THE ADDITIONAL COMMISSIONER (LEGAL), COMMERCIAL TAXES, RAJASTHAN & ANR. versus M/S. LOHIYA AGENCIES & ANR.
[2019] 1 S.C.R. 130, Supreme Court of India, 2019
Outcome: Dismissed (Dismissed)
Segment: Ratio
A
B
C
D
E
F
G
H
130
SUPREME COURT REPORTS
[2019] 1 S.C.R.
THE ADDITIONAL COMMISSIONER (LEGAL),
COMMERCIAL TAXES, RAJASTHAN & ANR.
v.
M/S. LOHIYA AGENCIES & ANR.
(Civil Appeal Nos. 180-186 of 2019)
JANUARY 08, 2019
[RANJAN GOGOI, SANJAY KISHAN KAUL AND
K. M. JOSEPH, JJ.]
Rajasthan Value Added Tax, 2003:
Schedule IV Entry 56 – ‘Gypsum Board’ – Whether would fall
within Entry 56 of Schedule IV and be taxed at 4% for the relevant
assessment years i.e. 2006-07 and 2007-08 or would fall under the
residuary Entry 1 of Schedule V – Held: Original Entry 56 was
expanded by legislature from ‘Gypsum’ to ‘Gypsum in all its forms’
– Addition of expression ‘in all its forms’ to the expression ‘Gypsum’ ,
should be construed to include different forms of gypsum and not
just gypsum in its original form – Therefore, amended Entry 56 of
Schedule IV would include ‘Gypsum Board’ under the term ‘all its
forms’ – Interpretation of Statutes – Notification No.F.12(63)FD/
Tax/2005-19, dated 19.4.2006 – Notification No. S.O.36.
No.F.12(59)FD/Tax/2014-14 dated 14.7.2014.
Dismissing the appeals, the Court
HELD: 1. The amended Entry 56 of Schedule IV of
Rajasthan Value Added Tax Act, 2003 (RVAT), read as ‘gypsum
in all its forms’, would include ‘gypsum board’ under the term
‘all its forms’. A meaning has to be given to the Entry made by
the legislature, expanding the original Entry from ‘gypsum’ to
‘gypsum in all its forms’.  If the object was to include only
‘gypsum’, then why would the Entry be changed
to‘gypsum in all
its forms’? The corollary would also be as to what is meant by ‘in
all its forms’, as it is not, as if mere geometrical alteration of a
shape would form part of the Entry.  In such a situation, the original
Entry itself was comprehensive enough to have included it. [Paras
13 and 14][142-B-D]
[2019] 1 S.C.R. 130
130
A
B
C
D
E
F
G
H
131
2. In the present case, there is really no chemical change
which occurs in the substance as dehydration only reduces the
water content and thereafter, it is mixed with additives for the
purpose of increasing bonding and other related purposes.
Substantively, the character of ‘gypsum’ is not changed in the
mechanical exercise of converting it into a board along with, of
course, certain chemical processes of heating and mixing, to
achieve an ultimate objective. [Para 14][142-E-F]
3. ‘Words must be construed with some imagination of the
purposes which lie behind them’. Therefore, the expression ‘in all
forms’ being added to ‘gypsum’ should be construed to naturally
include not only just gypsum in its original form but in different
forms as well. [Para 16][142-H; 143-A]
4. The manufacturing process of gypsum board would show
that the initial steps are of only crushing and grinding the gypsum
whereafter it is heated and partially dehydrated, which in turn is
called ‘stucco’ or ‘Plaster of Paris’.  There does not appear to be
any doubt that such ‘stucco’ would form part of the Entry ‘in all
its forms’.  The unique characteristic of stucco, when mixed with
water, is that the smooth plastic mass so formed can be molded
into the desired shape, which obtains its rock-like state on
hardening.  This very characteristic is stated to be used in the
development and production of gypsum board.  In the second
step of the manufacturing process, stucco is mixed with a
number
of additives in an excess amount of water to prepare a slurry, to
be ultimately converted back into a dehydrated form, before being
cut into desired sizes.  Not only that, ‘gypsum board’ is defined
as real gypsum between two paper sheets. That take away from
the description of gypsum.  Even if the sheets are added, the
wide description ‘in all its forms’ would certainly include ‘gypsum
board’. [Para 17][143-B-D]
5. In fact, gypsum board, devoid of its top and bottom
boards, can be utilized, with some processing, in a similar manner
as gypsum.  When the meaning of the word ‘form’ is meant to
include ‘visible shape or configuration of something’, there is no
reason why gypsum board would not form a part of the expanded
terminology ’in all its forms’. [Para 18]
ADDL. COMMNR. (LEGAL), COMM. TAXES, RAJASTHAN v.
