Case: Hindustan Aluminium Corporation Ltd Vs. State Of Uttar Pradesh &amp; Anr

The appellant, the Hindustan Aluminium Corporation Limited, carries on the business of manufacturing and dealing in aluminium metal and various aluminium productsOn December 1, 1973 the State of Uttar Pradesh notified under section 3-A (2) of the U.P. Sales Tax Act, 1948 that the turnover in respect of the following goods set forth in item No. 6 of the attached schedule would be liable to tax at all points of sale at 3 1/2%-"6. All kinds of minerals and ores and alloys except copper, tin, zinc, nickel or alloy of these metals only."On May 30, 1975 the State of Uttar Pradesh published a notification, under section 3A (2-A) of the Act, in which item No. 1 of the schedule read as follows:"1. All kinds of minerals, ores, metals and alloys except those included in any other notification issued under the Act."and a rate of 2% w as prescribed. The notification dated December 1, 1973 was amended and item No. 6 was deletedOn August 14, 1975 the U.P. Legislature enacted the U.P. Sales Tax (Amendment and Validation) Act, 1975 section 31 (7) of which amended the afore said notification of May 30, 1975 retrospectively, so that it would be deemed always to have read as follows:-"1. All kinds of minerals, ores, metals, and alloys including sheets and circles used in the manufacture of brass wares and scraps containing only any of the metals, copper, tin, zinc, or nickel except those included in any other notification issued under then July 11, 1975 the appellant wrote to the Sales Tax Officer contending that the aluminium ingots, billets, rolled products, extrusions and other aluminium products manufactured and sold by it upto May 31, 1975 fell within item No. 6 of the notification dated December 1, 1973 and thereafter their sale was covered by item No. 1 of the notification dated May 30, 1975. However, the Commissioner of Sales Tax, U.P. issued a circular on October 15, 1975 to all Sales Tax Officers advising that aluminium ingots only should be taxed as "metal", and in regard to other items such as rods, bars, rolled products, extrusion sections tax at the rate of 7% would be payable as on unclassified itemsOn December 30, 1975, the Sales Tax Officer made provisional assessments under rule 41(3), U.P. Sales Tax Rules, 1948 for the quarters ending June 30, 1975 and September 30, 1975. The Sales Tax Officer applied a rate of 3-1/2% under the Notification of December 1, 1973 to aluminium ingots only and treated the remaining products as unclassified items attracting sales tax at 7%. Similarly under the Notification of May 30, 1975 a rate of 2% was applied to the turnover of aluminium ingots while the remaining products were charged to tax at 7% as unclassified itemsThe appellant filed a writ petition in the Allahabad High Court against the provisional assessments. During the pendency of the writ petition the Sales Tax Officer made a final assessment order for the assessment year 1975-76 on August 3, 1976. The writ petition was amended in the High Court and relief was now sought against the final assessment order. On November 17, 1976 the High Court passed judgment on the writ petition holding that while aluminium ingots, wire bars and billets would fall in the category "metals and alloys", rolled products prepared by rolling ingots and extrusions manufactured from billets must be regarded as different commercial commodities from the ingots and billets and therefore outside the category of "metals and alloys". The rolled products included plates, coils, sheets, circles and strips. The extrusions were manufactured in the shape of bars, rods, structurals, tubes, angles, channels and different types of sections. In regard to properzi redraw rods, the High Court considered that a further enquiry was necessary and therefore directed the Sales Tax Officer to re-examine the matter.The present appeals are directed against the part of the High Court judgment refusing relief in regard to rolled products and extrusions.

Reasoning: Words of everyday use must be construed not in their scientific or technical sense but as understood in common parlance. That principle has been repeatedly reaffirmed in the decisions of this Court. It holds good where a contest exists between the scientific and technological connotation of the word on the one hand and its understanding in common parlance on the other. We are here concerned, however, with a very different situation. We are concerned, with the manner in which these and similar expressions have been employed by those who framed the relevant notifications, and with the inference that can be drawn from the particular arrangement of the entries in the notifications. We must derive the intent from a contextual scheme.Section 3A of the U.P. Sales Tax Act empowers the State Government to prescribe, by notification, the rate, and the point at which the tax may be imposed on the sale of a commodity. A consideration of the notifications issued from time to time will show that the expression "metal" has been generally employed to refer to the metal in its primary sense. The reference is to the metal in the form in which it is marketable as a primary commodity. Subsequent forms evolved from the primary form and constituting distinct commodities marketable as such must be regarded as new commercial commoditiesIt is clear that while clause (a) makes specific reference to certain metals, clause (b) separately sets forth the products which emerge as a result of processing the original metal. Clause (b) speaks of sheets, including circles meant for making brass-ware, and containing only any or all of the metals specified in clause (a). A sheet of copper only or tin only or nickel only or zinc only is regarded as belonging to a distinct entry in the notification from copper, tin, nickel or zinc in its unfabricated from. This schematic arrangement has been followed in notification No. ST-3500/X dated May 10, 1956, notification No. 1366/X-990- 1956, dated April 1 , 1960 and notification No. St-9377/X-906 (AB-4)-1971 dated October 6, 1971. In all those notifications the framers of the notifications followed the scheme that one clause dealt with the metal in its original saleable form and another separate clause dealt with fabricated forms in which it was saleable as a new commodity. It is admitted before us on behalf of the appellant that aluminium ingots and billets are saleable commodities as such in the market. In the circumstances the inference is irresistible that when such a notification refers to a metal, it refers to the metal in the primary or original form in which it is saleable and not to any subsequently fabricated form. It is true that in the notification dated May 30, 1975, as amended retrospectively on August 14, 1975It is urged that item No. 6 in the notification of 1973 and Item No. 1 in the notification of 1975 speak of "all kinds of minerals, ores, metals and alloys" and, it is said, the word "all" should be given its fullest amplitude so as to include even subsequently fabricated forms of themetal.It seems to us that the construction suggested is inconsistent with the scheme to which we have referred. While broadly a metal in its primary form and a metal in its subsequently fabricated form may be said to belong to the same genus, the distinction made between the two constitutes a dichotomy of direct significance to the controversy before usFinally, it is urged that two interpretations are possible of the relevant entries in the notifications of 1973 and 1975  therefore the interpretation favourable to the dealer should be adopted.We are of the definite opinion that the only interpretation possible is that aluminium rolled products and extrusions are regarded as distinct commercial items from aluminium ingots and billets in the notifications issued under the U. P. Sales Tax Act8. We are not satisfied that the appellant is right. There is no doubt that, as laid down by this Court in Porritts &Spencer (Asia) Ltd. v. State of Haryana, a word describing a commodity in a sales tax statute should be interpreted according to its popular sense, the sense being that in which people conversant with the subject matter with which the statute is dealing would attribute to it