Case: State of Gujarat Vs. Sakarwala Brothers

contended, however, by Mr. Bindra on behalf of the appellant that they are not "forms of sugar" but they are products of sugar and do not fall within entry 47 of Schedule A. We are unable to accept this argument as correct. It is not disputed on behalf of the appellant that the chemical composition of patasa, harda and alchidana is the same as that of sugar, viz., there is more than 90 per cent. of sucrose. Mr. Bindra, however, laid stress on the argument that patasa, harda and alchidana were sweets used on festive occasions. But this circumstance has no relevance on the question of legal classification for the purpose of the Bombay Sales Tax Act. On the other hand, it appears from the judgment of the Tribunal that it is possible to convert these articles into sugar by dissolving them in water and by subjecting the solution to an appropriate process. It is stated by the Tribunal that these articles can be put to the same use to which sugar-candy can be put. It is, therefore, manifest that patasa, harda and alchidana are only different forms of refined sugar with the requisite sucrose contents. It is argued by Mr. Bindra that the phrase "any form of sugar" referred to any variety of sugar and phrase cannot be taken to mean sugar in any form. It is not possible to accept this argument as correct. If the Legislature had intended to refer to "any variety of sugar" there is no reason why it should not have used that expression in item No. 47. It is significant that item No. 14 which relates to tea states as follows :"Tea includes all varieties of the product known commercially as tea and also includes green tea." Item 16 which relates to soap provides that soap means "all varieties of the product known commercially as soap". But in item No. 47 the Legislature has used the words "any form of sugar" and not "any variety of sugar". We are accordingly of opinion that the word "sugar" in item No. 47 is intended to include within its ambit all forms of sugar, that is to say sugar of any shape or texture, colour or density and by whatever name it is called. The qualifying words are that it must contain more than 90 per cent. of sucrose. We hold that the view taken by the High Court is correct and the argument of Mr. Bindra on behalf of the appellant must be overruled. 8. In the course of his argument reference was made by Mr. Bindra to the decision of Henrietta Louise Lutz v. Daniel Magone, Collector, etc. (153 U.S. 105; 38 L.Ed 651), in which it was held that in the interpretation of revenue laws, words are to be taken in their commonly received and popular sense, or according to their commercial designation, if that differs from the ordinary understanding of the word. The question involved in that case was whether the plaintiffs were entitled to free importation of saccharine on the ground that it was an acid used for medicinal, chemical or manufacturing purpose. It was held by the Supreme Court that these words should be received in their ordinary acceptation and to speak of a substance, as an acid, which is admitted to be three hundred times as sweet as sugar, was to confuse all our natural impressions with respect to the relative qualities of acidity and sweetness. This decision has no application to the present case where the facts are manifestly different.Learned counsel also referred to the decision in the Unites States v. One Hundred and Twelve Casks of Sugar, Nathan Goodale ((1834) 8 Peters 276), where it was observed by the Supreme Court that the denomination of merchandise, subject to the payment of duties, is to be understood in a commercial sense, although it may not be scientifically correct. The question which arose in that case was whether the Collector of the District of Mississippi was entitled to seize and forfeit casks of sugar in a state of partial solution in water on the ground that the article was sugar and not syrup. The argument of the claimant was that the article fell under the class of syrup and ad valorem duty of fifteen per cent. is paid only if there is no false designation of the merchandise. The Supreme Court was not able to decide upon the evidence whether the article was liable to be charged to specific duty as sugar but affirmed the decree of the lower court that the property seized should be restored to the claimant on the payment of 15 per cent. of ad valorem duty and that the libel be dismissed. The Supreme Court treated the question as essentially a question of fact and thought fit not to interfere with the finding of the lower court that the contents of the casks were syrup and were liable to the lower rate of duty. On behalf of the respondents, however, reliance was placed on M/s. Tungabhadra Industries Ltd. v. Commercial Tax Officer, Kurnool ([1961] 2 S.C.R. 14; 11 S.T.C. 827), in which the question at issue was whether the appellant was entitled to a deduction in respect of sales of hydrogenated groundnut oil under rules 4 and 5 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. It was decided by this Court that the hydrogenated groundnut oil continued to be "groundnut oil" notwithstanding the processing which was merely for the purpose of rendering the oil more stable. To be groundnut oil two conditions had to be satisfied - it must be from groundnut and it must be "oil". The hydrogenated oil was from groundnut and in its essential nature it remained an oil. It continued to be used for the same purpose as groundnut oil which had not undergone the process. It was further stated the mere fact that hydrogenated oil was semi-solid did not alter its character as an oil.