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TMI Blog1986 (6) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessment (annexure A) and accepted the said claim of the assessee. 4.. In exercise of the powers conferred by section 22A of the Act, the Commissioner issued two show cause notices on 23rd July, 1983, and 17th September, 1984 (annexures B and D), to the assessee proposing to revise the order of the CTO on the exemption granted on the sales turnover of "lisa sugar" for the aforesaid period which was opposed by it on a large number of grounds. On an examination of the records, the cause shown thereto and affording an opportunity of hearing to the assessee, the Commissioner by his order dated 27th May, 1985, has revised the order of the CTO and has directed the CTO to levy tax on the sales turnover of "lisa sugar" of Rs. 2,22,500 under section 5(1) of the Act. Hence, this appeal. 5.. Sri K. Srinivasan, learned counsel for the assessee, contends that "lisa sugar" was nothing but "sugar" and, therefore, falls within the exempted article "sugar" of entry 31-B of the Fifth Schedule-goods exempted from tax under section 8 of the Act-as rightly found by the CTO and the view expressed by the Commissioner to the contrary was illegal and incorrect. In support of his contention Sri S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the status of sugar as is understood in common parlance by the common man, the common trader, common business, etc. 7.. In the light of the above, the proposition as indicated in the revised show cause notice dated 17th September, 1984, is confirmed and the case is remanded back to the assessing authority with a direction to levy tax under section 5(1) on lisa sugar valued at Rs. 2,22,500.00." Which of these findings are sound and legal in the interesting question that arises before us. 8.. Entry 31-B of the Fifth Schedule to the Act inserted by the Karnataka Sales Tax (Second Amendment) Act of 1958 (Karnataka Act 31 of 1958) with effect from 1st January, 1959, reads thus: "31-B. Sugar other than sugar candy, confectionery and the like." Prior to 1st January, 1959, there was no such entry in the Fifth Schedule to the Act. 9.. The rules for interpretation of entries found in the sales tax laws of the country have been explained by the Supreme Court in a large number of cases. In Indo International v. Commissioner of Sales Tax [1981] 47 STC 359 (SC); AIR 1981 SC 1079 the Supreme Court reviewing the earlier cases had expressed thus: "4. It is well-settled that in interpreting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oal' in the term 'coal' and held that 'charcoal' fell within the concerned entry I of Part III of Schedule II to the Act. 5.. Having regard to the aforesaid well-settled test the question is whether clinical syringes could be regarded as 'glassware' falling within entry 39 of the First Schedule to the Act? It is true that the dictionary meaning of the expression 'glassware' is 'articles made of glass' (see Webster's New World Dictionary). However, in commercial sense glassware would never comprise articles like clinical syringes, thermometers, lactometers and the like which have specialised significance and utility. In popular or commercial parlance a general merchant dealing in 'glassware' does not ordinarily deal in articles like clinical syringes, thermometers, lactometers, etc., which articles though made of glass, are normally available in medical stores or with the manufacturers thereof like the assessee. It is equally unlikely that a consumer would ask for such articles from a glassware shop. In popular sense when one talks of glassware such specialised articles like clinical syringes, thermometers, lactometers and the like do not come up to one's mind. Applying the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification biscuit cannot be treated as cooked food. The High Court of Allahabad has in an earlier case in Commissioner of Sales Tax v. Jassu Ram Bakery Dealer [1976] 38 STC 461 held that biscuit was not cooked food. The High Court of Madhya Pradesh has also taken the same view in Commissioner of Sales Tax, Madhya Pradesh v. Shri Ballabhdas Ishwardas [1968] 21 STC 309. We approve of the views expressed in the aforesaid decisions." Bearing these principles we must ascertain whether "lisa sugar" is sugar or not. 10.. In its appeal memo, the assessee had set out the process of manufacture of "lisa sugar" as under: "Process of manufacture of "lisa sugar" To manufacture 100 kgs. of 'lisa sugar', 98 per cent of sugar will be taken and this will be powdered by mechanical process and thereafter, 3 per cent liquid glucose and 1 per cent water is added back to the said powdered sugar and subsequently ½ per cent of essence and ½ per cent of starch is blended to the said product by means of mechanical operation. The final product that we procure is called 'lisa sugar' that is soft sugar which contains more than 90 per cent sucrose. * * * In the instant case 'lisa sugar' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , all the authorities including the Financial Commissioner are agreed on that point. It is also a cardinal principle of interpretation of statutes that unless it is necessary or specifically provided, definition in one statute cannot be transferred to construe a word or a term in another statute. In taxing statutes, particularly, artificial definitions are sometimes given by the legislature in its wisdom to provide for contingencies which the legislature considers necessary to provide for. Therefore, when the legislature, in the present case, defined sugar in the Central Act, it was for the purposes of that Act and no other Act. To import that definition into the local Act is not warranted either on principles governing interpretation of statutes or on any other judicial principle. We are of the view that the definition of the term 'sugar' given in the Central Act is given for the purposes of that Act. Sugar as used in local Act in entry 9 of the Second Schedule must be understood to be sugar which is understood to be that commodity by the common. man or by a shopkeeper or a trader or a customer. Even the contents of icing sugar make it clear that it is not the same as ordinary su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court and the Gujarat High Court turned on the term "sugar" in the language of entry 47 (of Schedule A) of the Bombay Act which adopted the very meaning in the Central Excises and Salt Act of 1944 (Act 1 of 1944) (1944 Act) to which aspect we will refer in some detail at a later stage. But, at this stage, it is suffice to state that the principles enunciated in Sakarwala Brothers' case [1967] 19 STC 24 at 30 (SC) interpreting an altogether a different entry, do not bear on the point and assist the assessee. What is true of Sakarwala Brothers' case [1967] 19 STC 24 at 30 (SC) is also true of the earlier Division Bench ruling of this Court in Abdul Malik's case [1963] 14 STC 214 which interpreted a similar entry of the Act. We are also of the view that a careful analysis of the ruling of this Court in Abdul Malik's case [1963] 14 STC 214 far from supporting the assessee, supports the revenue. 17.. Sri Srinivasan had urged that "sugar" as defined in the 1944 Act adopted in section 14(viii) of the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956) (CST Act), was a declared article and that in deciding the claim for exemption under the State Act, that very meaning shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gar" in the State Act, the same meaning given to the expression "sugar " in the CST Act. 23.. We will assume that Sri Srinivasan is right in his stand and examine the claim of the assessee from that stand point also. 24.. We are of the view that an assessee can claim exemption from payment of sales tax on "sugar" if and only if that very sugar is purchased and is sold by him in that very condition without any change thereto and not otherwise. 25.. We have earlier found that the lisa sugar sold by the assessee was not the very sugar purchased by him but was a different commodity. On this view, the claim of the assessee for exemption is not allowable. 26.. Sri Srinivasan has lastly contended that the direction of the Commissioner to assess the turnover under section 5(1) instead of section 5(4) of the Act was illegal. 27.. Sri Babu has urged that the direction of the Commissioner to assess the sales turnover under section 5(1) of the Act was legal and valid. 28.. We have earlier found that "lisa sugar" was an entirely different commodity and was not "sugar" occurring in entry 31-B of the Fifth Schedule to the Act. "Lisa sugar" is not covered by any of the entries in the Second ..... 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