M/S Target Centre vs The Commissioner Commercial Tax ...
2019 Latest Caselaw 345 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Reserved on 20.2.2019
 
Delivered on 1.3.2019 
 

 
Chief Justice's Court
 
 
 
Case :- SALES/TRADE TAX REVISION No. - 244 of 2015
 
 
 
Applicant :- M/S Target Centre
 
Opposite Party :- The Commissioner Commercial Tax Lko.
 
Counsel for Applicant :- Pooja Talwar
 
Counsel for Opposite Party :- C.S.C.
 
 
 
Hon'ble Govind Mathur,Chief Justice
 
Hon'ble Saurabh Shyam Shamshery,J.

(Delivered by Hon'ble Govind Mathur, C.J.)

In a sales tax reference, a Single Bench of this Court in M/s Agarwal Brothers, Faizabad Versus Commissioner of Sales Tax, Uttar Pradesh reported in [1979 UPTC 1076] held that air-gun is capable to inflict bodily injuries, therefore, the same is covered by a Notification dated 23.03.1971 regarding arms and ammunitions.

The issue as to whether "air-gun" and "air-pistol" are to be taxed under entry 124 "Part A" of Schedule II as "toy excluding electronic toys" or has to be taxed "arms and ammunitions" vide entry 2 of Schedule IV came up in the instant sales/trade tax revision before a Single Bench of this Court. The Single Bench while considering the issue noticed in the judgment of this Court in M/s Agarwal Brothers, Faizabad (supra), the definition of term "arms" as prescribed under Section 2(c) of the Arms Act, 1959 (hereinafter referred to as "Act, 1959") and the judgments of Kerala High Court and Madhya Pradesh High Court on the same print.

The Kerala High Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) Versus K. Mohammed reported in [1989] 74 STC 210 while disagreeing the judgment of Allahabad High Court in the case of M/s Agarwal Brothers, Faizabad (supra) arrived at a conclusion that the phrase "arms and ammunition" will not cover air-guns and pellets.

The Madhya Pradesh High Court in Commissioner of Sales Tax, M.P. Versus Pilababu Vishwanath Rao, MCC No. 113 of 1986; decided on 01.03.1990 after taking note of judgment in M/s Agarwal Brothers, Faizabad (supra) held that the law laid down by Allahabad High Court in the case of M/s Agarwal Brothers, Faizabad (supra) is not correct.

Looking to the conflicting views and by taking into consideration the argument advanced on behalf of learned counsel for the revision-petitioner, learned Single Bench considered it appropriate to refer the matter for adjudication by a larger Bench with following questions:-

"(i) Whether the view taken by this Court in M/s Agarwal Brothers, Faizabad (supra) lays down the correct law ?

(ii) Whether 'air-gun' and 'air pistol' be treated an item covered by taxing entry 'arms and ammunition' occurring in IVth Schedule at serial No. 2 of the Act or would fall in the entry 'toys including electronic toys'?"

The argument advanced on behalf of the revision-petitioner is that air-gun and air-pistol are toys used to fix the target by the player for recreation and, as such, no tax can be legally charged as the entry falls under Sr. No. 51 of Schedule I of Uttar Pradesh Value Added Tax Act, 2008 (hereinafter referred to as "Act, 2008"). In alternative, it is submitted that air-gun and air-pistol at the most can be taxed at the rate of four per cent being falling within the category of "toys excluding electronic toys" as referred at Sr. No. 124, Part A, Schedule II appended with the Act, 2008. It is asserted that the law laid down in the case of M/s Agarwal Brothers, Faizabad (supra) does not lay down the correct law as the Court in that matter has not examined the purpose and use of designing and manufacturing air-guns and air-pistols. Ms. Pooja Talwar, learned counsel for the revision-petitioner, to substantiate the contention, heavily relied upon the judgments of the Kerala High Court and the Madhya Pradesh High Court referred in preceding paragraphs.

Per contra, Sri Manish Goyal, learned Additional Advocate General states that the terms "arms" and "ammunition" have not been defined under the Act, 2008, thus, it would be appropriate to accept their dictionary meaning, and, according to that, air-gun or air-pistol is a lethal weapon, hence, these are to be included with item referred at Sr. No. 2 Schedule IV appended to the Act, 2008. Learned Additional Advocate General has cited different dictionaries to substantiate the contention aforesaid.

Heard learned counsels and considered the issues referred to us from different angles.

The Act, 2008 is an act to provide for introducing Value Added System of taxation for the levy and collection of tax on sale or purchase of goods in the State of Uttar Pradesh and in matters connected therewith and incidental thereto. As per Section 4 of the Act, 2008, the tax, payable on sale of goods, shall be levied and paid on the taxable turnover of sale. The goods named or described in column (2) of Schedule II, at every point of sale and at the rate of four per cent. The goods named or described in column (2) of Schedule IV are subject to tax at the point of sale mentioned in column (3) and at the rate of tax mentioned in column (4) of Schedule against such goods. The applicable tax rate for Schedule IV for the goods shown in entry 2 Schedule IV is 21 per cent.

