THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE SANJAY KUMAR TAX REVISION CASE Nos.259 of 2001; 185 of 2002; and 10 and 67 of 2003 November 09, 2011 Between: The State of Andhra Pradesh, represented by its State Representative before Sales Tax Appellate Tribunal, Nampally, Hyderabad ... Petitioner And M/s.Sri Bharathi Minerals & Chemicals, Vijayawada ...Respondent THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE SANJAY KUMAR TAX REVISION CASE Nos.259 of 2001; 185 of 2002; and 10 and 67 of 2003 COMMON ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) The four tax revision cases under Section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 (the Act) are by the Revenue against a common order dated 14.7.2000 in four connected tax appeals involving a similar question for consideration. The following brief fact of the matter which is illustrative is with reference to TRC No.185 of 2002. The respondent, M/s.Bharathi Minerals & Chemicals (hereafter, the dealer), is a registered dealer on the rolls of the Commercial Tax Officer, Nandigama. They are engaged in the business of manufacture and sale of calcined bone meal which is sold as poultry feed. For four assessment years from 1991 – 1995, the assessing authority completed the assessment on 01.10.1997. The bone meal was treated as poultry feed and the tax is levied under item 80 of Schedule-I of the Act i.e., 1% sales tax on the point of first sale, 0.5% of additional tax and surcharge of 10%. The amount of sales tax determined was paid. The Deputy Commissioner of Commercial Taxes-I Division, Vijayawada suo motu revised the assessment orders under Section 20(2) of the Act. The revisional authority having concluded that calcined bone meal is used as fertilizer and falls within the purview of item 23 of Schedule-I of the Act and upwardly revised the tax rate to 3%. The dealer then approached the Sales Tax Appellate Tribunal (STAT). The other tax revision cases relate to different assessment years. The STAT in the impugned order Sri Bharathi Minerals & Chemicals v State of Andhra Pradesh[1] allowed the appeals holding that calcined bone meal is exclusively used as mineral supplement in livestock feed while the bone meal is used as a chemical fertilizer; the process of manufacturing calcined bone meal used as a poultry feed involves more time and expenditure; and in view of the clear language in item 23 unless bone meal is used as a chemical fertilizer it cannot come under the said item. In these revisions the only point that is urged by the Special Counsel for Commercial Taxes is that STAT was in error in treating calcined bone meal as falling under item 80 of Schedule-I. We are afraid we cannot accept the contention. Items 23 and 80 of Schedule-I are read as under. Sl.No. Description of Goods Point of Levy Rate of Tax x x x x x x x x 23. Chemical fertilizers & bone meal (including mixtures or nutrient elements such as iron, zinc, copper and biological derivatives such as enzymes, co-enzymes and aucines). At the point of first sale in the State 3 paise in the rupee x x x x x x x x 80 Poultry feed and cattle feed At the point of first sale in the State 1 paise in the rupee Interpretation of an entry in a sales tax statute is a quasi judicial function. But there is no universal test to be applied when the classification is examined. The Court’s role is to consider its effect from different angles. The functional utility, design, shape and predominant usage have a bearing in determining classification of item (A.Nagaraju Bros. v State of Andhra Pradesh[2] and O.K. Play (India) Ltd v Commissioner of Customs and Excise[3]). The dictionary meaning and technical meaning mainly help interpreting an entry and it is not always safe to resort to the scientific and technical meaning of the terms or expressions used. The popular meaning attached to the classified item/product and in the sense the people understand is more preferred than the scientific nature of the classified item (Asian Paints Ltd v Collector of Customs and Excise[4]). The one principle which is taken as well settled is that the words or expressions must be construed in the sense they are understood in the trade by the dealer and the consumer (Delhi Cloth & General Mills Co. Ltd v State of Rajasthan[5]). Lastly, any entry in sales tax law must be interpreted by giving a natural meaning to the words employed and when the commodity is capable of answering two or more entries one beneficial to the dealer will have to be taken for the purpose of classification. Entry 23 leaves no doubt that the bone meal used as chemical fertilizer only attracts rate of tax of 3% whereas entry 80 which deals with poultry feed does not contain any such classification. When calcined bone meal is used as a cattle feed it cannot be treated as fertilizer. This is separately dealt with by Indian Standard specification UDC 636.087 IS : 7061-1973. The calcined bone meal is rich in calcium and phosphorus minerals and, therefore, has value as a mineral supplement in livestock feeds. It has been the case of the respondent dealer that it is manufacturing calcined bone meal used as cattle feed and Revenue had no other contra evidence to show that the dealer was selling the bone meal as fertilizer. Further as observed by the STAT the process of manufacturing calcined bone meal used as mineral supplement in the livestock involves more cost when compared with ordinary bone meal used as fertilizer. This itself would clinchingly show that the revisional authority applied inappropriate entry for the purpose of determining the applicable rate of tax. The STAT considered all aspects with reference to the material placed before it and we do not find any error therein. In the result, for the above reasons, the tax revision cases are dismissed. In the circumstances, there shall be no order as to costs. ________________ (V.V.S. RAO, J) _____________________ (SANJAY KUMAR, J) November 09, 2011 YS [1] (2001) 32 APSTJ 168 [2] 1994 Supp (2) SCC 122 : (1994) 95 STC 1 [3] (2005) 2 SCC 460 : AIR 2005 SC 1023 [4] (1988) 2 SCC 470 : AIR 1988 SC 1087 : (1988) 70 STC 38 [5] (1996) 2 SCC 449 : AIR 1996 SC 2930