1966 (2) TMI 62 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of whether "dhoop or dhoop-batti" falls under the category of "perfumes" for tax liability under a specific notification.

Analysis:
The case involved a question of whether "dhoop or dhoop-batti" should be classified as "perfumes" for tax purposes under a particular notification. The notification in question specified that certain goods, including "scents and perfumes," would be subject to a single point tax. The assessee, a manufacturer of dhoop and dhoop-battis, contended that these items were not perfumes but were used for religious purposes, specifically for pooja, and therefore should not be taxed as perfumes. The Sales Tax Officer initially assessed the turnover at a lower rate, but the Judge (Appeals) determined that dhoop-batti fell within the category of "perfumes" and increased the tax liability. The appellate order was upheld upon revision, leading to the reference and the stated question.

The core issue revolved around the interpretation of the term "perfumes" in the context of the notification. The court analyzed various definitions of "perfume" from dictionaries and observed that the substance itself must emit an agreeable scent naturally to be considered a perfume. It was noted that dhoop and dhoop-batti only emitted fragrance when burnt, which did not align with the typical understanding of perfumes in commercial terms. The court emphasized that the word "perfume" should be interpreted based on its common commercial meaning rather than a technical or botanical interpretation.

The court distinguished a previous case involving "agarbatti" from the current scenario, highlighting that agarbattis naturally emitted fragrance even without being burnt, unlike dhoop. The judgment concluded that dhoop and dhoop-batti, which did not emit any agreeable odor except when burnt, did not fall within the category of "perfumes" as specified in the notification. Therefore, the court ruled in favor of the assessee, holding that they were not liable to be taxed under the perfume category.

In conclusion, the court answered the question in the affirmative, supporting the assessee's position. The Commissioner of Sales Tax was directed to pay the costs of the assessee, and the reference was resolved accordingly.