The Commissioner, Commercial ... vs S/S Forever Living Imports (I) ...
2017 Latest Caselaw 4680 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R
 
RESERVED
 
Court No. - 30
 

 
Case :- SALES/TRADE TAX REVISION No. - 225 of 2017
 

 
Applicant :- The Commissioner, Commercial Tax, U.P. Lucknow
 
Opposite Party :- S/S Forever Living Imports (I) Pvt. Ltd. Meerut
 
Counsel for Applicant :- Bipin Kumar Pandey
 
Counsel for Opposite Party :- Shubham Agrawal
 

 

 
Hon'ble Suneet Kumar,J.

Heard Sri B.K. Pandey, learned counsel appearing for the Revenue and Sri Bharat Ji Agrawal, Senior Counsel, assisted by Sri Shubham Agrawal and Ms. Sanyukta Singh, learned counsel for the opposite party.

The instant revision arises from the judgment and order dated 12 August 2016 passed by the Commercial Tax Tribunal, Meerut Bench-II, Meerut, in Appeal No. 27/2016 (2012-13), under Section 28(2) of Uttar Pradesh Value Added Tax Act, 2008 (In short 'Act).

The opposite party, a dealer, engaged in the business of purchase and sale of cosmetic and toilet preparation and aloe vera products, etc. Assessing authority assessed aloe vera juice as an unclassified item, consequently, imposed higher rate of tax. Aggrieved, dealer preferred appeal. The first appellate authority vide order dated 29 October 2015 allowed the appeal which was duly affirmed in second appeal by the Tribunal, returning a concurrent finding that aloe vera juice falls within the category of preserved vegetable, therefore, would be covered under Entry 103 of Schedule-II.

The question involved in the present revision is whether aloe vera juice is covered by the expression "processed or preserved vegetable"

under Entry 103 of Schedule-II of U.P. Value Added Tax Act or an unclassified item.

Entry 103 of Schedule-II is extracted:

"103. Processed or preserved vegetables & fruits including fruit jams, jelly, pickle, fruit squash, paste, fruit drink & fruit juice (whether in sealed containers or otherwise)."

Tribunal in the impugned order considering and upon taking note of similar entry in tax laws of various States, including, Mizoram, Delhi, Punjab, Jharkhand, Jammu and Kashmir were expression "preserved vegetable" has been used, and upon considering the dictionary meaning and recipe of certain well known chefs came to form an opinion that aloe vera is used as processed or preserved vegetable in the form of juice/jelly/pulp, therefore, would be covered under Entry 103.

According to Oxford dictionary, vegetable would mean "A plant or part of a plant used as food, such as a cabbage, potato, turnip, or bean. ''fresh fruit and vegetables'."

It is not in dispute that dealer is selling its products including processed vegetable/aloe vera juice in various States. Entry 82 of Part-C of Schedule-II of Mizoram Value Added Tax Act, 2005, reads as follows:

"All processed fruits, vegetables including fruit jams, jelly, pickles, fruit squash, paste, fruit drinks and fruit juice whether is sealed containers or otherwise."

Upon specific query, Government of Mizoram vide communication dated 12 August 2011 clarified that aloe vera jelly/aloe vera juice would be covered under the aforesaid entry, accordingly, would be charged at 4%. Similar is the entry of other States, noted by the Tribunal, where aloe vera juice or jelly has been included within the category by the taxing authorities. It is also not in dispute that since 2007-08 till the passing of the assessment order dealer was charged at the rate applicable to the products classified under Entry 103, including aloe vera juice. However, subsequently, assessing authority has taken a somersault assessing aloe vera juice as unclassified item, thus, deviating from the consistent practice in the past.

Learned Tribunal upon placing reliance on decisions of the Supreme Court and High Courts came to a conclusion that aloe vera juice/jelly is sold as processed vegetable or vegetable juice concluding: (i) aloe vera jelly is a processed vegetable;(ii) aloe vera can be processed only in juice form, even in juice form aloe vera gel would still be processed vegetable; (iii) aloe vera juice is not specifically excluded from processed vegetable or vegetable juice. Merely, the expression vegetable juice or aloe vera juice has not been mentioned in the entry would not mean that it is not a processed vegetable;(iv) aloe vera leaves upon being subjected to various process would remain and retain its character as vegetable. Mere addition of preservatives or changing the shape will not change its identity, therefore, concluded that processed form of aloe vera pulp as jelly or juice would fall within the expression "processed vegetables", under Entry 103.

Learned counsel for the Revenue would submit that "vegetable" has to be understood as used in common parlance in the State of U.P., therefore, would urge that Entry in hindi language reads "processed sabjiyan" to contend that vegetables as understood in common parlance would not include aloe vera leaves for the reason that aloe vera is not sold and purchased as a vegetable in the State.

