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TMI Blog1975 (10) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... fied item taxable at the general rate of tax of five per cent under section 5 of the Orissa Sales Tax Act?" In S. J. C. No. 48 of 1974, the questions referred are as follows: "(1) Whether, on the facts and in the circumstances of the case, the Member, Additional Sales Tax Tribunal, was correct in holding that nylon yarn is artificial silk yarn and as such taxable at the rate of five per cent as unclassified goods? (2) Whether, on the facts and in the circumstances of the case, nylon yarn is taxable at the rate of 7 per cent as per serial No. 7-C of the schedule of taxable goods?" In S. J. C. Nos. 149 to 151 of 1974, the following question has been referred: "Whether, in the absence of a definition of the word 'nylon' in the sales tax statute, the Tribunal was justified to hold that nylon, not being understood as plastic in popular and commercial sense, is liable to be taxed only at the rate of 5 per cent or whether it should be taxed at the rate of 7 per cent, as per serial No. 7-C of the schedule of taxable goods?" 2. Under section 5(1) of the Act, the tax payable by a dealer is prescribed to be 5 per cent on his taxable turnover. The first proviso reads thus: "Provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle for guidance was indicated in the following manner: "The result emerging from these decisions is that while construing the word 'coal' in entry 1 of Part III of Schedule II, the test that would be applied is what would be the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales tax statute, being one levying a tax on goods, must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning ascribed to it in common parlance. Viewed from that angle both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include 'charcoal' in the term 'coal'. It is only when the question of the kind or variety of coal would arise that a distinction would be made between coal and charcoal; otherwise, both of them would in ordinary parlance as also in their commercial sense be spoken as coal." In the case of Commissioner of Sales Tax v. S. N. Brothers[1973] 31 S.T.C. 302 (S.C.)., the question for consideration before the Supreme Court was whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lymers of high molecular weight, that can be moulded into any form by heat or pressure or both, as bakelite, cellulose acetate, nylon, etc." The Corpus Juris Secundum, Vol. 70, gives the following meaning of "plastic": "The term applies to a substance capable of being moulded and pressed into form. A substance is plastic which changes conformation in response to pressure above a critical degree peculiar to the given substance, but which retains conformation when pressure upon it falls below the critical degree......" The Encyclopedia Americana, 1961 Edition, Volume XXII, dealing with "Plastic" states: "The modern plastic industry deals chiefly with moldable materials manufactured from organic compounds, that is, combinations of carbon with hydrogen, oxygen, nitrogen and other elements. The inorganic molding materials, such as concretes, cements, and ceramics, and also rubber, an organic substance, are not generally included within the scope of plastic trade as it is known today, inasmuch as the industries utilizing these materials are considerably older and were already individually organised and developed prior to the advent of the newer plastics." "Organic plastics" is said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: "...Polyamide resins are made from polyamides and polybasic acids. The basic raw materials for nylon resins are castor-oil, from which sebacic acid (a ten carbon dibasic acid) is obtained, and phenol which, by hydrogenation and oxidation, yields adipic acid (a six carbon dibasic acid). Hexamethylene diamine made from adipic acid and decamethylene diamine made from sebacic acid are typical diamines used in synthesizing these resins. Nylon resin was made available on a large scale by E. I. Du Pont de Nemours and Company, Inc., during 1940. It quickly proved its suitability for hosiery to manufacturer and consumer alike and was accepted as a superior bristle material for tooth brushes, hair brushes, and brushes for miscellaneous industrial purposes. It has proved a tremendous military asset to the United States to have nylon available to replace silk in the manufacture of parachutes. Nylon moldings are being widely used for cams, bearings, fastening devices, and other industrial mechanical parts, many of which are buried within operating mechanisms." "Nylon" according to the Reader's Digest Great Encyclopaedic Dictionary is: "Any of a group of long chain, synthetic polymeric am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent continuous yarn, mono-filament continuous yarn, staple, and tow. Fine mono-filament yarn is used in knitting sheer hosiery and also in sheer woven and knit fabrics. Multi-filament yarn is used in fabrics for dresses, lingerie, blouses, bathing suits, and upholstery. Staple is found in heavier fabrics for dresses, slacks, and outer-wear. It is often blended with other fibers to add strength and wear resistance. Nylon is also used in socks, under-garments, shirts, sport clothes, hand-knitting yarns, curtains, draperies, hawsers, fish nets, tires, industrial fabrics and typewriter ribbons." Admittedly, both plastics and nylon are synthetic products. To the scientist engaged in experiments in his laboratory, plastic and nylon would very often appear to be essentially one product. Plastic by its very quality of being pliable would admit of various combinations. Nylon as a synthetic material would also admit of composition. It would not, however, be appropriate to carry the idea of the scientist into the words for getting their true meaning. In the commercial field, plastic and nylon have definite connotations and on account of the fact that they are alike products or are drawn fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... open to be advanced as the matter was not raised before the Tribunal and cannot be said to arise out of the appellate order in view of the rule laid down by the Supreme Court in the case of I.T. Commissioner v. S.S. Navigation Co. Ltd.[1961] 42 I.T.R. 589 (S.C.); A.I.R. 1961 S.C. 1633. It is also his contention that the assessee had suffered assessment at the rate of five per cent and the liability worked out on such basis had become final. The dispute has arisen because of the Sales Tax Officer raising the additional demand under section 12(8) of the Act on the footing that the assessee's turnover had been assessed at too low a rate. We think both these objections are insurmountable and preclude us from entertaining the new contention canvassed for the first time before us. 6.. It is unnecessary to answer each of the questions separately. In our view, a combined answer would serve the purpose and our answer, therefore, is: Nylon-ware and nylon twines are not covered by entry No. 7-C of the notification dated 30th December, 1957, made in exercise of the powers under the first proviso to section 5(1) of the Orissa Sales Tax Act. The assessees in these references shall be entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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