1963 (11) TMI 71 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of the term "miller" in the context of the Andhra Pradesh General Sales Tax Act, 1957.
2. Legislative history and amendments related to the taxation of groundnuts.
3. Definitions and common parlance meanings of "mill" and "manufacture."

Issue-wise Detailed Analysis:

1. Interpretation of the term "miller":
The primary question addressed in this judgment is whether the term "miller" used in column (2) of item 3-C in Schedule IV of the Andhra Pradesh General Sales Tax Act, 1957, includes only an oil miller or also a decorticating miller. The petitioners, who are dealers in groundnut, argued that the term "miller" refers exclusively to oil millers who crush the kernel of groundnut to produce oil, and does not include decorticating millers who merely remove the husk from groundnuts.

2. Legislative history and amendments:
To appreciate the merits of the contention, the court reviewed the legislative history. Initially, under the Madras General Sales Tax Act, groundnuts were taxed at multiple points. The Andhra Pradesh General Sales Tax Act, 1957, introduced a single point levy at the first purchase within the state. The Amending Act 26 of 1959 shifted the point of taxation to the last purchaser in the state. The Second Amending Act 26 of 1961 further amended item 3-C in column (2) of Schedule IV, stating: "When purchased by a miller in the State, at the point of purchase by the miller and in all other cases at the point of purchase by the last dealer who buys it in the State." The court noted that the term "miller" was not defined in the Act and had to be understood in context, considering the legislative history and ordinary meaning.

3. Definitions and common parlance meanings of "mill" and "manufacture":
The court referred to various dictionary definitions and judicial interpretations to determine the meaning of "mill" and "miller." The dictionaries indicated that a "mill" could refer to any machine or building for manufacturing processes, not limited to oil extraction. The court cited several sources, including the Concise Oxford Dictionary, Chambers Twentieth Century Dictionary, Law Lexicon of British India, Stroud's Judicial Dictionary, and Black's Law Dictionary, all of which supported a broader interpretation of "mill."

The court also considered the definition of "manufacture" from multiple sources, including Black's Law Dictionary, Bouvier's Law Dictionary, and judicial decisions. It concluded that "manufacture" involves making products by hand or machinery, and the process does not necessarily have to produce a completely new commodity. The court rejected the petitioners' argument that decorticating groundnuts does not constitute "manufacture" and that their operations do not qualify as a "mill."

The court emphasized that both "mill" and "manufacture" should be given their modern and extended meanings. It noted that even in common parlance, decorticating mills are referred to as "mills," and the legislative history indicated that the term "miller" was intended to include both decorticating and oil millers.

Conclusion:
The court concluded that the term "miller" in item 3-C, column (2) of Schedule IV of the Act includes both decorticating millers and oil millers. The petitioners' argument that they do not fall under the definition of "miller" was rejected. The court also pointed out that a subsequent amendment (Act 16 of 1963) explicitly excluded decorticating millers from the tax, indicating that the previous legislation included them. The petitions were dismissed with costs, and the court reaffirmed that the broader interpretation of "miller" was consistent with legislative intent and common usage.