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TMI Blog1993 (12) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... case under article 226 of the Constitution in the Calcutta High Court being Case No. 12432(W) of 1976 as the taxing authorities were illegally realising sales tax and entry tax from him for bringing in and dealing in gurakhu. By a judgment dated September 21, 1984*, honourable Mr. Justice P.K. Majumdar found that gurakhu as a dentifrice is not exigible to sales tax as gurakhu is a tobacco product and tobacco is exempt from sales tax. Gurakhu being a tobacco product, it could not be called as a dentifrice and so no entry tax could also be imposed upon it. There was an appeal against the said judgment being Appeal Case No. 3451 of 1984 (State of West Bengal v. Gulabchand Harekchand). The appeal was dismissed on July 25, 1990 and the judgment *Reported as Gulabchand Harekchand v. State of West Bengal [1985] 59 STC 224 (Cal.). passed by the honourable trial court was not interfered with. In another judgment in Appeal Case No. 271 of 1986, by a Division Bench of the Calcutta High Court comprising honourable Mr. Justice A.K. Sengupta and honourable Mr. Justice K.M. Yusuf delivered on August 6, 1992, in the case of State of West Bengal v. Anil Krishal Paul reported in [1993] 88 STC 337, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teeth and gum. Tooth-paste can be used by every person, infant, young and old, but gurakhu can only be used by a few selected persons who are addicted to narcotic substance. Gurakhu has distinctive features which distinguish it from tooth-paste and tooth-powder and bring it within the meaning and scope of zarda, dokta and khaini and similar other manufactured tobacco products. The levy and collection of tax on gurakhu under the Entry Tax Act of 1972 are contrary to the provisions contained in articles 265, 301 and 304 of the Constitution. 3.. The Tobacco Board Act, 1975, which is a Central Act, came into existence in 1975 and the Central Government by a Notification No. 574(3) dated May 31, 1980, made section 10 and section 11 of the said Act applicable to the States of Maharashtra, West Bengal, Gujarat, Tamil Nadu and Uttar Pradesh. The said Act makes provision for sale and distribution of tobacco products through the Tobacco Board and sellers are required to be registered with the Board. Section 8 of the said Act enjoins establishment of auction platforms and section 14-A provides for levy of fee on Virginia tobacco sold at any auction platform. The Central Act having taken ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tobacco Board Act of 1975 in its application to West Bengal has nothing to do with the entry tax on gurakhu under the Entry Tax Act of 1972. The said Central Act was enacted with a view to control import and export of tobacco into or out of the territory of India particularly by the auctioneers. The applicants' prayers for direction, declaration and refund should be dismissed. 5.. The applicants have filed an affidavit-in-reply wherein they have reiterated their case in the main application. 6.. Learned Advocate, Mr. N. Bhattacharya, appearing for the applicants has contended that gurakhu being a product of tobacco and its essential ingredient being tobacco, it is known as a product of tobacco in common parlance and it is neither a tooth-paste nor tooth-powder and so, no entry tax can be realised from gurakhu although it is mentioned in item 41(c) of the Schedule in the Entry Tax Act of 1972. Mr. Bhattacharya has also contended that as tobacco is not an item in the Schedule to the said Act, gurakhu being a tobacco product cannot be subject to entry tax. Mr. Bhattacharya has contended that though the applicant has a judgment in his favour reported in [1985] 59 STC 224 (Gulabch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as to whether or not gurakhu can be taxed under the Entry Tax Act of 1972 since it had been specifically added in the Schedule of the taxed items in January, 1976. In the body of the said judgment, a reference has been made to a notification issued in January, 1976, wherein gurakhu was specifically added as serial No. 50(f) of the notified Schedule. In the present application also, it has been stated that the respondents have been assessing entry tax on gurakhu on the ground that the appeal judgment dated July 25, 1990 [State of West Bengal v. Gulabchand Harekchand (Appeal Case No. 3451 of 1984-Calcutta High Court)] relates to a period prior to 1976 and there is no decision in applicant's favour that gurakhu is not subject to entry tax on and from April 20, 1979, after its inclusion in serial No. 41(c) of the Schedule. In the instant case, we are, therefore, required to examine if gurakhu can be subjected to entry tax on its inclusion in serial No. 41(c) of the Schedule on and from April 20, 1979, in the Entry Tax Act of 1972. 