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TMI Blog2023 (4) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... , its popular or commercial parlance meaning has to be adopted as against its scientific or technical meaning because of the well-settled principle of interpretation that in taxing statutes, words of everyday use must be construed not in the scientific or technical sense but as understood in common parlance. However, the word appliance as used in Entry 35 of Part-II of Schedule is to be construed in the sense it is accompanied by other items. Further investigation into the matter revealed that in COMMISSIONER, SALES TAX VERSUS HM INDUSTRIES [ 1980 (1) TMI 172 - ALLAHABAD HIGH COURT ] it has been made clear that sewai ki machine is used as a means to an end; it is a device which gives the desired result by producing sewai by mechanical method. It is therefore an appliance. Sewai ki machine made of iron (machine for producing vermicelli) is understood in common parlance as kitchen appliance. Kitchen is a room where food is cooked, and it is in this sense that it is normally understood. An article may not be of direct use yet its use may be such without which it may not be possible to run the kitchen. Thus, the item in question cannot be attributed the meaning of all kinds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .82 of 2017 - - - Dated:- 27-3-2023 - HONOURABLE DR. JUSTICE B.R. SARANGI AND HONOURABLE MR. JUSTICE MURAHARI SRI RAMAN For Petitioner : M/s. Madhab Lal Agarwal, Standing Counsel (Commercial Taxes) Sunil Mishra, Additional Standing Counsel (Commercial Taxes) For Opposite party : M/s. Rudra Prasad Kar, Bhabani Prasad Mohanty, Aditya Narayan Ray, Shyam Prasad Bhuyan, Sriman Arpit Mohanty, Advocates MURAHARI SRI RAMAN, J. Challenge has been laid to Order dated 27th June, 2017 passed in Second Appeal bearing No.146(ET)/2014-15 by the learned Odisha Sales Tax Tribunal, Cuttack dismissing the appeal filed at the behest of the State of Odisha, represented by the Commissioner of Sales Tax, Odisha, directed against Order dated 31.03.2014 of the Deputy Commissioner of Sales Tax (Appeal), Bhubaneswar Range, Bhubaneswar in the Appeal Case No.108111311000068 whereby the demand raised in the assessment framed under Section 10 of the Odisha Entry Tax Act, 1999 for the tax periods from 01.04.2007 to 31.12.2010 by the Sales Tax Officer, Bhubaneswar-I Circle, Bhubaneswar vide Order dated 16.06.2011 has been reduced to NIL. Facts of the case: 2. The opposite party-deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Commissioner of Sales Tax representing the State of Odisha approached by way of filing STREV petition before this Court under Section 19 of the OET Act raising following questions of law: I. Whether on the facts and in the circumstances of the case melamine utensils, i.e., plates, bowls, spoons and dinner sets, etc. are exigible to tax @ 1% under Part-I of Schedule to the OET Act and thereby the Tribunal having not decided the issue in proper perspective, fell in error? II. Whether on the facts and in the circumstances of the case, the Tribunal committed error in misclassifying melamine utensils as non-scheduled goods under the OET Act, 1999? III. Whether on the facts and in the circumstances of the case, order of the Tribunal is unreasonable and perverse? Arguments advanced by respective parties: 3. Sri Sunil Mishra, learned Additional Standing Counsel taking this Court to the Entry Nos.23, 76, 79 and 91 of Part-I and Entry No.35 of Part-II of Schedule would submit that the learned Tribunal, being final fact-finding authority, ought to have examined whether melamine utensils fit into any of the items enumerated in the said entries bearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading with the dictionary meaning of each of these Entries reveals that the items Melamine Utensils manufactured by the instant dealer do not come within the meaning of any of these items. In Entry Tax Act, tax can be levied on the goods mentioned in the Schedule (M/s. Hindustan Lever Limited Vrs. Sales Tax Officer and another, vide Writ Petition (C) No.11400 of 2005 decided on 21.01.2010). As there is no specific mention of Melamine Utensils in the entries in the Schedule under OET Act the Ld. Assessing Authority has fallen into error by levying tax on Melamine Utensils under the Entry Tax Act. The Ld. Advocate is justified in contending that levy of entry tax on Melamine Utensils manufactured and sold by the dealer-petitioner is not scheduled goods under the Act. The learned Assessing Authority has, thus, erred in treating the items melamine utensils as scheduled goods and subjecting the same to be liable for taxed @1%. 