Commercial Tax Officer, Siliguri Charge vs Sariam Tea Seed Garden

Pinaki Chandra Ghose, J.—This application is directed against an order passed by the Learned Tribunal dated January 16, 2003 where the Learned Tribunal held that "Camelia Flower Seeds" come within the Entry No. 37 of Schedule - I of the West Bengal Sales Tax Act, 1994. Therefore, the only question to be decided by us in the matter that whether the "Tea Seed" is the essence of "Camelia Flower Seeds" and can be exempted from the Sales Tax.

It is clear from the Act that no tax is payable on sale of goods specified in Schedule - I of the said Act. It appears that an assessment order was passed for a period ended on March 31, 1997 levying Sales Tax of "Tea Seeds" sold by the Respondent No. 1. The Respondent No. 1 - dealer took the point in appeal that the said seeds come within the meaning of Schedule - I under Entry No. 37 of Schedule - I. Hence, it is tax-free. The Assistant Commissioner of Commercial Taxes held against such contention of the Respondent No. 1. Being aggrieved. The Respondent No. 1 filed an application before the West Bengal taxation Tribunal on of April 28, 2000. The matter was remanded back for fresh consideration. The Assistant Commissioner held in favour of the Respondent No. 1 but by a suo motu revisional order the Deputy Commissioner of Commercial Taxes held that tea seed does not come within the Entry No. 37 of Schedule - I of the said Act. Again application was filed before the leaned Tribunal and the Learned Tribunal on February 11, 2005 held in favour of the Respondent No. 1 and came to the conclusion that tea seed is a flower seed and comes under Entry No. 37 of Schedule - I of the said Act. The contention of the Petitioner that tea plant belongs to "Camelia" family, i.e., Camelia Japonica from which Camelia Flowers grows and Camelia Sinensis (L) O Kuntze which produces Tea and, therefore, it is exempted. But it is contended before us that the Entry No. 37 of Schedule - I clearly defines "Flower Seed" to mean "seed for growing flower plant". The expression "flower plant" obviously refers to a plant which in common parlance is known to produce flowers which is adored and used for decorative purpose. The words "flower plant" cannot refer to any every plant capable of bearing flower.

It is submitted while interpreting a statute and confronted with a situation like the present one, Court must look into the intention of the Legislature and reliance was placed in the case of Nataraj Talkies Vs. The State of Karnataka and Another,

It is submitted that the Respondent No. 1 admittedly sells tea seeds to tea garden owners who use the same to grow tea bushes for producing tea. Thus, tea seed cannot be equated with for growing flower plant. It is further contended that the Learned Tribunal has wrongly applied the doctrine of favourable construction in favour of the Respondent No. 1 on the ground that the said Act is a taxing stature. The rule of construction which required an ambiguous provision in a taxing statute to be construed in favour of the dealer does not extend to a provision for exemption in the statute. It is further pointed out that with effect from April 1, 2000 a new entry as Entry No. 96 has been added to Schedule - I of the 1994 Act and making sale of ''tea seed'' tax-free. Therefore, it clearly shows that the intention of the legislature that tea seed is not included under Entry 37 of Schedule - I and that is the reason it was made tax-free on and from April 1, 2000 and, therefore, the Learned Tribunal wrongly construed Entry No. 37 of Schedule - I and came to such conclusion. Hence, it is submitted that the order should be set aside.

On the contrary, the Learned Advocate submitted while ''Camelia Japonica Seed'' cannot be said ''Flower Seed'', Camelia Synensis'' cannot be said to be so for the reason that while the former type of Camelia Flower'' is ornamental and fragrant the latter is not so. This interpretation is totally incorrect. According to Mrs. Roy and she relied upon judgment reported in Shri Shiv Kumar Bajaj v. Additional Commissioner of Commercial Taxes, Shri Shiv Kumar Bajaj Vs. Additional Commissioner of Commercial Taxes and Others, which states as follows:

...that the duty and obligation of the statutory authority was to adhere to the requirement of statute and no extraneous matter ought to be taken not of. The creatures of the statute in taxing statutes were to follow the rigours of law and no extraneous matter ought to be taken into consideration in interpreting taxing statute?.

On the contrary, it has been held by the Hon''ble Supreme Court of India that a term used in Sales Tax Statute when defined in the Act has to be understood and interpreted according to such definition and in absence of any such definition in the Act, the meaning attributed in common parlance or commercial parlance or popular parlance may be accepted. In the instant case, Camelia Flower Seeds stand exempted not only as per definition but also by virtue of common parlance, commercial parlance and popular parlance as held by the Appellate Authority in this case particularly when scientific and technical meaning of a term is of no consequence. Similar view has also been held by Kerala High Court in the case of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes, Erna Kumar v. K. Ummul Kulsu 92 STC 450.

The Apex Court has gone so far as to say in the case of Collector of Customs, Bombay v. Swastic Woollens (P.) Ltd. and Ors. 72 STC 201 (SC), that when a fact finding authority has come to a particular determination of a fact after considering all the circumstances the higher authority cannot negate such a fact merely by change of opinion.

Therefore, she further relied upon in the case of Harbans Lal Malhotra v. Assistant Commissioner, Sales Tax, Ghaziabad 107 STC 98, and contended that mere change of opinion and on the part of the Revisional Authority cannot entitle him to revise an order passed by the Appellate Authority based on detailed determination of facts. Moreover, law is well settled that the opinion favourable to the assessee has to be accepted in the case of Mahabir Flour Mills Vs. Commissioner of Commercial Taxes and Another,

It is further submitted that "Tea Seed" has been specifically included in the list of exempted articles with effect from, April 1, 2000; only, to remove all ambiguities on the subject and she relied upon in the case of Indian Oil Corporation Ltd. Vs. Sate of Tamil Nadu, and submitted that subsequent legislation is also, to be taken into consideration for interpretation of an earlier provision. In view of the fact that it is submitted that; the writ petition should be dismissed.

After considering the facts and circumstances of this case and after analyzing the decision cited before us, we must come to the conclusion that it is a well-settled principle of law that taxing statute should always be construed strictly and in the event of any ambiguity the benefit would always go in favour of the Assessee. The. Taxing Authority is to act within four corners of the statute and not otherwise.

It is also well settled that in interpreting items in statute like Sales Tax Act etc. whose primary object is to raise revenue and for which purpose they classify diverse products, resort should be had not to the scientific and technical meaning of the terms or expressions used, but to their popular meaning, that is to say, the meaning attached to them by those dealing in them. If any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted See Indo International Industries Vs. Commissioner of Sales Tax, Uttar Pradesh, , Board of Revenue (Taxes), Ernakulam( Supra) v. K. Ummul Kulsu.

After considering all aspects of the matter and since we hold that the Learned Tribunal has correctly held that the "Camelia Seed", that is the Respondent No. 1, grows flowers but some others do no they grow tea bushes only for tea leaves. Therefore, the Learned Tribunal Correctly held that the Petitioner couldn''t burden the tax for using "Camelia Seed" for growing tea for other. Accordingly, the Learned Tribunal correctly came to the conclusion that the "Camelia Flower Seeds" come within the Entry No. 37 of Schedule - I of the Act of 1994. Therefore, we affirm the order so passed by the Learned Tribunal and dismiss this application.

For reasons stated hereinabove, this application is, thus, disposed of.

Let urgent Xerox certified copy of this order be given to the parties on the usual undertakings.