LOHIYA AGENCIES
A
B
C
D
E
F
G
H
132
SUPREME COURT REPORTS
[2019] 1 S.C.R.
6. In terms of notification No.S.O.36.No.F.12(59)FD/Tax/
2014-14 dated 14th July, 2014, the RVAT was amended to include,
in Schedule V, a separate Entry under item No.19(viii) ‘gypsum
board and other false ceiling material’.  Thus, the legislature by a
conscious decision in 2014, sought to create a separate Entry for
gypsum board, which was not the case in respect of the
assessment years in question.  This belies the endeavor to include
gypsum board in the residuary Entry, before such specific
inclusion as then, there would have been no need for such an
Entry.  The obvious attempt is to exclude it from ‘gypsum in all
its forms’ in Schedule IV of the Act (RVAT) and create a separate
Entry in Schedule V, whereafter it would naturally be governed
by the tax rate applicable to the Entry in question.[Para 21][144-
D-F]
Commissioner of Sales Tax, Mumbai v. India Gypsum
Ltd. (2009) 25 VST 210 (Bom.); The States of Gujarat
v. Sakarwala Brothers (1967) 19 STC 24 (SC);Trutuf
Safety Glass Industries v. Commissioner of Sales Tax,
U.P. (2007) 7 SCC 242 : [2007] 8 SCR 860;
Tungabhadra Industries Ltd v. Commercial Tax Officer,
Kurnool [1961] 2 SCR 14; State of Jharkhand and Ors
v. LA Opala R.G. Ltd. (2014) 15 SCC 136; Rajasthan
Roller Flour Mills Assn v. State of Rajasthan (1994)
Supp. 1 SCC 413 : [1993]  2 Suppl. SCR  72; Alladi
Venkateswarlu & Ors. v. Govt. of Andhra Pradesh &
Ors. (1978) 2 SCC 552 : [1978] 2 SCR 190 – relied
on.
Case Law Reference
(2009) 25 VST 210 (Bom.)
relied on
Para 4
(1967) 19 STC 24 (SC)
relied on
Para 4
[2007] 8 SCR 860
relied on
Para 4
[1961] 2 SCR 14
relied on
Para  12 (3)
(2014) 15 SCC 136
relied on
Para  12 (4)
[1993] 2 Suppl. SCR 72
relied on
Para 12 (5)
[1978] 2 SCR 190
relied on
Para 12 (6)
A
B
C
D
E
F
G
H
133
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
180-186 of 2019.
From the Judgment and Order dated  03.02.2017 of the High
Court of Judicature for  Rajasthan at Jaipur Bench, Jaipur in S.B. Sales
Tax Revision/Reference Nos.9-15 of 2013.
Harsha Vinoy, Milind Kumar, Advs. for the appellants.
M. P. Devanath, Abhishek Anand, Vivek Sharma, Udit Jain, Advs.
for the respondents.
The Judgment of the Court was delivered by
SANJAY KISHAN KAUL, J. 1. Leave granted.
2. ‘Gypsum’ (calcium sulphate dihydrate – CaSO4.2H2O) is a
natural mineral which is used in avariety of activities and productslike
pesticides, as a soil additive, as a water additive, as a food additive,
forplant treatment, but, more importantly, in the present context, for
construction purposes.  Under the Rajasthan Value Added Tax Act, 2003
(hereinafter referred to as ‘RVAT’), Entry 56 of Schedule IV specified
‘Gypsum’ as a taxable entity, at 4%.  This Entry was, however, amended
and substituted vide Notification No. F.12(63)FD/Tax/2005-19, dated
19.4.2006, notified, inter alia, to expand the meaning of Entry 56 of
Schedule IV of the RVAT by changing itto ‘Gypsum in all its forms’.
