9911796707
TMI Blog1995 (3) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... amended to state that "agricultural implements except tractors, power tillers and other implements operated by power and spare parts and accessories and component parts thereof " are exempt from payment of sales tax, the applicant has not been paying any sales tax on his sales of "diesel engine pump sets" even up to the last quarter of 1991-92 up to which returns were duly filed, disclosing the sales figures but claiming exemption under section 5(2)(a)(i) of the 41 Act. In March, 1992, a question was raised by the department whether such "diesel engine pump sets" used for agricultural operations and purposes could be treated as "agricultural implements" within the meaning of serial No. 13 of Schedule I to the 41 Act or could be treated as taxable goods, though used for agricultural purpose. This matter was set at rest by a judgment* of this Tribunal in case No. RN-128 of 1992 on an application by him. It was held therein that diesel engine pump sets for use in agriculture are not implements of the nature of tractors and power tillers, to be covered by the expression "other implements" and that diesel engine pump sets for use in agriculture, being agricultural implements are not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not and cannot be included within the expression "implements operated by power" as would be obvious from the fact that the exception column of serial No. 13 of Schedule I does not read "excepting pump sets" which would be the case had it been the intention of the Legislature to subject diesel engine pump sets also to tax. Diesel engine pump sets are not implements operated by power, since "power", according to Webster's Seventh New Collegiate Dictionary, at page 666, has been defined to mean "a source or means of supplying energy, esp. electricity". Hence, the diesel engine pump sets, sold by the applicant which are not or cannot be run by electricity and which are used only by agriculturists in their agricultural operation, would continue to be exempt in terms of item No. 13 of Schedule I to the 41 Act even after the 93 amendment. If it is held otherwise that diesel engine pump sets will also be treated as taxable goods in spite of the judgment of this Tribunal in 1992 and because of the 93 amendment, such amendment as made retrospectively with effect from October 1, 1982, is completely illegal, unjust, arbitrary, confiscatory and violative of article 19(1)(g) of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a device definitely operated by power. Further, if "power " means only electricity and implements "operated by power" mean only those operated by electricity, the word "electricity" would have been used instead of "power" had it been the legislative intention. Diesel engine pump set was exigible to sales tax since registration of the applicant-firm under the 41 Act even prior to the order dated July 30, 1992, of this Tribunal and it again becomes exigible to sales tax by virtue of the 1993 amendment with retrospective effect. Since the applicant used to collect and deposit sales tax on sales of diesel engine pump sets from its registration up to the quarter ending March, 1991, there cannot be any question of extraordinary amount of unforeseen liability devolving on the applicant and consequential closure of business in view of the 1993 amendment giving retrospective validity which the State Legislature is competent to do. Diesel engine pump sets are used in various fields and the purpose of the 1993 amendment is to impose tax on sale of diesel engine pump sets along with other agricultural implements operated by power. The exception column of item 13 of Schedule I to the 41 Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment which is invalid and unauthorised. Power means electricity in commercial and popular parlance as well and the 93 amendment has no application to agricultural implements operated otherwise than by power. The Legislature has not used the words "operated by any form of power" as sought to be interpreted by the respondents but has only used the words "operated by power". It is a well-settled principle of law that, while interpreting a word or a provision in a taxing statute, resort should be had not to the scientific and technical meaning of that term or the expression used, but to their popular meaning, that is to say, the meaning attached to them by those dealing in them, where any term or expression has not been defined in the enactment. In common and commercial parlance, power would mean "electricity" as could be appreciated from expressions like "power position of West Bengal, Power Minister, Ministry of Power, power shortage, surplus power", etc., and in none of these expressions used in common parlance, diesel comes in or is spoken about. Diesel engine pump sets used for agriculture have been conclusively held by this Tribunal as tax-free goods under item 13 of Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Schedule I were there even prior to the 93 amendment. However, it is only after this Tribunal's judgment of July 30, 1992 in RN-128 of 1992 (Shri Parameshwarlal Behani v. C.T.O. [1993] 90 STC 370) that the respondents have taken the present stand that diesel engine pump sets, though agricultural implements, are operated by power and hence they are not exempt from liability to tax