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TMI Blog1996 (4) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... e III to the Act 6 of 1967 and accordingly deleted the addition. On a perusal of the order passed by the Appellate Assistant Commissioner, the Secretary to the Government in-charge of the Commercial Tax Department by exercising his power under section 37 of the Act came to the conclusion that the order passed by the Appellate Assistant Commissioner is erroneous and prejudicial to the interest of Revenue. Accordingly he issued the notice to the assessee. 3.. After hearing the learned counsel for the assessee and the departmental representative, the Secretary to the Government came to the conclusion that the Appellate Assistant Commissioner was not correct in deleting the addition made by the assessing officer with regard to the sales turnover of zarda, since according to the Secretary to the Government zarda is not exempted under item 25 of Schedule III of the Act. Accordingly, the Secretary to the Government set aside the order passed by the Appellate Assistant Commissioner in deleting the addition with regard to the sales turnover of zarda and directed the assessing authority to assess the sales turnover relating to zarda as originally done by the assessing authority. It is agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see submitted that there is no ground for the Secretary to the Government to come to the conclusion that the order passed by the Appellate Assistant Commissioner in granting exemption to the sales turnover of zarda in view of entry 25 of Schedule III of the Act is erroneous and prejudicial to the interest of the Revenue. Accordingly it was submitted that the order passed by the Secretary to the Government is liable to be set aside. 5.. On the other hand, learned Government Pleader, Pondicherry, submitted that in order to understand the meaning of the words "tobacco and all its products" one must follow the meaning attributable by a common man in common parlance. Scientific meaning for the words tobacco and all its products need not be attributable while interpreting the taxing statute. According to the learned Government Pleader, zarda is entirely different from tobacco and all its products. Therefore, it was submitted that the assessing officer was correct in taxing the sales turnover of zarda at 3.5 per cent single point. According to the learned Government Pleader, the Appellate Assistant Commissioner was not correct in deleting the addition made by the assessing officer. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Surti zarda is nothing but chewable tobacco and hence the said zarda should be exempted from sales tax. The assessee further contended that treating zarda as different from chewing tobacco is illegal and hence the notification dated February 5, 1968 and the notification of 1976 are illegal and ought to be quashed. In view of Notification No. 3604-CTA-38/67-F dated February 5, 1968 a new serial number 5-A was inserted and as per that serial number chewing tobacco, gudakhu, pan masala, gundi, zarda and snuff were assessed to sales tax at the rate of 3 per cent. Thus, all these commodities were made taxable. So also in the Notification No. 3609-CTA-38/67-F dated February 5, 1968, there was a further amendment to serial No. 35(2) as under: "Tobacco and all its products other than chewing tobacco, gudakhu, pan masala, gundi, zarda and snuff." Thus tobacco and all its products were made tax-free and the other commodities including chewing tobacco and zarda were made taxable. Again by Notification No. 16925-CTA-46/68(Pt)-F dated May 14, 1968, the words "chewing tobacco" were deleted from serial No. 35 and as a result of that chewing tobacco was made tax-free. This position continued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er foil content is 0.75 per cent. Nicotine content is stated to be 2.36 per cent. Thus it was stated that the zarda dealt with by the assessee herein would come under entry No. 25 wherein it is stated that tobacco and all its products are exempt from tax. 9.. The Andhra Pradesh High Court in [1967] 19 STC 412 in the case of Shamdas v. State of Andhra Pradesh had occasion to consider item 7 in Schedule 5 to the Andhra Pradesh General Sales Tax Act, 1957. The assessee was dealing in chewing tobacco. The assessee objected to the levy of tax on zarda on the ground that zarda is a tobacco product and it falls under item 7 of Schedule 5 of the said Act. The Commercial Tax Officer did not accept that contention. The matter was carried in appeal to the Assistant Commissioner of Commercial Taxes, who held that as zarda manufactured by the assessee had not suffered additional excise duty, the levy of sales tax was justified. He accordingly dismissed the appeal. The assessee then took up the matter to the Sales Tax Appellate Tribunal. The Tribunal also dismissed the appeal filed by the assessee. On revision before the High Court, the assessee submitted that the facts beyond dispute are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Act and the notification dated December 30, 1957, held that although mitha meant sweets, gundi contains only a small percentage of tobacco, it is tobacco product on account of its effectiveness on a particular class of consumers who are accustomed to take it and therefore falls under entry 35 in Notification No. 33925 CTA130/57-F dated December 30, 1957. It was further held that a taxing statute must be clear and precise in its incidence of taxationif any of the provisions is ambiguous the doubts must be resolved in favour of the subject. Again it was held that on account of the absence of definition of the expression "tobacco products" it is difficult to hold that preparations of tobacco cannot be said to be tobacco products. According to the facts arising in the present case, parag zarda dealt with by the assessee contains 98.95 per cent tobacco and the rest of the ingredients are only to make the tobacco chewable with fragrance. As we have already seen the exemption granted under the parent Act as stated in item 25 of Schedule III to the Act has not been taken away by any notification by the Pondicherry Government as has been done in the above cited cases. In such circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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