The short question which arises for consideration in the present appeal
is whether ‘gypsum board’ would fallwithin this Entry 56, and be taxed
at 4%, for the relevant assessment years, or whether it wouldfall in the
then residuary Entry 1 of Schedule V, to be taxed at 12.5%.
3. The brief facts which have given rise to the
present dispute are
as follows.  M/s. Indian Gypsum Ltd. (hereinafter referred to as ‘IGL’),
a manufacturer of what is commonly known as drywall or ‘gypsum
board’, moved an application under Section 36 of RVAT before the
Additional Commissioner, Commercial Tax Department, Rajasthan, Jaipur
for ascertaining whether gypsum board would fall within the category of
the amended Entry 56 of Schedule IV of the RVAT, with 4% rate of tax
applicable, or under the residuary Entry referred to aforesaid.  The
Additional Commissioner, vide order dated 27.9.2007, opined that ‘gypsum
board’, being commercially a different product would not fall under Entry
56 of Schedule IV of the RVAT but would fall under the residuary Entry,
making it subject to the 12.5% slab of taxation.  The gravamen of
ADDL. COMMNR. (LEGAL), COMM. TAXES, RAJASTHAN v.
LOHIYA AGENCIES
A
B
C
D
E
F
G
H
134
SUPREME COURT REPORTS
[2019] 1 S.C.R.
reasoning of the Additional Commissioner, as found from the order, is
that ‘gypsum board’ is a separate commercial product using a different
name and thus the factum of 95% of the ‘gypsum board’ being constituted
of gypsum is not relevant, as supported by the fact that a long
manufacturing process is involved in preparing ‘gypsum board’, wherein
in addition to the calcination process, additives, paper, foam, water etc.,
are used, resulting in the formation of a product having uses, quite
dissimilar to gypsum.
4. M/s. Lohiya Agencies/respondent No.1, is stated to be a
merchant dealing in ‘gypsum board’ procured from IGL and, thus, came
to be assessed by the Commercial Tax Officer for the assessment year
2006-07 and 2007-08 on 25.8.2007, post-inspection of his premises.  Since
the sale of gypsum board has been made with the VAT rate at 4%
despite the said goods not falling under Entry 56 of Schedule IV of the
RVAT, it was alleged by the Tax Department that there was tax evasion
which led to initiation of proceedings under Sections 25, 55 & 61 of
RVAT and the respondent firm was made liable to pay the differential
tax of 8.5% for the assessment years, along with penalty and interest.
The endeavours of the respondent No.1, assessee, before the Deputy
Commissioner (Appeals) failed in terms of order dated 2.1.2009 and
also before the Rajasthan Tax Board vide order dated 21.11.2012.  This
culminated in a revision petition
being filed before the Rajasthan High
Court which, however, reversed the views expressed by the forums
below, in terms of the impugned order dated 3.2.2017.  In arriving at
such a conclusion, the High Court relied upon judgments of the Bombay
High Court in Commissioner of Sales Tax, Mumbai v. India Gypsum
Ltd.1 and the Supreme Court in The States of Gujarat v. Sakarwala
Brothers2 as well as in Trutuf Safety Glass Industries v. Commissioner
of Sales Tax, U.P.3
5. We have had the benefit of arguments and reference to judicial
pronouncements, by both the parties before us with Mr. Harsha Vinoy,
learned counsel canvassing the case of the appellant, while on behalf of
the respondent No.1, the submissions were made by Mr. M.P. Devanath,
learned counsel.
6. In our considered view, to truly appreciate the controversy at
hand, two aspects have to be kept in mind.  Firstly, the change of the
 1 (2009) 25 VST 210 (Bom.).
 2 (1967) 19 STC 24 (SC).
 3 (2007) 7 SCC 242.
A
B
C
D
E
F
G
H
135
Entry by a conscious decision of the legislature, whereby the Entry of
mere ‘gypsum’ was changed to ‘gypsum in all its forms’.  This certainly
signified that something more than basic gypsum was sought to be included
in the Entry by referring to ‘gypsum in all its forms’. The sequitur would
be whether ‘gypsum board’ would fall in the expanded definition of
‘gypsum in all its forms’ or whether it is completely a different product.