under the 41 Act. 9. Mr. J.K. Goswami, the learned State Representative, drew our attention to item 27 of Schedule I which refers specifically to "electrical energy" and sought to contend that the words "operated by power" used in column 2 of item 13 therefore refers to all forms of energy including electrical energy as also diesel engine pump sets and other implements operated by any form of power. This is indeed rather far-fetched. Item 27 merely connotes that "electrical energy" and not other forms of energy are exempt, and cannot be said to imply anything more. He also drew our attention to the definition of power given in the Law Lexicon of Vankataramaiya, 2nd Edition, 1986, at page 1864. However, it would appear that the word "power" has been explained therein with reference to the definition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the West Bengal State Electricity Board. Mr. Bose also cited various decisions to support his claim that power primarily refers to electricity. In the case of Nandi Dall Industries v. State of Karnataka reported in [1994] 92 STC 206 (Kar), the question arose as to when a newly set up industrial unit could be said to have been set up. It was held that power supply by Karnataka State Electricity Board was sanctioned in 1989. It was not possible to say that the unit was set up, until it had the requisite power supply (electricity supply) to operate the machinery. In the case of State of Tamil Nadu v. Associated Engineers and Traders reported in [1994] 92 STC 313 (Mad.), the question was whether submersible electrical pumps would fall within the category "power driven pumps" being item No. 99 or "electrical goods" being item No. 41 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. It was held that words, which are not defined in a taxing statute but are words of everyday use, must be construed not in the scientific or technical sense but as understood in common parlance. It was further held that submersible electrical pumps are basically pumps which are power oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.. In view of the above finding, it is not necessary to go into the alternative case put forward by Mr. S.N. Bose on behalf of the applicant that the retrospective application of the amending Act of 1993 with effect from October 1, 1982, is unconstitutional, being violative of articles 14 and 19(1)(g). Suffice it to record that Mr. Bose relied for his contention on a number of judgments cited in [1976] 38 STC 163 (Cal) (Bengal Paper Mill Co. Ltd. v. Commercial Tax Officer), [1991] 83 STC 59 (Ker) (Mega Traders v. State of Kerala), [1993] 90 STC 178 (AP) (Central Wines v. Govt. of A.P.), [1985] 58 STC 1 (SC); [1984] 150 ITR 648 (SC) (Cawasji Co. v. State of Mysore) and [1989] 74 STC 401 (SC) (Ujagar Prints v. Union of India). Shri J.K. Goswami, the learned State Representative, relied on the decisions reported in [1973] 31 STC 314 (SC) (Tirath Ram Rajindra Nath v. State of U.P.) and [1961] 12 STC 429 (SC) (J.K. Jute Mills Co. Ltd. v. State of Uttar Pradesh) to support his case that the amending Act of 1993, though given retrospective effect from October 1, 1982, was still valid and constitutional and within the competence of the State Legislature. 13.. In the result, the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a term in an entry in a taxing statute has not been provided, the expression should be understood in the manner it is understood in the trade, namely, common parlance and also with reference to the way in which the concerned department of the Government has interpreted the same. I am unable to agree although it is the common parlance principle which should be generally applied. I will presently give my reasons. In this connection, Mr. Bose referred to the "State Scheme of Incentives for Cottage and Small Scale Industries, 1989" issued by the Cottage and Small Scale Industries Department of Government of West Bengal, wherein high tension and low tension power lines were mentioned. According to Mr. Bose, the said scheme used the term "power" as electricity and nothing else. It is clear from the context in which the word "power" was used therein, that it was referring to only electricity, because it was preceded by H.T. for high tension and L.T. for low tension. These technical expressions referred only to electrical energy. But, simply because the word "power" was used in such a context, it cannot be said that the term "power" is confined only to electricity for the purpose of item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 1990 SC 1579, it was held that such trade understanding or commercial nomenclature can be given only in cases where the word in the tariff entry has not been used in a scientific or technical sense and where there is no conflict between the words used in the tariff entry and any other entry in the Tariff Schedule. Similarly, it was held in the case of D.H. Brothers Pvt. Ltd. [1992] 84 STC 267 (SC); AIR 1991 SC 1992 that meaning to entries in taxing statutes should be given as intended by framers of the statute. In that case, it was held that sugarcane crushers were not agricultural implements because the latter are those which are by and large used for cultivation of land and other operations which foster the growth of and preserve the agricultural produce. In [1994] 95 STC 561 (SC) (Karnataka Forest Development Corporation Ltd.), it was