Neither the term "toy" nor "arms" and "ammunition" are defined under the Act, 2008. The term "arms" is defined under the Arms Act, 1959 and Section 2(c) as under:-

"2.(c) "arms" means articles of any description designed or adapted as weapons for offences, or defence, and includes firearms, sharp-edged and other deadly weapons, and parts of, and machinery for manufacturing arms, but does not include articles designed solely for domestic or agricultural uses such as a lathi or an ordinary walking stick and weapons incapable of being used otherwise than as toys or of being converted into serviceable weapons;"

No definition of "ammunition" is given even under the Act, 1959. At the threshold, we would like to state that the definition of "arms" as given under the Act, 1959 may be useful to examine the purpose and use of designing and manufacturing air-guns to a limited extent and that cannot be the sole criteria to determine nature of the article concern, in view of settled principle of interpretation given in one statute which is enacted with a specific object, purpose and scheme cannot be applied mechanically to another statute with different objects, purpose and scheme. The Arms Act, 1959 was enacted by the Parliament to regulate classification of arms by classifying the different equipment and items, which were declared as arms in colonial era under the Arms Act, 1878. The Act, 1878 was intended to disarm the entire country. The Parliament, after independence noticed that the Arms Act and the rules made thereunder, if allowed to be continued, it would be different for law abiding citizens to possess fire-arms for self-defence vis-a-vis terrorist, dacoits, dacoits gangs, anti-social and anti-national elements who are using those arms. The legislature also intended to bring out several sharp-edged items from the ambit of "arms" which are essentially domestic equipment. The object of the Act, 1959 being absolutely different than the Act, 2008, it would not be appropriate to accept the definition of arms given therein ipse dixit in the instant matter and it would also be appropriate to look into the definition of "air-gun", "air-pistol" and "pellet guns" as available in different dictionaries and the literature relevant.

In Words and Phrases Permanent Edition Volume 3, the term "air-gun" is as under:-

"N.Y.Sup. 2004. Paintball gun which used a carbon dioxide (CO2) cartridge was an "air-gun" within meaning of Penal Law provision prohibiting possession of air-guns by persons under 16 and city code provision prohibiting the possession of an air pistol or air rifle except at a licensed amusement facility."

The definition referred above would not be of much assistance in view of the fact that, in our country, there is no need of having any license to possess air-gun even by a minor.

The term "air-gun" is described in the New Encyclopedia Britannica Volume I as under :-

"air gun, weapon based on the principle of the primitive blowgun that shoots bullet, pellets, or darts by expansion of compressed air.

Most modern air guns are inexpensive BB guns (named for the size of the shot fired). The best of these develop about half the muzzle velocity of light firearms, are accurate enough for marksmanship training at ranges up to 100 feet (30 metres), and can kill small game. Darts with tranquilizing drugs may be fired to immobilize animals for handling or capture. An air gun projectile seldom carries beyond 100 yards (90 metres).

Gas guns are comparable in power and accuracy to air guns but are powered by a reservoir or cartridge of liquid carbon dioxide, of which a portion escapes as an expanding gas when the trigger is pulled. Major ref. 8:501d shooting competition event and rules 16:707c.

This definition too would not be of much use as that discloses mechanics of the air-gun but not the purpose and use for its designing and manufacturing and further as to whether that can be treated as a toy or weapon.

The air-guns and compressed air-guns are described in more detail in the New Encyclopedia Britannica in volume 8 and, according to that, the guns resembles fire-arms but using compressed air to project either a single bullet or a charge of shot relating to short distances. The pellet of air-gun that hits soft tissues of a human being, such as eyes, can cause tragic results. The description given above is certainly useful to the extent to arrive at a conclusion that a pellet projected from air-gun may cause dangerous injuries if not used cautiously or if shot intentionally to cause injury at certain parts.

The literature of Air Weapon fatalities authored by C M Milroy, J C Clark, N Carter, G Rutty and N Rooney downloaded from -jcp.bmj.com- provides more effective details relating to air-guns, air-pistols and compressed air weapons. In the literature aforesaid, it is concluded that damage that air-weapons cause a frequently underestimated and they should not be thought of as toys. Children should not be allowed access to guns without full supervision by responsible adults. While arriving at the conclusion aforesaid, the authors examined mechanism and use of air weapons in detail. The discussion made in the literature aforesaid deserves to be quoted and that is as follows:-

"Much has been published on the effects of air-gun pellets penetrating sensitive organs, particularly the eyes but fewer fatal cases have been reported.

In the United Kingdom, to be lawful an air weapon should propel a pellet with an energy of less than 12 ft lb (16.3 J). In seven fatal cases quoted by Warlow, all had energy values below the legal limits, and three of the victims were adults. In comparison, .22 rimfire cartridges, which are a relatively low velocity powder charged cartridge but of the same calibre as many air powered weapons, have much higher energy values (27 to 111 ft lb) with velocities between 650 ft/s (198.2 m/s) and 1710 ft/s (521.2 m/s).

