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TMI Blog1998 (3) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Schedule to the Karnataka Sales Tax Act, 1957 and as such, it should be taxed under the residuary clause, namely, section 5(1). This has given rise to the controversy in these proceedings. The petitioners herein challenge the clarification issued by the Commissioner of Commercial Taxes invoking his power under section 3-A of the Karnataka Sales Tax Act. 2.. I have heard Mr. Kishore Mallya and Mr. Nazeer, learned counsel for the petitioners, as also Ms. S. Sujatha, learned Government Pleader appearing on behalf of the respondents. At the outset, we will keep in mind the rule of interpretation to be followed while interpreting fiscal statutes and what has been laid down in this behalf by the Supreme Court in many cases. Following the said construction of interpretation, their Lordships in Sri Lakshmi Coconut Industries v. State of Karnataka [1980] 46 STC 404 (Kar), stated as under: 11. The principles which should be applied in the interpretation of entries in the sales tax laws laid down by the Supreme Court in the various decisions referred to earlier may be summarised as follows: (1) A sales tax statute, being one levying tax on goods, any particular term used to speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is absolutely no change in these ingredients. The molecular structure of the rice bran cake does not alter. All that what it denotes is that there is a variation in the percentage of oil after the distilling of the oil. There is no transformation of other items. The manufacturing process used in this behalf is only to distill the oil and the rice bran remains the same minus large content of oil. The oil is still traceable in the contents to a negligible extent. There is no release of a new product with different chemical components. As there is no total transformation, it does not cease to possess the character of rice bran even after the distilling is over. Here, it is pertinent to note that it is still possible to restore the character of rice bran provided the de-oiled rice bran is soaked in the rice bran oil. By that, whatever that lost is regained. In the circumstances, it is not easily possible to say that there has been a change of character in the rice bran by virtue of the extraction of oil. 4.. The contention of the learned counsel for the petitioners was that rice bran and de-oiled rice bran are practically one and the same and there is no change. According to them, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction of a different product by virtue of the extraction of oil. The de-oiled rice bran cake does not lose the character of rice bran as noticed from the scientific analysis report and the ingredients that are present in the rice bran are still present in the de-oiled rice bran cake. As such it has to be held that the de-oiled rice bran cake continues to remain the same even after oil is extracted from it. It is to be noted, as submitted by the learned counsel for the petitioner, that the oil which may not be a helpful ingredient for the manufacture of the cattle feed is removed, so as to make a rice bran useful for manufacturing cattle feed. It is certainly not a case of transforming to some other commodity. 6.. Several decisions were cited in this behalf by the respondent side. I do not think it is necessary to advert to these decisions. But nevertheless, we may deal with [1974] 33 STC 343 (All.) [Omrao Industrial Corporation (Pvt.) Ltd. v. Sales Tax Officer] and [1975] 35 STC 514 (All.) (Bhagwan Oil and Potato Chips Factory v. State of Uttar Pradesh) which deal with the case which considered the case as to whether oil-cake is a cattle feed. In this behalf in [1974] 33 STC 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After discussing the various issues, their Lordships took the view that in understanding the meaning of the expression, the description of the articles in common parlance should be applied. As there existed in the statute a specific entry as timber and firewood , the rule of interpretation applied there cannot apply to the question herein. Likewise, the learned Government Pleader cited the decision of the Supreme Court reported in [1981] 48 STC 254 (Annapurna Biscuit Manufacturing Co. v. Commissioner of Sales Tax, U.P.). In particular, she relied on the following passage: It is a well-settled rule of construction that the words used in a law imposing a tax should be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force. If an expression is capable of a wider meaning as well as narrower meaning the question whether the wider or the narrower meaning should be given depends on the context and the background of the case. In Hinde v. Allmond (1918) LJKB 893 the question was whether tea was an article of food within the meaning of an order designed to prohibit the hoarding of food, namely, Food Hoarding Order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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