1974 (10) TMI 87 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "footwear" in a sales tax notification for taxation purposes.

Detailed Analysis:

The case involved an assessee who dealt in sports goods, specifically sports shoes with spikes or studs for sports purposes. The assessee classified these shoes as sports goods in their tax return, while the Sales Tax Officer categorized them under the broader term "footwear" in a notification, resulting in higher tax liability at 10 percent due to lack of C form declaration.

The Judge (Revisions) allowed the revision, stating that sports shoes are distinct from ordinary shoes as they are specially designed for sports. The revising authority sought the court's opinion on whether "sports shoes" fall under the category of "footwear" as per the notification.

The court referred to various legal precedents to interpret the term "footwear" in common parlance. It cited cases where ordinary terms like "vegetable" and "coal" were construed based on popular understanding. The court emphasized that unless a specific distinction is made in the legislation, ordinary terms should be interpreted as commonly understood.

The court analyzed definitions of "footwear" from dictionaries and encyclopedias, highlighting that the footwear industry produces a wide range of shoes for various purposes, including sports. It noted that footwear encompasses all types of shoes and protective footwear, indicating that sports shoes are a variety of footwear.

Drawing parallels from a previous case related to the term "furniture," the court differentiated between items used as hospital equipment and traditional furniture. It concluded that sports shoes, despite being sold by sports goods dealers, still fall under the category of "footwear" for taxation purposes, as there is no specific category for sports goods in the notification.

In the final decision, the court answered the question in the affirmative, favoring the tax department and ruling that sports shoes are included in the broader term "footwear" for taxation, upholding the higher tax rate of 10 percent. The Commissioner was awarded costs of Rs. 100.

Overall, the judgment clarified that unless explicitly defined otherwise, terms like "footwear" should be interpreted in their common understanding, encompassing all varieties of shoes, including sports shoes designed for specific purposes like sports activities.