1994 (12) TMI 353 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment under Section 12(8) of the Orissa Sales Tax Act, 1947 based on the interpretation of the term "oil cake" and its inclusion of "de-oiled cake" before and after a specific notification.

Analysis:
The controversy in this case revolves around the interpretation of the term "oil cake" and whether it includes "de-oiled cake" before and after the insertion of the expression "including de-oiled cake" by a notification. The dispute is whether the notification was clarificatory or if it changed the scope of the term. The entry in question pertains to tax-free goods, specifically feed and fodder for animals. The primary issue is whether de-oiled cake falls within the ambit of "oil cake" as mentioned in the entry.

The court examined the process of producing oil cake from oil-seeds and the distinction between oil cake and de-oiled cake. The judgment highlighted that de-oiled cake is used as fertilizer and for other purposes, making it distinct from oil cake. The court also considered the common parlance understanding of the term "cattle feed" and how it relates to de-oiled cake. Various references from encyclopedias and legal precedents were cited to support the interpretation of terms like oil cake, de-oiled cake, and cattle feed.

Another crucial aspect discussed was the retrospective operation of the notification and whether assessments done prior to the insertion of "including de-oiled cake" were valid. The court emphasized that the terms in sales tax enactments should be understood in their popular sense, as commonly perceived by those familiar with the subject matter. The judgment referenced legal precedents to support this principle of interpretation.

The court also considered the possibility of the notification being clarificatory in nature to avoid conflicting assessments and provide clarity on the inclusion of de-oiled cake as cattle feed. Reference was made to a judgment by the Rajasthan High Court, which held that de-oiled cake is indeed cattle feed. The court ultimately concluded that the Revenue's stance that de-oiled cake was not cattle feed before a certain date was not sustainable, and assessments based on that premise were set aside.

In a concurring opinion, another judge agreed with the conclusion reached in the main judgment, supporting the decision to allow the writ applications challenging the assessments based on the interpretation of the term "oil cake" and its inclusion of "de-oiled cake."

This detailed analysis of the judgment showcases the intricate legal reasoning and interpretation involved in resolving the issues related to the assessment under the Orissa Sales Tax Act and the inclusion of de-oiled cake within the scope of tax-free goods.