1961 (3) TMI 55 - SC - VAT and Sales Tax

Imposition of sales tax on betel leaves by the Sales Tax Officer, Akola challenged - Held that - Appeal dismissed. Apart from the fact that the legislature by using two distinct and different items, i.e. item No. 6 vegetables and item No. 36 betel leaves , has indicated its intention, decided cases also show that the word vegetables in taxing statutes is to be understood as in common parlance, i.e. denoting class of vegetables which are grown in a kitchen garden or in a farm and are used for the table. Thus betel leaves are not exempt from taxation.

Issues:
Challenge to imposition of sales tax on betel leaves under the C. P. & Berar Sales Tax Act, 1947 based on the interpretation of the term "vegetables" in the Act's Schedule.

Analysis:
The Supreme Court heard three petitions under Article 32 challenging the Sales Tax Officer's imposition of sales tax on betel leaves. The petitioners, dealers in betel leaves, argued that the tax imposition was unauthorized as betel leaves were not taxable under the Act. They contended that the tax violated their right to carry on trade guaranteed under Article 19(1)(g) of the Constitution. The key issue was the interpretation of Section 6 of the Act, which exempted certain goods from sales tax based on the Schedule. The Schedule initially included betel leaves as a taxable item but was later amended to omit betel leaves.

The petitioners argued that despite the omission, betel leaves should be exempt as they are vegetables. They relied on the common meaning of "vegetable" as per the Shorter Oxford Dictionary, emphasizing that it should be understood in its popular sense, not botanically. The Court examined previous judgments and legislative intent, noting that the term "vegetables" in taxing statutes refers to vegetable matter grown in kitchen gardens and used for the table. The Court cited cases where betel leaves were not considered green vegetables or plants cultivated for food, supporting the view that betel leaves do not fall under the common understanding of vegetables.

The Court concluded that betel leaves are not exempt from taxation under the Act, given the legislative intent, previous judgments, and the common understanding of the term "vegetables." Consequently, the petitions challenging the sales tax imposition on betel leaves were dismissed, with costs awarded to the respondents.

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