Case: State of Gujarat Vs. Sakarwala Brothers

The opponents are registered dealers dealing inter alia in "patasa", "harda" and "alchidana". The opponents requested the Deputy Commissioner of Sales Tax (Appeals), Gujarat State, Ahmedabad, to determine under section 52(1)(e) of the Bombay Sales Tax Act, 1959, whether any tax was payable in respect of the sales of "patasa", "sakar", "bura sugar", "harda" and "alchidana". Along with their application, they sent two copies of bills Nos. 46, 85 and 92 dated respectively 2nd May, 1960, 1st July, 1960, and 9th July, 1960. The Deputy Commissioner of Sales Tax held that the sale of "bura sugar" was exempt from tax as the item was covered by entry 47 of Schedule A to the Bombay Sales Tax Act, 1959, whilst the sales of other articles were covered by entry 22 of Schedule E to the Act and tax was payable on them. By a further order dated 3rd October, 1960, the Deputy Commissioner rectified the earlier order and held that the other articles were covered, not by entry 22 of Schedule E, but by entry 31 of Schedule C to the Act. The Commissioner of Sales Tax in revision, by his order dated 24th October, 1960, held that "sakar") was a form of sugar and was covered by the definition of sugar in entry 47 of Schedule A and was also exempt from tax. He held that articles like "patasa", "harda" and "alchidana" were products of sugar and not sugar as such in any form. The matter was carried further before the Sales Tax Tribunal. The Tribunal held that "patasa", "harda" and "alchidana" should be treated as forms of sugar and not sweets or products of sugar and were covered by entry 47 of Schedule A and were exempt from tax2. At the instance of the State of Gujarat, this reference has been made for the determination of the following questions :"(1) Whether on the facts and in the circumstances of the case the sales of patasa, harda and alchidana (small lumps of sugar) effected by the opponents under their bills Nos. 46 and 92 dated 2nd May, 1960, and 9th July, 1960, respectively are exempt from the payment of all taxes leviable under the Bombay Sales Tax Act, 1959, adapted to the State of Gujarat by virtue of entry 47 in Schedule A to the said Act ?(2) Whether the sales of patasa, harda and alchidana by the opponents can be regarded as the sales of sweets and sweetmeats within the meaning of entry 31 of Schedule C to the Bombay Sales Tax Act, 1959, or whether such sales should be covered by entry 22 of Schedule E of the Act ?"The Tribunal has clarified the fact that "alchidana" or small lumps of sugar referred to by them did not contain any edible articles such as seeds of cardamom or groundnuts but were pure lumps of sugar. In the judgment of the Tribunal it has been observed as under :"If the chemical composition of the articles is to be taken as a guide in interpreting the entry 47 there is no doubt that patasa, harda and the alchidana are merely different forms of sugar as defined by the Central Excises and Salt Act, 1944. We were informed that a small portion of hydrogen sulphide is passed through the sugar solution for bleaching purposes after which patasas are prepared by splashing the solution on a piece of wood which converts the sugar into amorphous sugar, the hardas are prepared by pouring the solution into moulds which is then allowed to cool and the alchidanas are prepared by rapidly passing the solution of appropriate thickness through a sieve so as to convert it into granulated lumps of sugar. But whatever the process these articles are only forms of refined sugar with the requisite sucrose content ............... After undergoing all the process, the articles continue to be sugar as defined by the Excises and Salt Act and the fact that they are distributed on festive occasions will not make them anything else than sugar on that account. It may be noted that it is possible to convert any of these articles into other articles by dissolving them in water and subjecting the solution to an appropriate process. They can also be put to the same use to whichy or bura sugar can be put."

Reasoning:
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.