Case: State of Uttar Pradesh and Others Vs. Indian Hume Pipe Company Limited

The respondent is a dealer engaged in the manufacture and supply of hume pipes. The pipes manufactured by the respondent are reinforced with cement concrete pipes and the respondent also manufactures high quality and high pressure pipes like prestressed concrete pipes for water supply, R.C.C. pressure pipes, penstock pipes used in hydro-electric projects, etc. The respondent was a supplier of pipes to various Government departments both Central and State, such as Irrigation, Public Works, Local Self-Government, Engineering, Railways and Ministry of Petroleum, etc. It appears that a dispute arose between the respondent and the sales tax department with respect to the rate of tax for sale of pipes manufactured by the respondent for the assessment yeas 1962-63, 1963-64 and 1964-65. According to the notification issued by the Government in pursuance of the U.P. Sales Tax Act, items classed as "sanitary fittings" were to be taxed at 7 per cent. instead of 2 per cent. The Sales Tax Officer treated the hume pipes supplied by the respondent as "sanitary fittings" and imposed sales tax at the rate of 7 per cent. Instead of going in appeal to the Assistant Commissioner (Judicial), the respondent filed a writ petition in the High Court assailing the order of the Sales Tax Officer on the ground that the hume pipes manufactured by the assessee could not, by any stretch of imagination, be construed to be "sanitary fittings", nor were they even used as such. The High Court, after hearing counsel for the parties and after perusing the materials on the record, accepted the plea of the respondent and held that the hume pipes could not be treated as "sanitary fittings" and the Sales Tax Officer was, therefore, not entitled to levy tax at the rate of 7 per cent. The High Court accordingly quashed the assessments made by the Sales Tax Officer and hence this appeal by the department after obtaining a certificate from the High Court.

Reasoning:
In our opinion, the facts of this appeal lie within a very narrow compassIt is well-settled that when we are dealing with the articles used for business purposed, the terms must be interpreted in a purely commercial senseIn these circumstances, therefore, we have to construe the expression "sanitary fittings" in the popular sense of the terms as it is used in our every day life. Thus construing, it would be manifest that there could be no question of use of R.C.C. or hume pipes, which are generally laid underground and are extremely heavy, for the purpose of use in lavatories, urinals or bath-rooms, etc. By "sanitary fittings" we only understand such pipes or materials as are used in lavatories, urinals or bath-rooms of private houses or public buildings. Even where a hume pipe is used for carrying the secreted material from the commode to the septic tank that may be treated as sanitary fittings. In the instant case, as there was absolutely no material before the Sales Tax Officer to show that any of the hume pipes manufactured and sold by the respondent were meant for use in lavatories, urinals or bath-rooms and, in fact, the material was used entirely the other way, the Sales Tax Officer was not at all justified in holding that they were sanitary fittings. Of course, we must make it clear that if at any time the material produced before the sales tax authorities establishes that in a given case the hume pipes were meant for use in a bath-room, lavatory, urinal, etc., then the notification of the Government would be attracted and the assessee must be liable to be taxed at the rate of 7 per centIn the instant case, the question as to what is the true connotation of the words "sanitary fittings" and whether the hume pipes manufactured and sold by the respondent were sanitary fittings within the meaning of that expression was a question of law and since the entire material on the basis of which this question could be determined was placed before the Sales Tax Officer and it pointed in one and only one direction, namely, that the hume pipes were not sanitary fittings and there was nothing to show otherwise, the High Court was justified in entertaining the writ petition. Moreover, there is no rule of law that the High Court should not entertain a writ petition where an alternative remedy is available to a party. It is always a matter of discretion with the court and if the discretion has been exercised by the High Court not unreasonably or perversely, it is the settled practice of this Court not to interfere with the exercise of discretion by the High Court. The High Court in the present case entertained the writ petition and decided the question of law arising in it and, in our opinion, rightly. In these circumstances, therefore, we would not be justified in the interest of justice in interfering in our jurisdiction under article 136 of the Constitution to quash the order of the High Court merely on this ground after having found that the order is legally correct. We are, therefore, unable to accept this contention.