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In our view, the word "form" would connote a visible aspect in which the thing exists or manifests itself. Sugar may manifest itself in the form of "patasa" as a result of certain simple processes being carried out. It may similarly manifest itself in the form of "alchidana" or small lumps of sugar or as "harda". If sugar so manifests itself, it cannot be said that sugar has ceased to be sugar merely because it takes a particular shape or form which appeals to certain class of people on festive occasions. It has been stated by the Tribunal that all these articles could be put to the same use to whichy or "bura" sugar could be put.We have been referred to a case reported in Jethmal Ramswaroop and Others v. The State and Others ([1959] 10 S.T.C. 270.). In that case the High Court of Rajasthan had to consider a notification granting exemptions from sales tax to "sugar including refined sugar, khandsari and palmyra sugar but excluding all preparations thereof such as sweets,, confectionery, etc." In that case the Court held that "misri", "batasa" (same as "patasa"), makhana, ola and toys made from sugar were not merely sugar and were not covered by the exemption. By the very language used in the exemption notification,y is regarded as a preparation of sugar and is excluded from the exemption. The words which we have to construe in the present case are distinct and different from the words which the High Court of Rajasthan had to considerThe learnedl is right when he says that the articles known as "patasa", "harda" and "alchidana" bear a distinct and different name from sugar and are not commercially purchased or sold as sugar. The Legislature, in entry 47, does not use the word sugar simpliciter. It has in terms stated that what is covered is sugar as defined in item No. 8 of the First Schedule to the Central Excises and Salt Act, 1944. When we turn to the definition appearing in the aforesaid item No. 8 that definition is not intended merely to cover sugar as known in common parlance. As stated by us earlier, it is intended to cover all forms of sugar. It is further intended to cover only sugar in any form which contains more than 90 per cent. of sucrose. A definition which refers to the chemical contents of an article cannot be said to be a definition which is intended to cover the article as understood in common parlance. It is with a view to give a meaning different from that which the article bears in common parlance that a special definition has been given, and it is not possible for us to interpret the words used in entry 47 as only covering the term sugar as used in common parlanceOn the facts of the present case, in spite of the fact that sugar assumes the forms of "patasa", "harda" and "alchidana", they could be put to the same use as sugar. In our view the term "sugar" as used in entry 47 is wide enough to cover "patasa", "harda" and "alchidana".Our answer to the first question is in affirmative. For the purpose of this answer, the term "alchidana" is confined to "alchidana" which consists purely of lumps of sugar and do not contain any other edible article such as the seeds of cardamom or groundnut etc6. In view of our answer to question No. (1), Mr. Nanavaty who appears on behalf of the opponents, does not press question No. (2), and that question is accordingly not answeredOn the other hand, it appears from the judgment of the Tribunal that it is possible to convert these articles into sugar by dissolving them in water and by subjecting the solution to an appropriate process. It is stated by the Tribunal that these articles can be put to the same use to whichy can be put. It is, therefore, manifest that patasa, harda and alchidana are only different forms of refined sugar with the requisite sucrose contentsIt is argued by Mr. Bindra that the phrase "any form of sugar" referred to any variety of sugar and phrase cannot be taken to mean sugar in anyform.It is not possible to accept this argument as correct. If the Legislature had intended to refer to "any variety of sugar" there is no reason why it should not have used that expression in item No. 47Item 16 which relates to soap provides that soap means "all varieties of the product known commercially as soap". But in item No. 47 the Legislature has used the words "any form of sugar" and not "any variety of sugar". We are accordingly of opinion that the word "sugar" in item No. 47 is intended to include within its ambit all forms of sugar, that is to say sugar of any shape or texture, colour or density and by whatever name it is called. The qualifying words are that it must contain more than 90 per cent. of sucrose. We hold that the view taken by the High Court is correct and the argument of Mr. Bindra on behalf of the appellant must be overruledIt was decided by this Court that the hydrogenated groundnut oil continued to be "groundnut oil" notwithstanding the processing which was merely for the purpose of rendering the oil more stable. To be groundnut oil two conditions had to be satisfiedit must be from groundnut and it must be "oil". The hydrogenated oil was from groundnut and in its essential nature it remained an oil. It continued to be used for the same purpose as groundnut oil which had not undergone the process. It was further stated the mere fact that hydrogenated oil wasd did not alter its character as an oil.For the reasons already expressed we hold that the decision of the Gujarat High Court dated December 11, 1962, is correct and that this appeal must be dismissed with costs.