8.. Mr. Bhattacharya, learned Advocate for the applicant, on citing a decision of the Supreme Court in the case of State of Orissa v. Radheshyam Gudakhu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle Judge and hold that the tax cannot be levied on 'gudakhu' or 'gurakhu' as the expression 'tobacco' covers it. The petitioner is entitled to exemption under the West Bengal Sales Tax Act and also under the Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972." 9.. With respect, we are unable to agree with the views quoted above. As already noted, gurakhu till before April 20, 1979, was not a specified goods in the Schedule of the Entry Tax Act of 1972. By an Amendment Act of 1979 (West Bengal Act 8 of 1979) which came into force by Notification No. 1805- F.T. dated April 20, 1979, the previous Schedule was substituted. Serial No. 41(c) in the said Schedule is now in respect of tooth-paste, tooth-powder, gurakhu. The tax rate is 2 per cent ad valorem. There is another serial being serial No. 22(c) which mentions zarda and snuff as specified goods where the tax rate is 6 per cent ad valorem. 10.. Section 6 of the Entry Tax Act, 1972, is the charging section. It provides that there shall be levied and collected for the purposes of this Act a tax on the entry of every specified goods into the Calcutta Metropolitan Area "for consumption, use or sale therein" from an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its established identity as gurakhu in the commercial field as well as in common parlance. 11.. Mr. N. Bhattacharya, learned Advocate for the applicant, has contended that tobacco having not been specified in the Schedule, no tax can be assessed on gurakhu. We are unable to accept Mr. Bhattacharya's contention as we are of the view that there is no need to bring tobacco in the Schedule in order to make gurakhu exigible to entry tax. Mr. Bhattacharya in his synopsis of written argument has stated that without bringing tobacco in the Schedule, items like zarda, khaini, dokta, snuff, etc., manufactured from tobacco can be arbitrarily taxed under the Entry Tax Act. We have already noted that under serial No. 22(c) zarda and snuff are specified goods in the Schedule to the Entry Tax Act of 1972 and those are subject to 6 per cent ad valorem tax. Mr. S.N. Bose, learned Advocate for the respondents, has cited a decision reported in [1989] 74 STC 221 (Cal) (State of West Bengal v. Nitai Mohan Saha) and has contended that if a particular article is otherwise an item of specified goods and it is for consumption, use or sale in the Calcutta Metropolitan Area, that is sufficient for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permutations and combinations and established a Tobacco Board for regulating sale and purchase of tobacco under entry 52 of List 1, the entire field of tobacco was fully occupied and nothing remained for State to do and that by virtue of the 1975 Act the Central legislation has taken within its ambit the entire tobacco industry and the State Legislature has ceased to have any jurisdiction to legislate in that field. Respondents' learned Advocate, Mr. S.N. Bose's contention is that, under section 20 of the Central Act, the Central Government has taken over the power to regulate and control import and export of tobacco and tobacco products. The Central Act has nothing to do with the Entry Tax Act of 1972 which provides for levy and tax on the entry of goods specified in the Schedule appended to the Act. 14.. The preamble to the Tobacco Board Act, 1975, shows that it is an Act to provide for the development under the control of the Union of the tobacco industry. Its declaration under section 2 shows that it is expedient in the public interest that the Union should take under its control the tobacco industry. Section 4 of the Act provides for establishment of a Tobacco Board. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Parliamentary Act of 1975 does not approach even the fringe areas of the State Entry Tax Act of 1972 in so far as it relates to levy and collection of entry tax on gurakhu. We are, therefore, of the opinion that tax can be validly levied and collected on gurakhu under the Entry Tax Act of 1972. 