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TMI Blog2011 (7) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... registered company under the Companies Act, 1956, having its registered office in Kolkata and Branch Office at several places including Guwahati, says inter alia, that it manufactures edible grade coconut oil and it is holding valid licence under the provisions of Prevention of Food Adulteration Act (in short, PFA Act). It says that its products meets all the requirements and standard of edible oil prescribed for BUREAU of Indian standard (hereinafter in short 'Bureau'). Further says that the coconut oil manufactured by the petitioner company has passed the test conducted by the National Test House, Kolkata The petitioner agrees that, its product under the Trade name "Shalimar Coconut Oil" falls within the taxing schedule prescribed under Entry No.24(i) of 2nd Schedule to the Assam Value Added Taxes Act, 2003 (hereinafter referred to as 'VAT Act' in short) without any ambiguity but the respondents No.2 and 3 have suo moto transponded the entry of coconut oil into 5th Schedule by an order issued vide No.CST - 48/2006/112 dated 11.10.2007 by the Commissioner of Taxes, Assam and notice No.12733 dated 16.11.2007 issued by the Respondent No.3, the Superintende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in part -A of the 2nd schedule. Schedule -IV pertains to list of goods taxable at the point of first sale in the State while 5th Schedule pertains to goods "All other goods not covered by 1st, 2nd, 3rd and 4th Schedule. We are also, thus, concerned with the 5th Schedule inasmuch as the coconut oil manufactured and marketed by the petitioner company is used mainly as hair of I and not as edible of I and it has been made taxable at the rate of 12.5% by issuing the impugned order dated 11.10.2007. Therefore, the issue involved in this case is whether coconut oil which is mainly and popularly used as hair oil and not as edible oil in Assam would be taxable at the rate of 12.5% under 5th Schedule to the VAT Act. In other words, whether the coconut edible oil manufactured by the petitioner-company in Assam would come under Entry 24(i) in part-A of the 2nd Schedule to the VAT Act to be charged tax at the rate of 12.5%. Dr. Saraf, learned senior counsel for the petitioner would submit that the impugned decision of the respondent-authorities in coming to a conclusion that the coconut oil in the State of Assam is not used for cooking but it is mainly used for hair oil and it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpret the food grade coconut oil manufactured by the petitioner under a valid licence to fall within the 5th Schedule to the VAT Act without any material on record by ignoring the settled principle of law. Seriously countering the submissions made by the learned counsel for the petitioner, Mr. K N Choudhury, learned Additional Advocate General, Assam would submit that the conclusion arrived at by the respondent- authorities that coconut oil in Assam is not used for cooking and it is mostly used as hair oil is based on market survey and as per the commercial parlance or market test. For application of common parlance and commercial parlance test in respect of a particular item, he would refer us to Commissioner of Trade Tax UP-vs-Associated Distributors Ltd. reported (2008) 7 SCC 409, wherein it is held that the Hindi word Mithai' as understood in the State of U.P. would not cover bubblegum inasmuch as bubblegum is an unclassified item taxable @ 10%. The reason was that the word 'Mithai' has a definite connotation and it can be said with reasonable amount of certainty that people in this country do not consider toffee as Mithai. Similarly in the case of coconut oil p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of right. We have carefully gone through the pleadings of the parties. We find that there is no dispute as regards the status of the petitioner as a company, manufacturer and trader of coconut oil in the State of Assam under valid licence/permit etc., issued by competent authorities. There is no dispute in regard to the fact that the petitioner is manufacturing/producing/marketing both hair oil and edible oil as per grade specified by the authorities concerned. What is in dispute is that the coconut oil is not popularly used by the people in Assam as edible oil. It is rather popularly used as hair oil only. We are aware that edible oil means oil for being used as medium of cooking. Coconut is undoubtedly a main medium of cooking, mainly in the southern States of India. In the rest of the country, including Assam, it is not usually/popularly used as edible oil or medium of cooking. It means that in common parlance, the coconut oil is not accepted as edible oil in Assam. The respondent-authorities may be right in excluding the coconut edible oil from Entry 24(i) of Schedule-2 and making it chargeable under 5th Schedule as residuary item levying tax at @ 12.5 %. Now coming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are distinct products for separate usages. There is no complaint to the effect that the petitioner company is defaulting in displaying the purpose or use of the product in the label pasted to the containers or packets. There is no difficulty for the common people in making out two different coconut oils, namely hair oil and coconut edible oil. There is no complaint received by the authorities that the common people have difficulty in identifying the coconut hair oil and vegetable oil sold in the market. It is, therefore, established that in common parlance edible oil is produced from coconut and sold in the country including the State of Assam. Thus, it appears that there are various tests applied for determining the meaning or connotation of words and expressions describing an article in taxing statutes. The mostly used tests are - common sense or popular test, trader or commercial parlance test, scientific and technical meaning test and user test. Some time dictionary meaning is also pressed into service for interpreting the items. For the purpose of deciding the present case it is not necessary to deal with application of the said tests. However, we feel it apt to bear in mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the utility of hair oil and edible oil. The words 'hair' and 'edible' are determinative of the usages of coconut hair oil and coconut edible oil. The result is conclusive in the sense that these two words are capable of clearly informing the users as to which oil is meant for dressing the hair and preparing the food items. We are, therefore, firm in our opinion that dictionary meaning and user test could safely be used in the present case for interpreting the statutory meaning of coconut hair oil and coconut edible oil although they may not be applicable to other cases. Therefore the test as applied to interpretation of 'Mithai' in Associated Distributors case (supra) has no application to the present case. The meaning of Mithai' as explained in the said case relates to edible items only that is 'Mithai' not the sweetmeat or bubblegum i.e. toffee. In the modern days people like to have different food items prepared by different media of cooking. Food items prepared in coconut oil is no exception. People from different parts of India, including southern region, out of employment, business, trade and other avocations, come to Assam. Many people ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial to support their claim that the coconut edible oil in the State of Assam is not used for cooking purpose and hence it cannot be treated as edible oil as it is mainly used as hair oil. We are not prepared to accept this view of the Govt. It is not really an out come of any common parlance test but an out come of guess work without any proximity to the reality in the present developing society in the State of Assam. Otherwise also it is the settled position of law that if two views are possible regarding classification of goods, the benefit must go to the tax payers. This has been pronounced in other decisions of the Supreme Court which have been followed by this court in Chitta Ranjan Saha's case (supra), wherein, following the said principles of law it has been observed that if a tax payer seeks advantage, which was not intended to by the legislature but to which he was entitled on consideration of statute, he must be given that advantage. We see a similar situation in the present case also. The statute namely the VAT Act never intended that coconut edible oil should not be included or would not come under the fold of edible oils in Entry No. 24(i) of the 2nd schedule and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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