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TMI Blog2024 (7) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... market - It is seen that though the Appellate Authority and the Revisional Authority have accepted and held that the items PET Reisins and PVC Granuels are not found in a chemical shop or a chemists shop, the said Common Parlance Test is rejected in the present cases. It would not be that if the items PET Reisins and PVC Granuels are not found in a chemical shop or a chemists shop, ipso facto the common parlance test would apply. However, since the authorities have not made any attempt to apply the common parlance test in the attending facts of the matter as required to be done, such action cannot be countenanced. In the present case, no definition is provided to Chemicals in the Assam Entry Tax Act, 2008. Therefore, for ascertaining the correct meaning of a fiscal entry the same should be construed as understood in common parlance or trade or commercial parlance. In COLLECTOR OF CENTRAL EXCISE, KANPUR VERSUS KRISHNA CARBON PAPER CO. [ 1988 (9) TMI 50 - SUPREME COURT] , the Hon ble Supreme Court has held that it is well-settled that where no definition is provided in the statute itself for ascertaining the correct meaning of a fiscal entry, reference to a dictionary is not always s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitions is identical on facts and law, same are disposed of by this common judgement and order. 3. The petitioners have challenged the levy of Entry Tax under the Assam Entry Tax Act, 2008 on PET Reisin and PVC Granuels on the ground that the said items are nowhere mentioned in the Schedule attached to the Assam Entry Tax Act, 2008 to make the same taxable. The Respondent Authorities have imposed Entry Tax on import of the items PET Reisin and PVC Granuels by referring them as Chemicals which is mentioned at Entry No. 51 of the Schedule attached to the Assam Entry Tax Act, 2008. Challenge is also to the consequent assessment orders passed by the respondent authorities levying Entry Tax on PET Reisin and PVC Granuels treating the same as Chemicals as well as the orders passed by the Appellate and Revisional Authrities confirming the same against the petitioners. 4. The petitioners are engaged in the business of manufacturing and sale of PET Pre-form within and outside the State of Assam. Raw materials required are procured from outside the State of Assam for the manufacturing purpose. Amongst other materials utilized for manufacturing, the petitioners imports PET Reisins and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted from outside the State of Assam is a Synthetic Fibre in solid form which cannot be considered as Chemicals under Entry 51 of the Schedule attached to the Assam Entry Tax, 2008. 11. The assessment orders were passed by the Assessing Officer under the provisions of Assam Entry Tax Act, 2008 in respect of the petitioners whereby Entry Tax was levied on the goods namely PET Reisin and PVC Granuels treating the same as covered by Entry 51 of the Assam Entry Tax Act, 2008, namely Chemicals for the periods 8.12.2009 to 14.08.2013 with interest. 12. Aggrieved by the impugned orders of assessment, the petitioners filed appeals before the Appellate Authority namely the Deputy Commissioner of Taxes (Appeals). The Deputy Commissioner (Appeals) accepted the fact that the items PET Reisins and PVC Granuels are not found or sold in a chemical shop. However, instead of interpreting and accepting the user test, the Deputy Commissioner (Appeals) first applied the Definition Test by stating that since as per the dictionary meaning chemical is a substance obtaining by chemical operation and therefore the items PET Reisin and PVC Granuels are chemicals. The Deputy Commissioner (Appeals) also appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficated that both the articles being raw materials are not considered as Chemicals by them, Ms. N. Hawelia, learned counsel, submits that both the articles being raw materials cannot be considered by any stretch of imagination as Chemicals . She submits that common parlance test / users test of interpretation needs to be applied for interpreting a commodity, meaning thereby the meaning which a common man would attribute to a particular product should be applied. Scientific meaning/ technical meaning/ internet meaning/ dictionary meaning etc. should be completely avoided. 16. She has submitted that the Appellate Authority namely the Deputy Commissioner of Taxes (Appeals) as well as the revisional authority namely the Additional Commissioner of Taxes have themselves accepted that the items PET Reisin and PVC Granuels are neither found in a Chemist Shop nor in a chemical Shop. Therefore, by applying common parlance test/ users test, the items PET Reisins and PVC Granuels cannot be held to be Chemicals by any stretch of imagination. As a hypothesis, she submits that a common man going to a Chemical Shop and asking for PET Reisins or PVC Granuels will not find it there. On the other han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the Schedule attached to the Assam Entry Tax Act, 2008, the same leads to only one conclusion that the Entry 51 relates to only Basic Chemicals only in liquid Form. 20. Ms. N. Hawelia, learned counsel, submits that Government of India, Ministry of Finance issued Notification No. 9(88) ST/57 which provides for goods eligible for purchase at concessional rate under CST. In the said Notification it has been specifically provided that in connection with Plastic Industries, the items PET Reisin has been specifically included under the heading Raw Materials and not under the heading Chemicals . Chemicals have been stated separately which includes Phenol, Formal dehydie, acetic acids