7. Secondly (it is really in order to appreciate the first), what is the
original composition of gypsum, and how does the processing convert it
into gypsum board, would have to be examined.
8. Gypsum wallboard is a cellulosic composite material, also known
as drywall, used as an interior wall in many building applications and also
in limited external applications.  This composite material consists of a
flat board comprising of a gypsum core with the external surfaces covered
with paperboard.  The result is a three-layer composite composed of
paper/gypsum/paper.  The primary raw material continues to be gypsum
mineral [Calcium Sulphate Dihydrate (CaSO4.2H2O)] and cellulose.
9. A perusal of the material available in public domain on
manufacture of gypsum board shows a common thread insofar as
methodology is concerned.  It will be useful to extract the process from
one such material as under:-
“Gypsum board is manufactured in a two step process.  In the
first step, finely crushed and ground gypsum [calcium sulphate
dihydrate
(CaSO4.2H2O)] is heated and partially dehydrated
(Calcined) to Calcium Sulphate Hemihydrate (CaSO4.½H2O),
called stucco in the industry, also popularly known as ‘Plaster of
Paris’.  A unique characteristic of stucco is that when it is mixed
with the proper amount of water, it forms a smooth plastic mass
which can be molded into any desired shape.  When the hardening
has been completed, the mass has been chemically restored to its
rock-like state.  This characteristic has also been used in the
development and production of gypsum board.  In the second
step of manufacturing process stucco is mixed with number of
additives, foam and an excess amount of water to prepare gypsum
slurry which is extruded on a fast moving, continuous board
production line between two layers of special gypsum papers.
‘Raw’ gypsum board is then allowed to fully hydrate – calcium
sulphate hemi hydrate is converted back to dihydrate – before it
ADDL. COMMNR. (LEGAL), COMM. TAXES, RAJASTHAN v.
LOHIYA AGENCIES [SANJAY KISHAN KAUL, J.]
A
B
C
D
E
F
G
H
136
SUPREME COURT REPORTS
[2019] 1 S.C.R.
is cut to desired size and before it enters a ‘gypsum kiln’, where
at elevated temperature the excess water is driven off.”4
10. In commercial terms, ‘gypsum board’ is defined as gypsum
between two paper sheets.  Gypsum derived from recycled gypsum
board can be used in many ways in which gypsum is originally used too,
such as –
(a) The manufacture of new drywall
(b) Use as an ingredient in the production of cement
(c) Application to soils and crops to improve soil drainage and
plant growth
(d) A major ingredient in the production of fertilizer products
(e) An additive to composting operations5
11. If we look into other forms of gypsum, where gypsum is innately
present in the end product, two examples stare at us: (i) Plaster of Paris
and (ii) gypsum blocks.  Plaster of Paris (stucco) is merely calcinated
calcium sulphate, a dehydrated form of gypsum.  Gypsum Blocks, on
the other hand, are composed of gypsum plaster, water and in some
cases additives like vegetable or wood fibre, for greater strength.  The
gypsum boards are used as thinner plasterboards for paneling stud walls.
The aforesaid material itself gives rise to the conclusion that there are
no major chemical changes in gypsum which are carried out other than
dehydration and mixing of additives, so that the paper sheets can be
used on both sides, to be made capable of being used as a board.
12. Keeping in mind the aforesaid factual findings, let us turn to
the
judicial views dealing with the subject in question, whether relating
to gypsum board or in respect of other products, where there is derivation
of some other end product.
(1) Commissioner of Sales Tax, Mumbai v. India Gypsum Ltd.
(supra)
The Division Bench of the Bombay High Court was concerned
with a similar legal conundrum as to whether ‘gypsum board’ would fall
 4 See para 2.2 of the article ‘Life Cycle Analysis of Gypsum Board and Associated
Finishing Products’ by George J Venta, The Athena Sustainable Materials Institute,
Ottawa, Canada (March 1997).
 5 See Construction & Demolition Recycling Association: Gypsum Drywall, available
at http://cdrecycling.org/materials/gypsum-wall/.