held that the commercial parlance meaning is not applicable for determining meaning of "forest produce" for the purposes of forest development tax. We may recapitulate that the amended item 13 says that agricultural implements except implements operated by power are tax-free. If diesel engine pump sets are held to be implements operated by pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... senger-carrying vessels favour turbines that provide more speed and less vibration, cargo vessels, especially the largest sizes, provide from low-cost diesel power." According to Oxford Reference: Concise Science Dictionary, 1990 Reprint, "power" means: "The rate at which work is done or energy is transferred". Thus, it is a genus under which both electricity and the energy generated by a diesel engine are species. 18.. It is, therefore, clear that a pump set run by a diesel-operated engine is an implement operated by power. 19.. Since my finding is that diesel engine pump set is an implement operated by power, such a pump set is liable to tax, having been excluded from item 13 in the Schedule I. Though such a pump set may also be an agricultural implement, due to the exception clause in column 2 of item 13 it is excluded from the category of tax-free agricultural implements. Mr. S.N. Bose, learned advocate for the applicant, challenged the validity of the 1993 amendment of item 13 as far as its retrospectivity is concerned. The history of the 1993 amendment has been dealt with in detail in the judgment of the honourable Technical Member. In this connection Mr. Bose relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the declaratory judgment are removed or cured, and such a validating law can also be made retrospective. No individual can acquire a vested right from a defect in a statute and seek a windfall from the Legislature's mistakes. Such legislation is well recognised, and except under extraordinary circumstances, courts would be reluctant to override the legislative judgment. 20.. On behalf of the Revenue reliance was placed on [1973] 31 STC 314 (SC) (Tirath Ram Rajindra Nath v. State of U.P.). There, retrospective amendment of the law was upheld, holding that such a course was not an encroachment on the judicial power. Mr. Goswami, learned State Representative, also relied on [1961] 12 STC 429 (SC) (J.K. Jute Mills Co. Ltd. v. State of Uttar Pradesh) at page 439. There also, a retrospective amendment was upheld. 21.. Similarly, it was held in the case of Nandu Mal Girdhari Lal AIR 1992 SC 2084 that the Legislature has plenary powers to pass legislation prospectively as well as retrospectively. 22.. The instant amending legislation of 1993 by which item 13 of Schedule I to the Act of 1941 was amended with express retrospective effect, seeks only to remove the defect or lacuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication before this Tribunal claiming exemption from payment of sales tax on sales of diesel engine pump sets. That application, registered as RN-128 of 1992 (Shri Parameshwarlal Behani v. C.T.O. [1993] 90 STC 370) was disposed of by a Division Bench of this Tribunal on July 30, 1992. The decision of the Tribunal in that case was that diesel engine pump sets for use in agriculture are not implements of the nature of tractors and power tillers and were agricultural implements which were tax-free. After the delivery of judgment by this Tribunal in that case, the amendment of item 13 of Schedule I of the Act took place omitting the words, "tractors, power tillers and other" in the exception clause of item 13 of Schedule I of the Act. Thereafter the present application has been filed by the same applicant Parameshwarlal Behani challenging any imposition of sales tax on sales of diesel engine pump sets inspite of the aforesaid amending Act, 1993. The applicant's contention is that diesel engine pump sets operated by power means actually diesel engine pump sets operated by electricity and not any other form of power. The respondents' contention is that diesel engine pump sets, for agric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by referring to some other Acts or Schemes such as "the State Scheme of Incentives for Cottage and Small Scale Industries, 1989", issued by the Cottage and Small Scale Industries Department of the Government of West Bengal (AIR 1981 SC 951 Union of India v. R.C. Jain). That the word "power" in the exception clause of item 13 in Schedule I of the Act means not only electrical energy but also energy produced with the aid of diesel engine is evident from the fact that even the applicant paid tax on the sale of diesel engine pump sets up to about 1990. It was not decided by this Tribunal in the judgment delivered in RN-128 of 1992 (Shri Parameshwarlal Behani v. C.T.O. [1993] 90 STC 370) that the word "power" in item No. 13 of the aforesaid Schedule of the Act meant only electrical energy. In fact, this question, though emphasized by the Revenue in their affidavit-in-opposition in the aforesaid case, was not gone into at all by this Tribunal for deciding that case which was decided on invoking the principle of ejusdem generis. The expression "other implements operated by power" was considered by this Tribunal as meaning implements in the nature of tractors and power tillers. The faires ..... X X X X Extracts X X X X X X X X Extracts X X X X
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