and other chemicals etc., to which the respondent authorities failed to take note of the same. 21. Ms. N. Hawelia, learned counsel, submits that it is a settled proposition of law that while interpretating an entry in the Schedule if it is discernible that the said Entry is capable of two interpretations, one in favour of assessee and the other against the assessee, then in the said event the interpretation in favour of the assessee/ beneficial to the assessee is always to be resorted to. In the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h claims themselves to be correct. As for example on Internet if we search whether Peanut is good for health, we will get some articles which will say Peanut makes your life long, however, on the contrary there are some articles which claims the Peanuts are very bad for health and can even lead to early death. Both Articles are opposite and contrary to each other and both can be found on internet with conviction. Therefore, the internet meaning test adopted by the Respondents is not at all safe and as such, she submits that the items PET Reisins and PVC Granuels are not Chemicals so as to fall within the provisions of Entry 51 of the Schedule attached to the Assam Entry Tax Act, 2008. Therefore, the impugned assessments and orders under the Assam Entry Tax Act, 2008 may be set aside and the tax paid by the petitioners during the assessment and at the appellate and revisional stages may kindly be ordered to be refunded back to the petitioners. 26. In support of her submissions, Ms. N. Hawelia, learned counsel for the petitioners, has paced reliance on the following judgements:- 1. Gujarat Distributors vs. The State of Gujarat, reported in [1975] 36 STC 116 (Gujarat). 2. Additional C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011. Therefore, it is very clear that w.e.f. 09.12.2009 PET Reisins and plastic granules lend itself exigible to entry tax. Therefore, the contention made by the petitioners is not tenable in the eye of law. 29. Due consideration has been extended to the submissions of the learned counsel for the parties and have examined the materials available on record. 30. Under Schedule to the Assam Entry Tax Act, 2008, the specified goods are provided. Chemical is provided at Entry 51. It is noticed that the State has amended the Schedule at Entry No. 51 of the Assam Entry Tax, (amended Act, 2013), by substituting the chemicals excluding plastic granules. 31. It is noticed that with effect from 14.08.2013 the Entry of Plastic Granuels was included as Entry 51 (2) in the Schedule attached to the Assam Entry Tax Act, 2008 vide Notification dated 14.08.2013 and therefore, the present petitions does not cover the period after 14.08.2013. So far as the period from 28.02.2005 to 28.12.2009 is concerned the entry tax on entry of PET Reisin and PVC Granuels for use as raw materials in the manufacture of Plastic Items were exempted from entry tax. Therefore, the writ petitions relates only for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities appears to be an internet meaning test to which in my view would not be safe as the authorities have entirely applied the case on an article obtained from the internet which simply described Plastic Granuels as chemicals. But there would be many more articles which may describe differently. As rightly contended by the learned counsel for the petitioners, data available on internet is not always safe to rely on in as much as on internet one would always get different or opposite views. Thus, in my considered view the internet meaning test applied by the authority would be dangerous as the same is not safe. 37. The principles laid down by the courts in various decisions are that where no definition is provided in the statute for ascertaining the correct meaning of a fiscal entry the same should be construed as understood in common parlance or trade or commercial parlance. Such words must be understood in their popular sense. The strict or technical meaning or the dictionary meaning of the entry is not to be resorted to. The nomenclature given by the parties to the word or expression is not determinative or conclusive of the nature of the goods. The same will have to be determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) that the PET Reisin and PVC Granuels were not found in chemical shop. However, without resorting to the common parlance test, has purportedly applied the Scientific Test by holding that it has found an article whereby marketers, manufacturers and trade organizations divide chemical industry's products into three categories: (A) Basic Chemicals, (B) Intermediate Chemicals, and (C) finished ready to use chemicals and PET reisin is not used in mass consumption but used in to manufacture of plastic bottle/jars/containers for packaging drinking water or other liquid items and therefore should be chemicals. Thereafter, the revisional authority applied meaning from the Internet, and stated that somewhere in the internet, there was a broad category of chemicals and a sub-heading as plastic chemicals and therefore applied the Internet meaning Test of interpretation in the instant case. Further, it is held that even though Central Excise Act Tariff Schedule makes it very clear that PET Reisin and PVC Granuel falls under different category and chemicals fall under other category and both are not same, however the meaning given in the Central Excise Act cannot be borrowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied on by the learned counsel for the parties. 