A
B
C
D
E
F
G
H
137
under the Entry C-41 of the Maharashtra Value Added Tax Act which
reads as ‘gypsum of all forms and descriptions’.  The court opined that
the legislature having used the phraseology, some meaning would have
to be assigned to the words by which there would bean explanation of
the terminology.  The Division Bench, relying on the case of State of
Gujarat v. Sakarwala Brothers (supra) observed that the expression
‘form’ was used for items with various shapes, sizes as well as uses vis-
à-vis the original product.  It was the chemical composition of the
substance in question that mattered for deciding whether it fell within
the scope of a particular Entry.  Since the main composition of gypsum
board continues to be gypsum, which takes the form of the board, gypsum
board was held to fall in Entry C-41 of the Maharashtra Value Added
Tax Act.
(2) Trutuf Safety Glass Industries v. Commissioner of Sales
Tax (supra)
This judgment has been used as an aid in the impugned order to
support the conclusion in favour of the assessee.
’12.  ……………. The word ‘form’ connotes a visible aspect
such as shape or mode in which a thing exists or manifests itself,
species, kind or variety. The use of the word ‘in all forms’ is
different from the expression ‘all kinds’. The conceptual
difference between the words “all kinds’ and ‘in all forms’
is that the former multiplies items of the same kind while
the latter multiplies the same commodity in different forms.
The use of the word ‘in
all forms’ widens the scope of the
Entry.’
13. It is settled position in law that while interpreting the entry for
the purpose of taxation, recourse should not be made to the
scientific meaning of the terms or expressions used but to
their popular meaning, that is to say, the meaning attached
to them by those dealing in them. This is what is known as
“common parlance test’. ……………..
20. The question is not what may be supposed and has been
intended but what has been said. ‘Statutes should be construed
not as theorems of Euclid”. Judge Learned Hand said, “but words
must be construed with some imagination of the purposes which
ADDL. COMMNR. (LEGAL), COMM. TAXES, RAJASTHAN v.
LOHIYA AGENCIES [SANJAY KISHAN KAUL, J.]
A
B
C
D
E
F
G
H
138
SUPREME COURT REPORTS
[2019] 1 S.C.R.
lie behind them’. (See Lenigh Valley Coal Co. v. Yensavage6).
………………..”
   (emphasis supplied)
(3) State of Gujarat v. Sakarwala Brothers (supra)
The interpretation of Entry 47 of Schedule A to the Bombay Sales
Tax Act came into question as to whether patasa, harda and alchidana
were ‘forms’ of sugar containing more than 90% of sucrose.  Since the
chemical composition of all three was the same and they could be
converted back into sugar upon being dissolved in water, and being
subjected to ‘appropriate processes’, the court opined in favour of the
assessee.  The Bench noted with approval that in a similar lis7 pertaining
to the question of whether hydrogenated groundnut oil continued to be
groundnut oil, notwithstanding the processing carried out for the purpose
of rendering the oil more stable, it was opined that two conditions have
to be satisfied – firstly, it must be from groundnut oil and secondly, it
must be oil.  Since hydrogenated oil was from groundnut and, in its
essential nature it remained an oil and continued to be used for the same
purpose as groundnut oil, the hydrogenated oil did not alter its character
as oil despite being semisolid.
(4) State of Jharkhand and Ors v. LA Opala R.G. Ltd.8
This court examined whether glassware manufactured by the
assessee could be understood to be a ‘type of glass or glass sheet’ so as
to be taxable at the rate of 3% vide notification S.O No. 25, dated
25.06.2001, issued
by the government of Jharkhand.  It was observed as
under:
‘22. It is a settled law that in taxing statutes the terms and
expressions must be seen in their common and popular parlance
and not be attributed their scientific or technical meanings. In
common parlance, the two words “type” and “form” are not of
the same import. According to the Oxford Dictionary, whereas
the meaning of the expression “types” is “kind, class, breed, group,
family, genus”; the meaning of the word “form” is “visible
shape or configuration of something” or the “style, design,
and arrangement in an artistic work as distinct from its
 6 218 FR 547.
 7 Tungabhadra Industries Ltd v. Commercial Tax Officer, Kurnool (1961) 2 SCR 14.
 8 (2014) 15 SCC 136.
