1971 (2) TMI 109 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "products of timber" for the purpose of sales tax assessment.

Analysis:
The case involved a reference under section 11(3) of the U.P. Sales Tax Act regarding the assessment of sales tax on packing boxes made of chir wood. The Sales Tax Officer assessed the tax at 3%, treating the boxes as products of timber. The opposite party contended that the boxes should be assessed at 2% applicable to unclassified items. The revising authority held that the boxes could not be considered products of timber and reduced the tax to 2%. The question referred to the court was whether chir wood packing boxes are timber products as per the relevant notifications. The notification defined timber as wood of specified trees, including chir, and their products. The court analyzed the definition of timber, emphasizing that timber refers to wood, not a growing tree. The court considered the meaning of "products" and concluded that the packing boxes made of chir wood are indeed products of timber, as they are produced from wood by artificial means.

The court addressed the argument that the term "product" should be limited to something produced by nature or a natural process. It was noted that the term has broader meanings, including something produced by any action or work. The court emphasized that the word "products" in the notification should be interpreted in its full and comprehensive meaning, not restricted to natural production. Referring to precedents, the court highlighted that the dictionary meaning of a word may not be conclusive in a taxing provision and that popular understanding should be considered. The court concluded that chir wood packing boxes qualify as products of timber based on the comprehensive interpretation of the term "products."

One of the judges initially had doubts but was convinced by a subsequent notification that clarified the inclusion of items made of timber in the definition of "products." The court unanimously answered the reference in the affirmative, affirming that chir packing boxes are products of timber. The Commissioner was awarded costs, and the counsel's fee was assessed at Rs. 100.

In conclusion, the judgment clarified the interpretation of the term "products of timber" for sales tax assessment purposes, emphasizing a comprehensive understanding of the term and including items produced from wood by artificial means. The court's decision was based on the definition of timber and products in the relevant notifications, as well as the broader meanings of the term "product" in legal interpretation.