume Pipe Ltd where it has been laid down that sanitary fittings according to the popular sense of the term mean such pipes or materials as are used in lavatories urinals or bath rooms of private houses of public buildings
The GI Pipes sold by the assessee would therefore fall within the description of sanitary fittings only if it can be shown and the burden of so doing would be on the Revenue that they were meant for use in lavatories urinals or bath rooms
It does not appear that the attention of the assessee and the tax authorities was drawn to this aspect of the question and hence no material was brought on record which would throw light on the question as to what was the use for which the GI Pipes were meant
If the GI Pipes were heavy and intended to be laid underground for carrying supply of water from one place to another they would obviously not be sanitary fittings
This is however a question which has not been considered by the Revenue authorities and the case would therefore have to be remanded to the Appellate Assistant Commissioner for the purpose of determining whether having regard to the meaning which this Court has placed on the expression sanitary fittings the GI Pipes sold by the assessee fall within that description
But the Revenue contended that even if the GI Pipes are not sanitary fittings within the meaning of that expression they would still fall within the description water supply fittings
Now it must be remembered that the category of goods in Entry 26A is not described as water supply pipes but as water supply and sanitary fittings
The use of the word fittings suggests that the expression is intended to refer to articles or things which are fitted or fixed to the floor or walls of a building and they may in a given case include even articles or materials fitted or fixed outside provided they can be considered as attached or auxiliary to the building or part of it such as for example a pipe carrying faecal matter from the commode to the sceptic tank but they cannot include pipes laid underground 943 for carrying water supply
Moreover the words water supply  fittings do not occur in isolation but they are used in juxtaposition of the words sanitary fittings
The entire expression water supply and sanitary fittings is one single expression and the words water supply fittings must receive colour from the immediately following words sanitary fittings
We are therefore of the view that the expression water supply fittings in the context in which it occurs means such pipes or materials as are meant for use for supply of water to or in lavatories urinals or bath rooms of private houses or public buildings and they do not include heavy pipes which are laid underground as mains for carrying water supply from one area or place to another
Therefore even for the purpose of determining whether GI Pipes sold by the assessee are water supply  fittings it would have to be found as to what is the purpose for which they were meant to be used and since the question has not been approached from this point of view we think it desirable that the case be sent back to the Appellate Assistant Commissioner for the purpose of determining whether in the light of this meaning placed by us on the words water supply fittings the GI Pipes sold by the assessee could be said to be water suply   fittings
 We therefore allow the appeal set aside the orders made by the High Court the Tribunal and the Appellate Assistant Commissioner and hold that so far as the ornaments and other articles of gold purchased by the assessee are concerned they were liable to be taxed at the general rate of 3 per cent under section 5A read with section 51 ii of the Act and so far as GI Pipes sold by the assessee are concerned we remand the case to the Appellate Assistant Commissioner for the purpose of deciding on the basis of the existing material as also such further material as may be adduced whether GI Pipes sold by the assessee fell within the description water supply and sanitary fittings so as to be exigible to sales tax at the higher rate of 7 per cent under Entry 26A
There will be no order as to costs of the appeal
NVK Appeal allowed


Summary:
On the questions 1 Whether the ornaments and other articles of gold purchased by the assessee fell within the description of Bullion and specie given in Entry 56 in the First Schedule of the Kerala General Sales Tax Act 1956 and 2 the taxability of the turn over of sales of GI Pipes made by the assessee
 HELD 1
One cardinal rule of interpretation while interpreting entries in Sales Tax legislation is that the words used in the entries must be construed not in any technical sense nor from the scientific point of view but as under stood in common parlance
The words used by the legislature must be given their popular sense meaning that sense which people conversant with the subject matter with which the statute is dealing would attribute to it 940 H 941A 2
Bullion in its popular sense cannot include ornaments or other articles of gold
Bullion according to its plain ordinary meaning means gold or silver in the mass
It connotes gold or silver regarded as raw material and it may be either in the form of raw gold or silver or ingots or bars of gold or silver
941 B 3
Ornaments and other articles of gold cannot be regarded as bullion because even if old and antiquated they are not raw or unwrought gold or gold in the mass but they represent manufactured or finished products of gold
Nor do they come within the meaning of the expression specie
The word specie means coin as distinguished from paper money
941 D 4
The ornaments and other articles of gold purchased by the assessee do not fall within Entry 56 and they are liable to be taxed not at the lesser rate of 1 per cent applicable to bullion and specie but at the general rate of 3 per cent under section 5A read with section 5i ii of the Act
941 G 943 E 5
In State of Uttar Pradesh vs Indian Hume Pipe Ltd 39 STC 355 it has been held by this Court that sanitary fittings  according to the popular sense of the term means such pipes or materials as are used in lavatories urinals or bath rooms of private houses or public buildings
942 C 939 6
The GI Pipes sold by the assessee would fall within the description of sanitary fittings  only if it can be shown and the burden of so doing would be on the Revenue that they were meant for use in lavatories urinals or bath rooms
The attention of the assessee and the tax authorities was not drawn to this aspect of the question and no material was brought on record which would throw light on the question as to what was the use for which the GI Pipes were meant
If the GI Pipes were heavy and intended to be laid underground for carrying supply of water from one place to another they would obviously not be sanitary fittings 
942 C E 7
The category of goods in Entry 26A is not described as water supply pipes  but as water supply and sanitary fittings 
The words water supply fittings  do not occur in isolation but they are in juxtaposition of the words sanitary fittings 
The entire expression water supply and sanitary fittings  is one single expression and the words water supply fittings  must receive colour from the immediately following words sanitary fittings 
The expression water supply fittings  in the context in which it occurs means such pipes or materials as are meant for use for supply of water to or in lavatories urinals or bath rooms of private houses of public buildings and they do not include heavy pipes which are laid underground as mains for carrying water supply from one area or place to another
942 G 943 A B 8
As far as GI Pipes sold by the assessee are concerned the case remanded to the Appellate Assistant Commissioner for the purpose of deciding on the basis of the existing material as also such further material as may be adduced whether GI Pipes sold by the assessee fall within the description water supply and sanitary fittings so as to be exigible to sales tax at the higher rate of 7 per cent under Entry 26A 943 F