1990 (3) TMI 351 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of tax entry for "rose water" under the Tamil Nadu General Sales Tax Act, 1959.

In this case, the main issue was whether "rose water" should be classified under entry 139 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, which pertains to essences and squashes. The Revenue had taxed the sales turnover of "rose water" at a single point rate, considering it as an essence, while the assessee argued that it should be taxed under a multi-point rate.

The Sales Tax Appellate Tribunal held that "rose water" contains essence and is purchased by customers for flavoring drinks and sweets, thus falling under the category of "essences" in the tax entry. The Tribunal's decision was based on the understanding that "rose water" is not merely distilled water but contains essence and is used for flavoring purposes.

The petitioner contended that neither the dictionary meaning nor common parlance supports considering "rose water" as an essence. The petitioner argued that the Tribunal's view was unsustainable.

The High Court analyzed the definition of "essence" from The World Book Dictionary and the Shorter Oxford English Dictionary, emphasizing that "essence" refers to a concentrated preparation or extract obtained by distillation. The Court concluded that "rose water" does not meet the criteria of being a concentrated preparation and, in common parlance, would not be considered an essence. The Court held that "rose water" should not be classified under item 139 of the First Schedule to the Tamil Nadu General Sales Tax Act, overturning the Tribunal's decision.

The Court clarified that the amendment introduced to item 139 in 1981 was not relevant to the case at hand. The petition was allowed, and the Court ruled in favor of the petitioner, stating that "rose water" does not fall under the tax entry for essences.