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TMI Blog1994 (9) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... vided family, owned movable and immovable properties including 144 tolas of gold ornaments. It claimed before the Wealth-tax Officer that the value of the gold ornaments was exempt under section 5(1)(viii) of the Wealth-tax Act, and, therefore, should not be included in the net wealth of the assessee under the Wealth-tax Act. It was contended on their behalf that gold ornaments were exempt from wealth-tax up to the assessment year 1971-72, because the Explanation to section 5(1)(viii) by which " jewellery " was defined to include ornaments made of gold, silver, platinum or any other precious metal, or any other alloy containing one or more such precious metal, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel, came into effect from April 1, 1972. Consequently, gold ornaments could not be said to be " jewellery " in terms of section 5(1)(viii) of the Act, on the valuation date earlier than April 1, 1972. The valuation date in each of the relevant years is in the month of September. The Wealth-tax Officer negatived the claim of the assessee, but on appeal the Appellate Assistant Commissioner following the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel ; (b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel. " It is necessary to notice the background in which section 5 of the Wealth-tax Act was amended by the Finance (No. 2) Act, 1971. In CWT v. Arundhati Balkrishna [1968] 70 ITR 203 (Guj), the court was considering the question whether the assessee was entitled to claim exemption in respect of jewellery or ornament irrespective of its valuation, if they were intended as articles for personal use of the assessee. The Revenue contended that an assessee would not be entitled to claim exemption for the jewellery and ornaments irrespective of their value under clause (viii) of section 5(1) on the ground that they are articles intended for personal use of the assessee, in view of the specific provision having been made in respect of jewellery belonging to the assessee under clause (xv) of section 5(1) as then existing, where an initial exemption of Rs. 25,000 was provided. The High Court rejected the contention and held that je ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any precious or semi-precious stone are not jewellery within the meaning of that term in clause (viii) of section 5(1) of the Act. On the other hand, the Revenue contends that Explanation 1 has been added by way of abundant caution, and even without Explanation giving to the term " jewellery " its ordinary meaning, it must be understood to mean not only ornaments studded with precious stones, but also ornaments made of gold, silver or other precious metal. In CWT v. Jayantilal Amratlal [1976] 102 ITR 105, a Division Bench of the Gujarat High Court considered a similar question of law referred to it for its opinion. It was urged before the court that as the Legislature had thought fit to define the term " jewellery " by Explanation 1, which had been brought into effect from April 1, 1972, the court cannot, for purposes of the assessment years 1963-64 and 1964-65, consider the dictionary meaning of the term " jewellery " as including ornaments also and, therefore, in view of the fact that jewellery as defined by Explanation 1 now being excluded from the purview of the exemption under clause (viii) could not be included in the net wealth of the assessee for the purposes of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Parliament does not afford any useful guide in the construction of the prior Act and the subsequent Act can be resorted to for purposes of construction of the prior Act only when both the Acts deal with the same subject and the part of the prior Act sought to be construed is equivocal and capable of different construction. The court: therefore, concluded that Explanation 1 to section 5(1)(viii) of the Act having come into force only with. effect from April 1, 1972, could not be considered as on the statute book in the relevant assessment years and for all intents and purposes, it would be a reference to a later Act of Parliament. As the natural meaning of the term " jewellery " was clear and precise, there was no justification for considering Explanation 1 for construing the term " jewellery " for purposes of the relevant assessment years. The word " include " though generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute, it was also susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that view of the matter, therefore, the last contention of Mr. Shah that this definition is exhaustive should be rejected. Mr. Shah, therefore, ultimately urged that when two reasonably possible interpretations are open, the court should prefer one which would be favourable to the assessee. In our opinion, the question of preference does not arise as the interpretation canvassed on behalf of the assessee cannot be said to be a reasonable or possible interpretation. " In an earlier decision in CWT v. Rajeshwar Parshad [1975] Tax LR 194, a Division Bench of the High Court of Punjab and Haryana took the same view. In that case, it was urged on behalf of the assessee that there was a difference between the ornaments and jewellery. The ornaments were normally of gold and the jewellery was embedded with precious stones. The contention was negatived by the court in the following words : " It appears from the order of the Tribunal that they were of the view that there is a difference between the ' ornaments ' and ' jewellery '. Both these expressions are not defined. Therefore, we have to fall back on the dictionary meaning. In Shorter Oxford English Dictionary ' jewellery ' means ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ' in common parlance especially in India would certainly include ornaments for personal adornment that are made from gold irrespective of whether they are studded with precious stones or not. When an Indian girl talks of her jewellery, she certainly means to include therein her gold bangles, chain, anklets, etc., even though they are not studded with precious or semiprecious stones. The difference sought to be made out between the two appears to us to be artificial. " It agreed with the view of the Punjab and Haryana, Gujarat and Allahabad High Courts. It did not agree with the contrary view of the Orissa, Calcutta and Madhya Pradesh High Courts. After noticing the contrary view, their Lordships observed : " We do not agree. We feel that the word ' jewellery ' as set out in the dictionaries as above noticed and as understood in common