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TMI Blog1967 (3) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... nker Dubey and Company describes itself as "chemical dealers" at Firozabad, but it claims to be "an agriculturist holding substantial agricultural farms" and "as such appointed agents of various companies for the imports and redistribution of Chilean nitrate which is used as manure". It was assessed on an estimated turnover of Rs. 40,000 for each of the two years 1954-55 and 1955-56 for payment of sales tax on sales of imported Chilean nitrate which were treated as chemicals. The contention on behalf of the assessees was that the Chilean nitrate sold by them was a "fertilizer" exempt under the provisions of Notification No. ST-119/X-1948 dated 7th June, 1948. This notification was issued under section 4 of the U.P. Sales Tax Act exempting from the provisions of section 3 of the U.P. Sales Tax Act a number of goods including fertilizers which are mentioned as item No. 11 on the List which came into effect from the Ist of April, 1948. The term "fertilizer" is used here without any qualification whatsoever, and, prima facie, it includes all kinds of fertilizers. On behalf of the department, reliance is placed upon another Notification No. ST-117/X-923-1948 Page No: 128dated 8th June, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n chemical fertilizers but only dealt with "fertilizers" which excluded chemical fertilizers. The learned Judge observed that a chemical fertilizer is prepared through some chemical process whereas Chilean nitrate of soda is basically a chemical which is used for purposes other than that of a manure or fertilizer. Hence, the learned Judge considered the case of Chilean nitrate to be outside the category of fertilizers. He thought that it was covered more properly by the broader category of "chemicals of all kinds" mentioned in Notification No. S.T.117/X-923-1948 dated 8th June, 1948, taxable at 6 pies per rupee. He held that this entry was wide enough to include chemical fertilizers. Thereafter, the assessee applied for reference of a number of questions to this Court. The questions mentioned above were selected out of these for reference to us by the learned Judge (Revisions). Mr. Swami Dayal, on behalf of the assessee, contended that Chilean nitrate was not a chemical at all but was a mineral used for purposes of fertilization. He referred to an article on Chile in the Enoyclopaedia Britannica, Volume V, where, under the heading "Mining", the following passage occurs: "There are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48, issued under section 4 of the Act, exempting twenty-one categories of goods, including fertilizers, from the provisions of section 3 of the Act. Hence, it was contended for the department, the terms of the later notification must be deemed to prevail over the provisions of the first notification. In other words, what was exempted from tax under a more specific entry was taxed next day under a more general classification of another notification. This contention on behalf of the department is, in our opinion, unacceptable. The purposes of the two notifications were different. The first notification was issued under section 4 of the Act which was intended to exempt certain commodities from the purview of sales tax, whereas the later notification under section 3-A of the Act was only intended to make certain categories of goods liable to tax at a single point at the rate given in the Schedule. The later notification does not contain any words indicating that it was meant to supersede any other notification. It does not bring into the categories of taxable commodities those items which had been already exempted from the provisions of section 3 of the Act. It would, therefore, be mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general words in a later Act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general words, without any indication of a particular intention to do so." Again, we may quote Lord Phillimore, from Eileen Louise Nicolle v. John Winter Nicolle(2): "It is no doubt a sound principle of all jurisprudence that a prior particular law is not easily to be held to be abrogated by a posterior law, expressed in general terms and by the apparent generality of its language applicable to and covering a number of cases of which, the particular law is but one. This as a matter of jurisprudence, as understood in England, has been laid down in a great number of cases, whether the prior law be an express statute as in Hawkins v. Gathercole(3); Seward v. Vera Cruz(1); or be the underlying common or customary law of the country: Heydon's case(4): River Wear Commissioners v. Adamson.(5)" We think that the principle of construction mentioned above is fully applicable to the case before us. It was, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following observation of Desai, C.J., in Bishambhar Dayal Sri Niwas v. Commissioner of Sales Tax, Uttar Pradesh(2): "If an article is sold as an article belonging to one category it must be treated as a sale of an article of that category even though it answers the description of another category. The Legislature has fixed different rates for taxation for different categories according to certain principles it has in mind. If a colour is sold it charges sales tax on it at a certain rate, whereas if a chemical is sold it charges sales tax at a higher rate. If an article, though capable of being used as a colour, is sold as a chemical, it would be more in consonance with the legislative intention to assess sales tax on it as a chemical. When a question is put 'what was sold by the assessee?', it would be truer to say that he sold a chemical than to say that he sold a colour. If an article is capable of being used as a chemical and also as a colour, the answer to the question what he sold would depend upon how it was treated by the vendor. If he stocked and sold it as a chemical, it would be a chemical sold by him and more so if it was bought by the vendee also as such............ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for use in chemical manufacture, or used for producing a chemical effect........... A reference was also made to the chemical and industrial processes by which synthetic sodium nitrate, which is indistinguishable from Chilean nitrate, can be produced. We do not think that any useful purpose will be served by considering the chemical processes of production or the various uses of Chilean nitrate. There can be no doubt that Chilean nitrate can be classified as a chemical. It can also not be doubted that Chilean nitrate, whenever it is used as a fertilizer, has certain chemical effects and properties in the process of fertilization. The question still remains whether it should be taxed as a fertilizer, which is exempt by virtue of the previous notification, or as a chemical only which is not so exempt. In our view the least that could be said is that the notifying authority by exempting all fertilizers, including the chemical fertilizers, by the first notification, has made it possible for the assessee to urge that every type of fertilizer including what may be called a chemical fertilizer such as Chilean nitrate, is exempt from the provisions of section 3 of the Act. After reading ..... X X X X Extracts X X X X X X X X Extracts X X X X
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