A
B
C
D
E
F
G
H
139
content”. Similarly, Macmillan Dictionary defines “type” as “a
group of people or things with similar qualities or features that
make them different from other groups” and “form” as “the
particular way in which something appears or exists or a shape of
someone or something”. Therefore, “types” are based on the broad
nature of the item intended to be classified and in terms of “forms”,
the distinguishable feature is the particular way in which the items
exist. An example could be the item “wax”. The types of wax
would include animal, vegetable, petroleum, mineral or synthetic
wax whereas the form of wax could be candles, lubricant wax,
sealing wax, etc.’
   (emphasis supplied)
(5) Rajasthan Roller Flour Mills Assn v. State of Rajasthan9
Whether flour,maida and suji would fall under the meaning of
the item ‘wheat’ under Section 14 of the Central Sales (Tax) Act was
the question.  The relevant extract is as under:
23. The following observations of Venkataramiah, J. in Raghurama
Shetty [(1) Ganesh Trading Co. v. State of Haryana, (1974) 3 SCC
620 : 1974 SCC (Tax) 100 : (1973) 32 STC 623; (2) Babu Ram
Jagdish Kumar and Co. v. State of Punjab, (1979) 3 SCC 616 :
1979 SCC (Tax) 265 : (1979) 44 STC 159 and (3) State of
Karnataka v. Raghurama Shetty, (1981) 2 SCC 564 : 1981 SCC
(Tax) 134 : (1981) 47 STC 369] can usefully be quoted: (SCC pp.
566-7, paras 8-11) “There is no merit in the submission made on
behalf of the assesses that they had not consumed paddy when
they produced rice from it by merely carrying out the process of
dehusking at their mills. Consumption in the true economic
sense does not mean only use of goods in the production of
consumers’ goods or final utilisation of consumers’ goods
by consumers involving activities like eating of food,
drinking of beverages, wearing of clothes or using of an
automobile by its owner for domestic purposes. A
manufacturer also consumes commodities which are
ordinarily called raw materials when he produces semi-
finished goods which have to undergo further processes of
production before they can be transformed into consumers’
  9 1994  Supp.(1) SCC 413.
ADDL. COMMNR. (LEGAL), COMM. TAXES, RAJASTHAN v.
LOHIYA AGENCIES [SANJAY KISHAN KAUL, J.]
A
B
C
D
E
F
G
H
140
SUPREME COURT REPORTS
[2019] 1 S.C.R.
goods. At every such intermediate stage of production,
some utility or value is added to goods which are used as
raw materials and at every such stage the raw materials
are consumed. Take the case of bread. It passes through the
first stage of production when wheat is grown by the farmer, the
second stage of production when wheat is converted into flour by
the miller and the third stage of production when flour is utilized
by the baker to manufacture bread out of it. The miller and the
baker have consumed wheat and flour respectively in the course
of their business. We have to understand the word ‘consumes’
in Section 6(i) of the Act in this economic sense. … At every
stage of production, it is obvious there is consumption of
goods even though at the end of it there may not be final
consumption of goods but only production of goods with
higher utility which may be used in further productive
processes. … Applying the above test, it has to be held that the
assessees had consumed the paddy purchased by them when they
converted it into rice which is commercially a different
commodity.”
’24. Applying the reasoning adopted hereinabove, it must be held
that when wheat is consumed for producing flour or maida
or suji, the commodities so obtained are different
commodities from wheat. The wheat loses its identity. It
gets consumed and in its place new goods/commodities
emerge. The new goods so emerging have a higher utility
than the commodity consumed. They are different goods
commercially speaking….’
   (emphasis supplied)
(6) Alladi Venkateswarlu & Ors. v. Govt. of Andhra Pradesh
& Ors.10
Whether parched rice and puffed rice would fall under Entry
66(b) of Schedule I to the Andhra Pradesh General Sales Tax Act,1957
which read ‘rice obtained from paddy that has met tax under the Act’
was the question examined.
“12. Even if parched rice and puffed rice could be looked
upon as separate in commercial character from rice as grain
 10 (1978) 2 SCC 552.