16.. In the above view of the matter, the applicants are not entitled to any relief. The application is dismissed. The interim order of injunction dated January 8, 1993, is vacated. There shall be no order for costs. P.R. BALASUBRAMANIAN (Technical Member).-I agree. S.P. DAS GHOSH (Chairman).-I have perused the judgment prepared by my learned brother, honourable Mr. S.N. Mukherjee. Though I agree with the conclusion that the application is to be dismissed, I want to give my own reasoning for dismissal of the application. 19.. The questions involved in the application are,- (a) whether gurakhu or gudakhu is taxable under item 41(c) in the Schedule to the Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972 (hereinafter referred to as "the Entry Tax Act" for the sake of convenience) and (b) whether the State of West Bengal has legislative competence to impose tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act of 1941, no tax is payable on the sale of goods referred to in Schedule I of that Act of 1941. In item 18 in Schedule I of the Act of 1941 "Tobacco for hookah, that is to say tobacco paste ready for use in hookah" was mentioned. Rule 3(28)(b) of the Bengal Sales Tax Rules, 1941 provided that a dealer was entitled to deduct from his gross turnover sales of tobacco other than cigarettes. In the explanation to rule 3(28)(b) of those Rules of 1941, tobacco was defined as having the same meaning as attributed to it in the First Schedule to the Central Excises and Salt Act, 1944. Rule 3(28) of those Rules of 1941 have since been omitted. Item No. 57 has been added in Schedule I to the Act of 1941. That item No. 57 reads as follows: "57. Tobacco as referred to in the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), other than cigarettes." 21.. As tobacco was not exigible to tax under the Act of 1941 because of rule 3(28)(b) of the Rules of 1941, gudakhu, which was found to be a product of tobacco, was held by the Calcutta High Court to be not exigible to tax under the Act of 1941. As no commodity which is not exigible to tax under the Act of 1941 can be lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopt the meaning in common parlance. In this context, I am to refer to the following passage from Craies on Statute Law, 6th Edition at page 164, which has been quoted with approval by the Supreme Court in the case of MSCO Pvt. Ltd. v. Union of India AIR 1985 SC 76: "In construing a word in an Act caution is necessary in adopting the meaning ascribed to the word in other Acts. 'It would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to, such an interpretation is given to it for the purposes of that Act alone'." 23.. Gurakhu is not defined in the Act of 1941 or in the Act of 1954 or in the Entry Tax Act. It is now well-settled that meanings given to articles in fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in usual course. (Dunlop India Ltd. v. Union of India AIR 1977 SC 597). Irrespective of the question as to whether gurakhu is taxable under the Act of 1941 or the Act of 1954, gurakhu will be taxable under the Entry Tax Act for insertion of gudakhu in item No. 41(c) in the Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Entry Tax Act is imposed under item 52 in List II of the Seventh Schedule of the Constitution. The State Legislature does not cease to have the power to impose tax conferred by an independent entry in List II of the Seventh Schedule, when that independent entry has no proximate connection with the control or regulation of a declared industry like tobacco. In the case of Ganga Sugar Corporation Ltd. v. State of Uttar Pradesh [1980] 45 STC 36; AIR 1980 SC 286, the question for consideration before the Supreme Court was the validity of the U.P. Sugarcane (Purchase Tax) Act, 1961, in spite of entry 52 in List I of the Seventh Schedule of the Constitution. In that case, the Supreme Court considered the question as to whether that Purchase Tax Act in U.P. was ultra vires because the State entered the forbidden field by enacting on sugar industry, which was a controlled industry. The Supreme Court considered this question in the light of the provisions in article 246(1) of the Constitution as well as entry 54 in List II of the Seventh Schedule, which empowered the State to legislate for taxes on purchase of goods. It was held by the Supreme Court in that case that entry 54 in Li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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