1976 (3) TMI 190 - SC - VAT and Sales Tax

Whether Sales Tax Tribunal is right in holding that jeera, dhania, panmohuri, methi, postak and pipali are oil-seeds within the meaning of section 14 of the Central Act and the tax payable under the State law in respect of the sale or purchase of these goods inside the State, cannot exceed 2 per cent of the sale or purchase price thereof? Whether the communication No. 4(8)-ST/57 dated 31st January, 1958, issued by the Government of India which is only an official communication having no statutory sanction behind it can have any legal effect to hold the goods in question as oil-seeds as understood in common parlance and whether such an official communication is binding on the State Government. whether it is a fit case for interference with the order of the High Court when it held that the Sales Tax Tribunal was right in its conclusion? Whether it is a fit case for interference with the order of the High Court when it held that the Sales Tax Tribunal was right in its conclusion? Held that - Appeal dismissed. The Tribunal in the facts and circumstances of the case held that the particular commodities came within the definition of clause (vi) of section 14 of the Central Act, it is not possible to hold that it was not right. The answer to the first question by the High Court is, therefore, rightly in the affirmative. We do not also see anything wrong in the High Court s answering the second question in the way it did.

Summary

Issues:
Interpretation of whether certain items are classified as oil-seeds under the Central Sales Tax Act and the Orissa Sales Tax Act.

Detailed Analysis:
The Supreme Court addressed five appeals involving the assessment of sales tax on items like jeera, dhania, panmohuri, methi, postak, and pipali for the period between January 1, 1959, to March 31, 1960. The main issue was whether these items qualified as oil-seeds under the Central Sales Tax Act, leading to a lower tax rate of 2% instead of 5% under the Orissa Sales Tax Act.

The Court examined the definition of oil-seeds under section 14(vi) of the Central Sales Tax Act, which includes seeds yielding non-volatile oils used in various industries. The appellants argued that the items should be interpreted based on common parlance and usage. They cited previous court decisions from Andhra Pradesh, Madhya Pradesh, and Kerala that supported this interpretation.

On the other hand, the respondent argued that the items in question, like coriander, cumin, and poppy seeds, met the criteria of oil-seeds based on scientific definitions and official notifications. They presented evidence from the Condensed Chemical Dictionary and a notification from the Ministry of Finance, Government of India, listing these items as oil-seeds.

The Court considered the expert opinions and official notifications, concluding that the items in question fell within the definition of oil-seeds under the Central Sales Tax Act. They emphasized the importance of expert knowledge and official classifications in determining the classification of goods for taxation purposes.

Ultimately, the Court upheld the decision of the Sales Tax Tribunal, affirming that the items were indeed oil-seeds and eligible for the lower tax rate of 2%. The appeals were dismissed, with no order as to costs, and the Court appreciated the assistance of the amicus curiae in the case.

In conclusion, the judgment clarified the classification of certain items as oil-seeds under the Central Sales Tax Act, highlighting the significance of expert opinions and official notifications in determining tax liability under different state tax laws.