A
B
C
D
E
F
G
H
141
offered for sale in a market, yet, keeping in view the other
matters mentioned above, it could not be presumed that it
was intended to exclude from entry 66 “rice”, which at any
rate, had not so changed its identity as not to be describable
as “rice” at all. ‘Muramaralu’ was after all rice even though
it was puffed. ‘Atukulu’ even though parched was still called
rice. We must also remember that the schedule which we have
to interpret is in the English language where the term rice is still
found in the rendering or description of ‘palalu’ as well as that of
‘muramaralu’ in the English language. And, in any case, if two
interpretations of a provision are possible, we think that
we ought to, in such a case, apply the principle that the
interpretation which favours the assessee should be
preferred.”
               (emphasis supplied)
(7) Tungabhadra Industries Ltd. v. The Commercial Tax Officer,
Kurnool (supra)
In this judgment already referred to aforesaid, the following extract
may be useful for our purpose:
“08. But in the case of hydrogenated oil which is prepared from
refined oil by the process of passing hydrogen into heated oil in
the presence of a catalyst (usually finely powdered nickel), two
atoms of hydrogen are absorbed. A portion of the oleic acid which
formed a good part of the content of the groundnut oil in its raw
states in(sic.)11 converted, by the absorption of the hydrogen atoms,
into stearic acid and it is this which gives the
characteristic
appearance as well as the semi-solid condition which it attains. In
the language of the Chemist, an inter-molecular or
configurational chemical change takes place which results
in the hardening of the oil. Though it continues to be the
same edible fat that it was before the hardening, and its
nutritional properties continue to be the same, it has
acquired new properties in that the tendency to rancidity is
greatly removed, is easier to keep and to transport.”
   (emphasis supplied)
 11 To be read as ‘is’.
ADDL. COMMNR. (LEGAL), COMM. TAXES, RAJASTHAN v.
LOHIYA AGENCIES [SANJAY KISHAN KAUL, J.]
A
B
C
D
E
F
G
H
142
SUPREME COURT REPORTS
[2019] 1 S.C.R.
The aforesaid observations are important as inter-molecular or
configurational chemical changes that resulted in the hardening of the oil
was held not to exclude it from the Entry.
Our view
13. On giving consideration to the matter in issue, we find that the
amended Entry 56 of Schedule IV of the RVAT, read as ‘gypsum in all
its forms’, would include ‘gypsum board’ under the term ‘all its forms’.
14. We are persuaded to come to the aforesaid conclusion on the
basis that, it can hardly be doubted that a meaning has to be given to the
Entry made by the legislature, expanding the original Entry from ‘gypsum’
to ‘gypsum in all its forms’.  If the object was to include only ‘gypsum’,
then why would the Entry be changed to‘gypsum in all its forms’? The
corollary would also be as to what is meant by ‘in all its forms’, as it is
not, as if mere geometrical alteration of a shape would form part of the
Entry.  In such a situation, the original Entry itself was comprehensive
enough to have included it.  We have noticed the view taken by the
Bombay High Court in an almost identical situation except that the Entry
there was ‘of all forms and descriptions’.  But the discussion was more
or less confined to the expression ‘of all forms’.  This court in Sakarwala
Brothers (supra) observed that it was the chemical composition of the
substance in question that mattered, to decide whether it would fall within
the scope of a particular
Entry.  In the present case, there is really no
chemical change which occurs in the substance as dehydration only
reduces the water content and thereafter, it is mixed with additives for
the purpose of increasing bonding and other related purposes.
Substantively, the character of ‘gypsum’ is not changed in the mechanical
exercise of converting it into a board along with, of course, certain
chemical processes of heating and mixing, to achieve an ultimate objective.
15. The observations of this Court in Trutuf Safety Glass
Industries (supra) are of significance, where a distinction is sought to
be made between the words ‘in all forms’ as juxtaposed to the expression
‘all kinds’. The words ‘all kinds’ are said to be restricted to multiple
items of the same kind, while the expression ‘in all forms’ is to multiply
the same commodity into different forms.  Therefore, different ‘forms’
of gypsum would get included in the expression ‘in all forms’.
16. A reference to the timeless statement of Hand, J. that ‘words
must be construed with some imagination of the purposes which lie
A
B
C
D
E
F
G
H
143
behind them’, would require us to construe the expression ‘in all forms’
being added to ‘gypsum’ to naturally include not only just gypsum in its
original form but in different forms as well.