4.1. He contended that such clear and loud reasoning of the Appellate Authority needs no elaboration. If the argument of Sri Sunil Mishra is accepted, then the Assessing Authority would levy tax @ 2% treating melamine utensils to fall within sweep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l fact and arrived at just conclusion, there was no scope for the Tribunal to show any indulgence in connection with the plea set up by the Commissioner of Sales Tax. Therefore, Sri Rudra Prasad Kar, learned counsel for the opposite party has suggested for dismissal of the revision petition. Consideration and analysis: 5. For appreciating the point at issue the following entries are extracted herein below: Schedule Part-I (subject to tax @ 1%) 23 Polythene, High Density Poly Ethylene (HDPE), Poly Propylene (PP) including wovensack, plastic goods , moulded luggage excluding plastic or moulded furniture 76 Stainless steel utensils 79 Articles made of China clay or Porcelene wire 87 Rice cooker, pressure cooker and kitchen ware/utensils 91 Glassware and crockery Part-II (subject to tax @ 2%) 35 All kinds of kitchen appliances including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation. It could find that: As mentioned in the Entry 35 of Par-II of the Schedule we find it to refer to all kitchen appliances. Melamine utensils cannot fit into the said entry as there is no specific mention of dinner set as evident from the Annexure-2 to the written note. . 8.1. At this juncture referring to the written note of submission filed on behalf of the opposite party-State of Odisha before the Tribunal, it transpired as follows: That the learned Assessing Officer taking a lenient view has taxed the said goods @ 1% by viewing the same to fall under Part-I of the Schedule. The dealer admittedly sold utensils which falls under Entry 87 of Part-I, as the dealer denies to be made liable under Entry 87 of Part-I having sold melamine utensils of dinner sets (as stated in course of hearing), therefore, the same shall have to come under the purview of genus Entry 35 of Part-II of Schedule liable to be taxed @ 2% inasmuch as it is a settled law that exemption of reduced rate is granted to an assessee on production of evidences and claims thereof. When the dealer denies the same, higher rate of tax is to be made application on the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chen. Thus, the item in question cannot be attributed the meaning of all kinds of kitchen appliance as enumerated in Entry 35 of Part-II of the Schedule. 8.5. Considering the items reflected in Entry 35 of Part-II of Schedule do not conceive of dinner sets , as stated in the written note of the Standing Counsel before the Tribunal. 9. Having failed in his valiant attempt to persuade this Court to drive that melamine utensils do fall within the wider understanding in trade parlance with regard to items specified in Entry 23, 76 and 79 of Part-I, Sri Sunil Mishra, learned Additional Standing Counsel has made suave shift towards raising the contention that at any rate the subject-goods would fall within the ken of Entry 87 of Part-I of Schedule. This aspect of his contention poses contradictory proposition. At paragraph 4 of the petition dated 08.12.2016 filed by the State Representative through Additional Standing Counsel before the Tribunal which is made Annexure-4 to the revision petition, it has been stated thus: That the first appellate authority should have inspected the finished product before coming to conclusion that melamine utensil is not scheduled goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hings as they signify according to their nature and import, but also things which the interpretation clause declares that they shall include. The words used in an inclusive definition denote extension and cannot be treated as restricted in any sense. When we are dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon the terms of wider limitation. As the word utensil is not defined under the Act, but in entry No. 5 the word used is all utensils including , it is inappropriate to put a restrictive meaning to the word utensil as understood in common parlance. The word utensil is a term of wider denotation. 14. It is to be remembered the word used in 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 imposed. If the expression is capable of a wider meaning as well as a narrower meaning the question whether the wider or narrower meaning should be given depends on the context and the background of the case. The terms and concepts appearing in the taxing statutes require to be understood the way in which they have been defined in the statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dant. The intention is clear that symbol / in Entry 87 of Part-I signifies that the OET Act wanted to restrict the levy of tax to such kitchen ware which are similar in nature and use as utensils and such utensils must be of similarity with goods as that of rice cooker and pressure cooker . Therefore, drawing distinction between entries in the OET Act and entries under the Karnataka statute, it may not be inept to say that Stovekraft Pvt. Ltd. (supra) does not come in aid of the contention of the Revenue. 