Case: Martand Dairy &amp; Farm Vs. The Union Of India &amp; Ors

a sure method of sealing. Further, if the item were not a liquid like cream, but a solid, it could be transported even in gunny bags - merely stitched and without any seal. If this view be sound, certainly the Benaras cream dealer is out of the liability zone. We do not examine the impact on taxability had the receptacles been returned by the buyer since it does not arise on the evidence.6. Shri Desai further drew our attention to the fact that the containers had no particular design nor did they bear any special marks or have a uniform size. Thus the sealed container had no connection with the bargain or the stuff sold. The emphasis was on the cream and the container had no pertinence in the context. In this connection, he also referred to Section 8 of the Act which refers to containers and packing material. There is force in the argument, certainly. But as earlier indicated, judicial adventure in interpretation - particularly in tax matters - is severely circumscribed. Mr. Desai posed the question whether sale in loose quantities and unsealed containers (in this very case, cream had also been sold in milk cans which were not sealed and had been granted tax exemption) made any difference from similar sales, in old kerosene tins, the soldering being no sin which attached tax guilt. Not that we are oblivious to the force of this argument but we are influenced by the words whose normal meaning should ordinarily guide interpretation. All that the notification states is that products sold in sealed containers must sail out of the harbour of exemption. The simple question is this: Was the sale of cream? Yes. Was it, when sold, packaged in containers which were sealed? Yes. On these two affirmative answers the exclusion from the exemption operates. Such is the contention put forward on behalf if the taxing authority by Shri Sanghi, learned counsel.7. In this connection, he drew our attention to Commissioner of Sales Tax, U. P. (1968) 21 STC 63 (SC). Sikri J. (as he then was), speaking for the Court, considered a somewhat similar question of exemption where sales tax dealers in cooked food other than cooked food sold in sealed containers were conferred exemption, on certain conditions. The commodity there was confectionery sold in sealed containers and the High Court upheld the assessees case with these words:"In commercial world in such trades, particularly where food materials are concerned, it would be seen that the name and reputation of the manufacturer by itself is a sufficient evidence or guarantee of the quality of the contents. The most usual form or method for furnishing such evidence or guarantee of the quality and quantity of the contents is by way of putting its seal by the manufacturer in order to secure the goods in the container in such manner that to have access to the contents of the container the seal so put has to be destroyed or broken. For if it were not so done neither the retailer nor the purchaser would be sure whether the goods inside the container as to their quality and quantity are the same as represented and have not been otherwise adulterated or mixed up by extraneous elements is hardly necessary to mention that a dealer carrying on the business of selling sweetmeats and confectionery on a comparatively smaller scale would find it uneconomical commercially to put the stuff sold or to be sold in sealed containers; it is only a large scale manufacturer who manufactures and exports the confectionery who would need selling the same in a container. In our opinion, therefore it is only that class of dealers carrying on the business of sale of confectionery in sealed containers as explained above who were not intended to be exempted from the liability to pay sales tax on their turnover."On appeal, this Court, after noticing the plausibility of the opposite point of view and guessing the possible administrative and other reasons for the exclusion from exemption, held:"Be that as it may, in the context it is difficult to give to the expression sealed container a meaning different from the ordinary dictionary meaning."8."Sealed container" merely means a container which is "so closed that access to the contents is impossible without breaking the fastening. The expression seal in this context does not involve an affixture of the seal of the seller such as impressing a signet in wax etc., as evidence or guarantee of authenticity. An article may be regarded as put in sealed containers if it is closed securely in any vessel or container by any kind of fastening or covering that must be broken before access can be obtained to what is packed inside. This is the popular, perhaps the literal, meaning of the expressions used in the notification. May be the State thought that sealed containers would be used only by big manufacturers who were able to bear the burden of tax; may be administrative convenience in assessing quantities sold induced this step. It is not for the Court to launch on obscure fiscal astrology but merely to construe what has been expressed in plain words. We should have been happier if the State had furnished the reasons prompting the exclusion from the exemption. An intelligent appreciation of the reason of the rule is an aid to judicial construction but the State has not been as alert on this score as we might have wished. Why should a sale, if generally exempt from tax being a milk product, forfeit it merely because the wholesome step of sealing the container and insulating the food article from contamination, is taken during transit? But counsel for the state has expressed his inability to throw light on this aspect or on the reasons for the policy. Had the States counter-affidavit been more illuminating on these questions, it would have performed a service to this Court and to the public and rendered the task of judicial construction simpler.

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

Explanation:
0[ds]Thus in general terms, cream is exempted from payment of Central Sales Tax by virtue of this notification but it carves out an exception to the exemption. If the cream were sold in sealed containers the seller could not come within the exemption notification. We need not go into the technique of sealing adopted in this case since it is common ground now that the cream is put in containers whose lids are properly soldered.The High Court has negatived the plea of the assessee and since we are inclined to agree with its reasoning, we express our grounds only briefly,although we may, in passing, make reference to two decisions cited before us viz., Govindram Ramprasad v Assessing Authority (Sales Tax), 8 STC 407   = (AIR 1958 Madh Pra 16) and Commr, of Sales Tax, U.P. v. G. G. Industries. (1968) 21 STC 63 (SC). Govindram a decision of the Madhya Pradesh High Court is not germane to the question we are dealing with and therefore we need not discussis force in the argument, certainly. But as earlier indicated, judicial adventure in interpretation - particularly in tax matters - is severelythat we are oblivious to the force of this argument but we are influenced by the words whose normal meaning should ordinarily guide interpretation. All that the notification states is that products sold in sealed containers must sail out of the harbour ofthe sale of cream? Yes. Was it, when sold, packaged in containers which were sealed? Yes. Onthese two affirmative answers the exclusion from the exemptioncontainer" merely means a container which is "so closed that access to the contents is impossible without breaking the fastening. The expression seal in this context does not involve an affixture of the seal of the seller such as impressing a signet in wax etc., as evidence or guarantee of authenticity. An article may be regarded as put in sealed containers if it is closed securely in any vessel or container by any kind of fastening or covering that must be broken before access can be obtained to what is packed inside. This is the popular, perhaps the literal, meaning of the expressions used in the notification. May be the State thought that sealed containers would be used only by big manufacturers who were able to bear the burden of tax; may be administrative convenience in assessing quantities sold induced this step. It is not for the Court to launch on obscure fiscal astrology but merely to construe what has been expressed in plain words. We should have been happier if the State had furnished the reasons prompting the exclusion from the exemption. An intelligent appreciation of the reason of the rule is an aid to judicial construction but the State has not been as alert on this score as we might havecounsel for the state has expressed his inability to throw light on this aspect or on the reasons for the policy. Had the States counter-affidavit been more illuminating on these questions, it would have performed a service to this Court and to the public and rendered the task of judicial constructionthis view be sound, certainly the Benaras cream dealer is out of the liability zone. We do not examine the impact on taxability had the receptacles been returned by the buyer since it does not arise on the evidence.