In support of his submission, reliance has been placed on the decision rendered in Ramavatar Budhaiprasad Etc. Versus Assistant Sale Tax Officer, Akola1, to contend that the Court while considering whether betel leaves would be covered within the expression "green vegetable" was of the view that the word "vegetable" must be construed not in any technical sense nor from botanical point of view but as understood in common parlance. It must be understood in its popular sense meaning, that sense which people conversant with the subject matter with which the statute is dealing would attribute to it. The court observed as follows:

"Therefore, apart from the fact that the legislature by using two distinct and different items i.e. item 6 "vegetable" and item No. 36 "betel leaves" has indicated its intention, decided cases also show that the word "vegetables" in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetables which are grown in a kitchen garden or in a farm and are used for the table."

Reliance was placed on Commissioner of Trade Tax, U.P. Versus Associated Distributors Ltd.2, wherein, Supreme Court held that the official language of U.P. is Hindi, therefore, if any difference is found in construing notifications in Hindi and English, notification issued in Hindi will apply.

Learned counsel for the Revenue would urge that Hindi version of Entry 103 refers to the expression "Sabji" it would mean vegetables used and understood by the people of the State in common parlance and language. Aloe vera leaf is neither referred to as "Sabji" nor sold in the vegetable market.

Similarly, reliance was placed on M/S Pappu Sweets & Biscuits, etc. Versus Commissioner of Trade Tax, U.P.3, to contend that the word used in the provision, imposing taxes or granting exemption should be understood in the same way for which they are understood in ordinary parlance in the area in which the law is in force or by the people who ordinarily deal with them. Therefore, the High Court should apply the context of popular parlance as understood in the country and more particularly in the State of Uttar Pradesh.

In State of West Bengal Versus Washi Ahmed4, the Supreme Court held thus:

"The word 'vegetables' in item 6 of Schedule I to the Act must be construed as understood in common parlance and it must be given its popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it' and, so construed, it denotes those classes of vegetables which are grown in a kitchen garden or in a farm and are used for the table. Green ginger is generally regarded as included within the meaning of the word 'vegetable' as understood in common parlance."

In rebuttal learned counsel for the opposite party would place reliance on the decision rendered in Mauri Yeast India Pvt. Ltd. Versus State of U.P. and another5, to contend that while dealing with the question whether yeast is a "chemical" within the meaning of the entry in question. The Court observed that it is now a well-settled principle of law that in interpreting different entries, attempts shall be made to find out as to whether the same answers the description of the contents of the basic entry and only in the event it is not possible to do so, recourse to the residuary entry should be taken by way of last resort. The Court was of the opinion that the entry in question is of wide import and takes within its purview chemicals of all kinds and does not make any distinction between an inorganic chemical and an organic chemical. It is now well-settled principle of law that when two views are possible, one which favours the assessee should be adopted. (Refer: Bihar State Electricity Board Versus Usha Martin Industries6)

Supreme Court and this Court has consistently taken the view, that in determining the meaning or connotation of words and expressions describing an article in a tariff schedule, one principle which is fairly well settled is that those words and expressions should be construed in the sense in which they are understood in the trade, by the dealer and the consumer. The reason is that it is they who are concerned with it and, it is the sense in which they understand it which constitutes the definitive index of the legislative intention.

There cannot be any quarrel with the proposition of law that construction of the word is to be adopted to the fitness of the matter of the statute. The trade or commercial meaning or the end user context would, thus, be a relevant factor. If there is a conflict between two entries one leading to an opinion that it comes within the purview of the tariff entry and another the residuary entry, the former should be preferred.

The case of the Revenue is not as to whether aloe vera is a vegetable or "Sabji" but aloe vera juice is not "fruit juice" nor covered under the expression "processed or preserved vegetables".

Learned Tribunal noted in the impugned order that aloe vera is sold across the State as aloe vera juice/jelly which is a preserved vegetable. Tribunal upon considering similar entry of taxation statues of various States opined that aloe vera juice has been interpreted consistently as a "preserved vegetable" and accordingly taxed.

It is settled principle of law that if an entry had been interpreted consistently in a particular manner for several assessment years, then in that event it is not permissible for the Revenue to depart therefrom, unless there is any material change. (Refer: Bharat Sanchar Nigam Ltd. and another Versus Union of India and others7)

It is not disputed by the Revenue that aloe vera juice is being sold by the dealer at lower rate of tax since 2007-08 and even after the enactment of the U.P. Value Added Tax Act, 2008.

In my opinion, Tribunal was justified in holding that the entry "processed vegetable" is of wide amplitude and would within its ambit include aloe vera juice which can only be sold upon being processed. I am unable to persuade myself to take view contrary to the view taken by the first and second appellate authority.

The question of law, therefore, is answered in favour of the dealer and against the Revenue.

The revision being devoid of merit is accordingly dismissed.

Order Date :- 20.09.2017

K.K. Maurya