parlance, certainly includes gold ornaments. Gold ornaments made for personal use are almost always a jeweller's job and cannot be made by just anyone. A jewel itself is a costly ornament especially one made of gold, silver or precious stones. Precious stones are not a necessary ingredient to make a piece of jewellery. Exquisite filigree gold an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in clause (viii) shall have the meaning as given by the Supreme Court to the term and the legislative meaning given to the term by Explanation I shall operate from April 1, 1972. In that view of the matter, the deletion directed by the Tribunal of the value of the gold ornaments from the taxable net wealth was justified. " I find it difficult to agree with the view of the Orissa High Court. The Supreme Court in Arundhati Balkrishna's case [1970] 77 ITR 505 did not consider the question whether " jewellery " included gold ornaments or whether that term included only ornaments embedded with jewels and precious stones. The question before the Supreme Court was entirely different and the judgment of the Supreme Court renders no assistance in giving meaning to the word " jewellery ", in the context it has arisen in the instant cases. The decision of the Orissa High Court noticed Explanation 1, which was added with effect from April 1, 1972. The judgment proceeds on the basis that but for Explanation 1, the term " jewellery " would not have included ornaments made of gold, silver or any other precious metal which did not contain precious or semi-precious stones. It does not appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l ornaments. The ordinary meaning of the word as is known now will embrace precious or semi-precious stones and gold and silver ornaments which contain precious or semi-precious stones. It was in this sense that the word " jewellery " as used in clause (viii) has to be understood before April 1, 1972. The submission that the inclusive definition contained in the Explanation, which became effective from April 1, 1972, was added merely as a matter of abundant caution, was rejected, as in their opinion it was clearly intended to give a wider meaning to the word " jewellery " with effect from April 1, 1972. The very fact that the words " but not including jewellery " were retrospectively added with effect from April 1, 1963, and the Explanation was added with effect from April 1, 1972, by the same Finance Act in section 5(1)(viii), gave out a clear intention of Parliament that the wider meaning of the word " jewellery " as contained in the Explanation, was not to be applied for any assessment year prior to April 1, 1972. Their Lordships noticed that the dictionary meaning of the words " jewel " and " jewellery " would go to show that although these words in generic sense are used to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e court took the view that ornaments made of gold, meant for wearing on the person of the assessee fall within the ambit of the phrase " jewellery ". However, in Smt. Meera Jaiswal v. CWT [1982] 136 ITR 548 (P H), a co-ordinate Bench of the same court took a different view. Agreeing with the view of the Calcutta and Orissa High Courts, and disagreeing with the view of the Allahabad and Gujarat High Courts, their Lordships held that in popular parlance " jewellery " connotes use of stones, precious, semi-precious or even imitation in the ornaments concerned. It was for this that the Explanation was introduced and the meaning of the word " jewellery " was extended to include ornaments made of gold, etc. If in its ordinary meaning the term " jewellery " always included all ornaments made out of precious metals with or without stones, then the introduction of the Explanation to section 5(1)(viii) with prospective effect would be redundant and also absurd. It is surprising that the earlier decision of a Division Bench of the same court in CWT v. Rajeshwar Parshad [1975] Tax LR 194, was not brought to its notice, for I am sure if the same was brought to its notice, the learned judges w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derstood to be by way of abundant caution. If, on the other hand, it is held that " jewellery " cannot be understood to include ornaments made of gold, silver, platinum and other precious metals, without gems or precious stones studded or embedded in them, Explanation 1 must be understood as an inclusive definition giving an extended meaning to " jewellery " so as to include that, which, but for the inclusive definition, could not be considered to be " jewellery ". In my view, therefore, the fact that the amendment to section 5(1)(viii) was effected retrospectively, while Explanation 1 was added prospectively, cannot be of much significance in interpreting the word " jewellery " in section 5(1)(viii) of the Act, as it stood in the years of assessment in question. It cannot be lost sight of that an Explanation only functions to explain the meaning and effect of the main provision to which it is an Explanation, and to clear up any doubt or ambiguity in it. The dictionary meaning of " jewellery " appears to be wide enough to include articles of gold and other precious metals used for personal adornment. Jewellers' work ; gems or ornaments made or sold by the jewellers ; jewels colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th precious or semi-precious stones. I am inclined to agree with the view expressed by the Gujarat and Delhi High Courts, because I have no hesitation in holding that " jewellery " connotes articles made of precious metals and are meant for personal adornment. The fact that jewels or precious stones are embedded in such articles will not make any difference. The distinction sought to be made between ornament and jewellery to my mind is artificial. It may be that in different parts of the country ornaments made only of gold or other precious metal may be described in a particular way and different from ornaments which are studded with any precious or semi-precious stones. That, however, will not make any difference to the meaning of the word " jewellery ", because that must include ornaments meant for personal adornment made of gold, silver or any other precious metal whether or not studded with precious or semi-precious stones. Equally, there appears no reason to impute an intention to the Legislature that by excluding the jewellery from the exemption clause, it purported to exclude only ornaments studded with precious or semi-precious stones and not ornaments made of gold, silve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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