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TMI Blog2008 (12) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... 6966-70, 6971, 6972-73, 6974-75, 6976, 6977-80, 6981, 6982, 6983, 6984, 6985-86, 6987-88, 6989, 6990, 6991, 6992, 69 - - - Dated:- 2-12-2008 - SINHA S.B. AND CYRIAC JOSEPH JJ. Aarohi Bhalla, Manoj Dwivedi, Gunnam Venkateswara Rao, Praveen Kumar, Anil Kumar Sangal, Ms. Nalin Sengal, Deba Prasad Mohanty, Surya Kant, Yash Pal Dhingra, Rajesh Kumar, K.K. Mohan, Prakash Kumar Singh, Rajeev Sharma, Sarva Mitter (for M/s. Mitter Mitter Co.), Ajay Majithia, Dr. Kailash Chand, Shekhar Kumar, Y.P. Dhingra, K.C. Dua, Aruneshwar Gupta, P.K. Jain, P.K. Goswami, K.K. Mishra and Himanshu Shekhar, Advocates. Sunil Gupta, Dhruv Agrawal and Rakesh K. Khanna, Senior Advocates. -------------------------------------------------- The judgment of the court was delivered by S.B. SINHA J. Leave granted. Question Whether paddy husk and rice husk connote the same commodity or not is the question involved herein. An overview The respondents, who own and operate their manufacturing units, use paddy husk as fuel in their respective factories. They were assessed for payment of sales tax in terms of various notifications issued by the State of Uttar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four per cent at first purchase. However, on or about January 15, 2002, the said entry was given a new look and in stead and place of entry No. 18, new entry being entry No. 15 was inserted, pursuant whereto and in furtherance whereof the rate of interest was increased from four per cent to eight per cent. The said entry reads as under: 15. Rice polish, rice bran, rice husk and paddy husk but excluding de-oiled rice bran, de-oiled rice polish, de-oiled rice husk and de-oiled paddy husk. However, an amendment was carried out in the description of goods as also the rate of tax by a notification issued on September 30, 2000. Precedents The procedure relating to manufacture of rice from paddy vis-a-vis the exemption clauses contained in the relevant notifications came up for consideration before the High Court from time to time. We would refer to a few of the decisions rendered by the Allahabad High Court and Madhya Pradesh High Court to which our attention has been drawn by the learned counsel for the parties. One of such decisions is Commissioner of Sales Tax, U.P. v. Naveen Traders [1975] 36 STC 440 wherein, the High Court of Allahabad, while determining the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogies Bhusa and Bhusi opined that they are commodities obtained from stalk, leaves and husk of grains. A similar view was taken by another Division Bench of the said High Court in Commissioner of Sales Tax v. Jamuna Prasad [1975] 36 STC 442 (All) wherein relying on or on the basis of an earlier decision of the said court in Naveen Traders [1975] 36 STC 440, N.D. Ojha J. (as His Lordship then was) speaking for the Bench, opined: The notification dated July 16, 1956, exempts from sales tax cattle fodder, which term is defined to include green fodder, chuni, bhusi, chhilka, chokar, cotton seed, gowar and oil-cake. In Commissioner of Sales Tax, U.P., Lucknow v. Naveen Traders, Etawah [1973] UPTC 215 See [1975] 36 STC 440., a Division Bench of this court has held that rice with its outer husk is known as paddy and after the husk is removed the product is known as rice. Rice does not have any inner husk. The rice bran in respect of which exemption was claimed was nothing but powdered rice. 'Bhusa' and 'bhusi' as understood in common parlance are commodities obtained from stalk, leaves and husk of grains. 'Rice bran' cannot be treated as 'bhusi of ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seed coat, even according to the learned author of the book aforesaid thus constitutes a part of rice. The said question also came up for consideration before a three-Judge Bench of the Trade Tax Tribunal. Shri R.N. Singh and Shri Dau Dayal, Members, Trade Tax Tribunal, Moradabad held in favour of the assessee stating that paddy husk and rice husk are different commodities. But Shri Y.C. Gupta, Member of the Tribunal, held in favour of the Revenue stating that they are the same commodity. The High Court, while exercising the revisional jurisdiction at the instance of the Revenue, affirmed the majority decision of the Tribunal. These appeals are against the judgments of the High Court. Submissions Mr. Sunil Gupta, learned senior counsel appearing on behalf of the appellant, would contend whether factually or conceptually and/or legally decided or judicially determined, paddy husk and rice husk denote the same commodity and in that view of the matter, the word paddy husk must be held to have been notified by the State of Uttar Pradesh from the very beginning for the purpose of levy of sales tax. Dehusking of paddy, Mr. Gupta would contend, is a crushing process which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution of India, i.e., by authority of law. The power to impose tax must be express and no equity can be claimed in the matter of levy of tax. One has to look merely at what is clearly stated in the statute. Imposition of tax is permissible only in terms of the provisions of statute. Reasonable taxation is a part of the doctrine of good governance. In Mumbai Agricultural Produce Market Committee v. Hindustan Lever Ltd. [2008] 5 SCC 575, this court referring to this court's decision in Jindal Stainless Ltd. v. State of Haryana [2006] 7 SCC 241, stated the law, thus: A finding of fact has been arrived at by the High Court that no service was being rendered by the State. If no service is being rendered, even no fee could have been levied. It has been so held by a Constitution Bench of this court in Jindal Stainless Ltd. v. State of Haryana [2006] 7 SCC 241 {2006] 145 STC 544 (SC). in the following terms: 40. Tax is levied as a part of common burden. The basis of a tax is the ability or the capacity of the taxpayer to pay. The principle behind the levy of a tax is the principle of ability or capacity. In the case of a tax, there is no identification of a specific benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96. Yet again, while giving a purported new look to the entry in the notification dated January 15, 2000, the words rice husk and paddy husk have respectively been mentioned. Even then no attempt was made to issue any clarification. Two expressions having been used ordinarily two different meanings should be assigned thereto. If by reason of a notification, taxes are sought to be imposed upon a new commodity applying Heydon's Rule (3 Co. Rep. 7a; 76 E.R. 637), it must be held that the mischief was sought to be remedied thereby. It is, therefore, difficult to agree with Mr. Gupta that rice husk and paddy husk denote the same commodity. We may place on record that schedule was annexed to the notification prescribing rate to the U.P. Value Added Tax Ordinance, 2007 specifying the exempted goods, item No. 4 whereof is as under: Acquatic feed; poultry feed including balanced poultry feed; cattle feed including balanced cattle feed; and cattle fodder including green fodder, chuni, bhusi, chhilka, choker, javi, gower, de-oiled rice polish, de-oiled rice bran, de-oiled rice husk, de-oiled paddy husk or outer covering of paddy; acquatic, poultry and cattle feed suppleme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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