9.5. Analysing the items contained in Entry 87 of Part-I in a different angle takes this Court to refer to the doctrine of ejusdem generis. The Latin expression ejusdem generis which means of the same kind or nature is a principle of construction, meaning thereby when general words in a statutory text are flanked by restricted words, the meaning of the general words are taken to be restricted by implication with the meaning of the restricted words. This is a principle which arises from the linguistic implication by which words having literally a wide meaning (when taken in isolation) are treated as reduced in scope by the verbal context . This principle is presume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. STO i.e., taxing it at 1% under the OET Act. So the contention in the write up differs from the grounds of appeal and no addl. ground is taken. Entry Sl. 87 mentioned supra very much suggests the utensils to be related to rice cooker, pressure cooker and kitchen range. It is also contended by the revenue to be dinner set, admittedly used on the dining table and not used for cooking purposes in the kitchen. As mentioned in the Entry 35 of Part II of the Schedule we find it to refer to all kitchen appliances. Melamine Utensils cannot fit into the said entry as there is no specific mention of dinner set as evident from the Annexure-2 to the written note. In the fresh argument the revenue did not contend it to be a plastic goods coming under Entry 23 of Part I of the Schedule. In this context while considering the taxability under the OET Act we follow the decision of the Hon ble High Court of Orissa pronounced in case of M/s Hindustan Lever Ltd. Vrs. Sales Tax Officer and Another, Writ Petition (C) No.11400 of 2005 decided on 21.01.2010. Accordingly, in Entry Tax Act, tax can be levied on the goods mentioned in the Schedule. As there is no mention of washing soap in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable under this Act a sum fixed in the prescribed manner, and in such a case the tax shall be deemed to have been compounded. 10.5. The aforesaid charging provision is required to be read along with provisions contained in another charging being Section 26 which is meant for fixing liability on the manufacturers. Section 26(1) reads as follows: Manufacturers to collect and pay tax. (1) Notwithstanding anything contained in this Act, every manufacturer of scheduled goods who is registered under the VAT Act shall in respect of sale of its finished products effected by it to a buying dealer or person, either directly or through an intermediary, shall collect by way of tax an amount equal to the tax payable on the value of such finished products under Section 3 of this Act by the buying dealer or person in prescribed manner and shall pay the tax so collected into the Government Treasury: Provided that the tax so payable by a manufacturer under this sub-section during a year shall be reduced by the amount of tax paid under this Act on the raw materials which directly go into the composition of the finished products during that year in the prescribed manner: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 11. Since plates, bowls, spoons and dinner sets were never came for adjudication before the Assessing Authority nor the First Appellate Authority, for the first time before the Tribunal the Revenue could not have raised such a plea. Having not taken firm stand before the factfinding authorities, the question of law No.I as posed by the Revenue does not fall for consideration. 11.1. So far as question of law No.II is concerned, the Tribunal has rightly not interfered with the appellate order inasmuch as at different times different stand was taken by the Revenue. This Court finds that no specific ground has been pleaded at the second appellate stage by the Commissioner of Sales Tax. Reading of ground No.3 of the second appeal vide Annexure-3 to the revision petition indicates that the Revenue seeks to impress that utensils of any nature is to be treated as utensils for all purpose so as to embrace within the sweep of Entry 87 of Part-I of Schedule. Close scrutiny of said entry ex facie makes it clear that said word being accompanied by the words rice cooker, pressure cooker and kitchen ware , it is to be understood in the same sense in which accompanied words conno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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