47. In the case of Gujarat Distributors (Supra), the High Court of Gujarat on Common Parlance Test, has held which is reproduced hrein under: 6. The short question which arises to be determined is whether the disputed articles can be considered as chemicals as stipulated by entry No. 4 or not. If they can be considered as such chemicals, then the petitioner should succeed, but if they are not found to be chemicals as stipulated by entry No. 4, then obviously they would fall within the ambit of entry No. 22 of Schedule E because there is no specific entry in any of the four schedules mentioning any of these four articles. 11. Even otherwise, applying the well-known test supplied by the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola ([1961] 12 S.T.C. 286 (S.C.)), when a taxing statute does not give statutory meaning to a word, that word should be given its popular meaning, i.e.. the meaning which is attributed to it in common parlance by people who daily deal with it as consumers or dealers in the market. This principle was further applied in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... always safe The correct guide in such a case is the context and the trade meaning. The trade meaning is that which is prevalent in that particular trade where such goods are known or traded If a special type of goods is the subject- matter of a fiscal entry then that entry must be under stood in the context of that particular trade, bearing in mind that particular word Where, however, there is no evidence how the particular goods are understood in the particular market dealing with those goods, then the meaning following from the particular statute at the particular time would be the decisive test . In its other decision in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 STC 286 also, the Supreme Court observed that if a word was not defined in the Act and it was a word of every day use it must be construed in its popular sense and not in any technical sense meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. Again, in State of UP v Kores (India) Ltd [1977] 39 STC 8, the Supreme Court made similar observations. However, after referring to the meaning of the word paper in Encyclopaedia Britannica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as for use as cover for the exercise-books and/or paperback publications. We thus, agree with the Tribunal that mill board is a kind of paper falling under entry 24 and/or 24(2) as the case may be. 49. In Pepsico India Holding Pvt. Ltd. (Supra), it is held that it has to be borne in mind that the words must be understood in popular sense, that is to say, these must be confined to the words used in a particular statute and then if in respect of that particular items, an artificial definition is given in the sense that a special meaning is attached to particular words in the statute then the ordinary sense or dictionary meaning would not be applicable but the meaning of that type of goods dealt with by that type of goods in that type of market, should be searched. The law laid down by the apex court in Collector of Central Excise, Kanpur v Krishna Carbon Paper Co. (1989) 72 STC 280, (1989) 1 SCC 150, therefore, has to be understood to mean that in the normal course the ordinary meaning according to the common parlance has to be ascribed but in a given case, if the situation so demands, a technical, scientific or special meaning that may be discernible may, have to be ascribed to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it, but is to be construed in its popular sense, meaning of course, by the words popular sense that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. 51. In Shen Enterprises, (Supra), the Hon ble Supreme Court has held that while dealing with a taxing provision, the principle of strict interpretation should be applied. The court shall not interpret the statutory provision in such a manner which would create an additional fiscal burden on a person. It would never be done by invoking the provisions of another Act, which are not attracted. It is also trite that while two interpretations are possible, the court ordinarily would interpret the provisions in favour of a taxpayer and against the Revenue. 52. In Shri Chitta Ranjan Saha, (Supra), it is held that it is also by now well-settled that if two views are possible regarding classification of certain goods the benefit must go to the tax payer. If a tax payer seeks advantage, which was not intended by the legislature, but to which he was entitled on a construction of the statute he must be given that advantage. The principles laid down by the courts in various decisions di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is whether the broad description of the article fits in with the expression used in the Tariff. 54. Coming back to the present cases, under the Assam Entry Tax Act, 2008, at Entry 51, Chemicals have been specified, however, at Entry- 55e, 55f and 55g it specified the items Caustic Soda, Sodium Silicate, and Alum, which would be mean and understood as Chemicals. As no mentioned is made of PET Reisin and PVC Granuels and no definition of Chemical is given in the Statute, same have to be therefore, in my view, interpreted that PET Reisin and PVC Granuels are not Chemicals. 55. The authority has held that chemicals are broadly under three categories: Basic Chemicals, Intermediate and finished ready-to-use. From a reading of Entry 51 along with Entry 55 (e), (f) and (g) it would be clear that Entry 51 refers to only Chemicals in liquid Form generally understood by the common person as Chemicals in as much as the intermediary and final ready-to-use which are generally in solid form are given under different categories under Entry 55(e) Caustic Soda, 55(f) Sodium Silicate and 55(g) Alum and therefore even if the view of the authority is accepted and read along with various entries of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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