17. To fully understand the scope of Entry 56 of Schedule IV of
the RVAT, we have looked into the manufacturing process of gypsum
board.  A reference to the extract aforesaid would show that the initial
steps are of only crushing and grinding the gypsum whereafter it is heated
and partially dehydrated, which in turn is called ‘stucco’ or ‘Plaster of
Paris’.  There does not appear to be any doubt that such ‘stucco’ would
form part of the Entry ‘in all its forms’.  The unique characteristic of
stucco, when mixed with water, is that the smooth plastic mass so formed
can be molded into the desired shape, which obtains its rock-like state
on hardening.  This very characteristic is stated to be used in the
development and production of gypsum board.  In the second step of the
manufacturing process, stucco is mixed with a number of additives in an
excess amount of water to prepare a slurry, to be ultimately converted
back into a dehydrated form, before being cut into desired sizes.  Not
only that, ‘gypsum board’ is defined as real gypsum between two paper
sheets.  Will that take away from the description of gypsum?  We think
not.  Even if the sheets are added, the wide description ‘in all its forms’
would certainly include ‘gypsum board’.
18. In the case of Sakarwala
Brothers (supra), the factum of
there being the same chemical composition of patasa, harda and
alchidana and the ability to convert them back into sugar on being
dissolved in water and on being subjected to other ‘appropriate processes’,
resulted in a finding that they would be included as ’any form of sugar’.
In fact, gypsum board, devoid of its top and bottom boards, can be utilized,
with some processing, in a similar manner as gypsum.  When the meaning
of the word ‘form’ is meant to include ‘visible shape or configuration of
something’, as observed in State of Jharkhand (supra), we cannot see
any reason why gypsum board would not form a part of the expanded
terminology ’in all its forms’.
19. In the same line, this Court in Alladi Venkateswarlu (supra),
has given an expanded definition to ‘rice obtained from paddy that has
met tax under the Act’ to include parched rice and puffed rice within the
term ‘rice’ as it had not changed its identity so as to not be describable
as ‘rice’ at all. A broad interpretation was, thus sought to be given by
applying the ‘common sense’ rule of interpretation.  Similarly, this Court
ADDL. COMMNR. (LEGAL), COMM. TAXES, RAJASTHAN v.
LOHIYA AGENCIES [SANJAY KISHAN KAUL, J.]
A
B
C
D
E
F
G
H
144
SUPREME COURT REPORTS
[2019] 1 S.C.R.
in Tungabhadra Industries Ltd (supra) observed that even if an inter-
molecular or configurational chemical change takes place which results
in hardening of the oil, its nutritional properties continue to be the same.
Moreover, even if it acquires new properties, in the sense that the tendency
to turn rancid is greatly removed and it is easier to transport,
‘hydrogenated groundnut oil’ was held not to be excluded from the original
Entry of ‘groundnut oil’.
20. All the aforesaid examples show that wherever an expression
‘in all its forms’ is used, it has resulted in an expanded meaning, which is
a logical corollary of such an expression being added to the original
Entry.  To take a view to the contrary in the given situation would amount
to giving no meaning to the added expression as there are really not too
many possibilities on what could have been included in such an
expression.
21. We may also note another fact which has come to our notice
that in terms of notification No.S.O.36.No.F.12(59)FD/Tax/2014-14 dated
14th July, 2014, the RVAT was amended to include, in Schedule V, a
separate Entry under item No.19(viii) ‘gypsum board and other false
ceiling material’.  Thus, the legislature by a conscious decision in 2014,
sought to create a separate Entry for gypsum board, which was not the
case in respect of the assessment years in question.  This, in our view,
belies the endeavor to include gypsum board in the
residuary Entry, before
such specific inclusion as then there would have been no need for such
an Entry.  The obvious attempt is to exclude it from ‘gypsum in all its
forms’ in Schedule IV of RVAT and create a separate Entry in Schedule
V, whereafter it would naturally be governed by the tax rate applicable
to the Entry in question.
22. We, thus, dismiss the appeals leaving it open to the parties to
bear their own costs.
Kalpana K. Tripathy
              Appeals dismissed.