On test firing, one type of American air powered weapon, the Sheridan air rifle, was found to have a range of approximately 340 yards (310 metres). This weapon is designed to fire a .20 Sheridan pellet. In carrying out test firing on sections of beef rib with average thickness of 3-4 mm, the pellets discharged from this weapon did not penetrate. Most pellets that are fired in the United Kingdom are the diabolo waisted type, although pellets of similar design to the Sheridan .20 pellet may be encountered, such as the "rabbit magnum" for .22 calibre weapons. This ammunition is heavier than waisted pellets, being on average just under 2 g (average 1.96 g). Pellets with a plastic coat and aluminium core are also encountered.

The vast majority of fatal cases reported have been with weapons that would be legal in the United Kingdom. However, guns can be modified, increasing the velocity of the pellet. In the case of Buchanan, the regular oiling of the barrel was felt to have produced the effect of "dieseling," where the addition of oil or diesel fuel is used so that it spontaneously ignites and increases muzzle velocity. We have also encountered a fatal case where an air rifle was modified and used with home made powder ammunition, turning the gun into a home made firearm, or so called "zip" gun.

The majority of fatal incidents reported have involved children under the age of 16, with boys outnumbering girls. The head is the most common part of the body penetrated. The entrance site may be through the eye, the temple, or the forehead, with the pellet then penetrating the brain. Pellets penetrating the chest have killed by penetrating the heart. In one case the pellet penetrated the aorta, the child dying after five days of monitoring. At necropsy the pellet was found to have transfixed the intrapericardial aorta. In adults the thicker skull makes the temple and the eye the only sites that can be penetrated by an airgun pellet fired from a normal gun. The abdomen may also be penetrated.

In the investigation of a possible airgun death, the presence of the pellet may have been identified radiologically. Computed tomography has often been performed, as in two cases in this series, and the pellet or its fragments can be located. Airgun pellets do not exit the body, so should always be identifiable whole, or in fragments. These can be examined ballistically like other bullets, and should be retained. With a .22 weapon, the entrance wound will characteristically be approximately 0.5 cm in diameter. There may be a small rim of abrasion, but powder burning will not be present, as it would be in a rimfire .22 rifled weapon fired at close range. No skin splitting was seen in these cases, as is seen in firearms, particularly in contact head wounds where discharged muzzle gases tear the skin. If the weapon has been placed against the skin an impression of the muzzle of the gun may be left, as in two cases in this series. The muzzle impression may vary but if the gun is available it should be compared with the wound appearance. If there are any suspicious circumstances the death should be investigated by a forensic pathologist.

The airgun should be examined by a ballistics expert to determine its muzzle energy and the trigger pressure. The trigger pressure may give an indication of the likelihood of an accidental discharge. Most air rifles have trigger pulls of between 3 and 7 lb (1.4 to 3.2 kg), although in more expensive target guns which have adjustable pulls it can be less.

Non-fatal injuries following airgun pellet penetration include significant brain damage leaving permanent impairment. Those involving damage to eyes may result in blindness. In a study from Canada, 60% of all eye enucleations were due to trauma, with 25% of all enucleations for trauma being the result of airgun pellet injury. In one case complete blindness followed the development of sympathetic ophthalmitis in the other eye. Penetration into the chest or abdomen may require surgical intervention. Airgun pellets, like other projectiles, may undergo embolisation. Retention of the airgun pellet may be associated with long term problems, as in the fatal case of cerebral abscess reported by Shaw and Galbraith, the abscess developing around a pellet and causing death 19 months later when it ruptured. A retained airgun pellet may raise concerns about lead poisoning. Of 11 cases of retained orbital pellets described by Jacobs and Morgan, none had a raised serum lead concentration and it seems unlikely there is a significant risk of lead poisoning from a retained airgun pellet. Children are the most frequent victims of airgun injuries and fatalities, and boys far outnumber girls in all the reported fatal and non-fatal cases. Lack of appropriate supervision is a common feature, as the assailant is most often another child.

Of the five cases presented here, two were suicides and the other three accidents. Accidents far outweigh other reasons for injury and death. However, deliberately inflicted injury does occur, as evidenced by the case of Green and Good and one of the cases reported by DiMaio, where the deaths were considered homicides. Airguns as a weapon of suicide are unusual, but cases have been recorded, as well as unsuccessful attempts. The adult skull is vulnerable to penetration by airgun pellets, and if the temple region is chosen as the entry site, suicide may be achieved. In the case of Jacob and colleagues, the temple was the site of entry, as was one of the cases of suicide in this series. The chest is also a potential site for suicide as illustrated by our last case. In the self inflicted injuries in our series, a muzzle impression was left by the weapon, indicating a contact wound. In the suicide reported by Cohle et al, three pellets were fired with one penetrating into the occipital lobe. The victim also shot himself with a 12 bore shotgun in the chest, presumably because the airgun wounds did not produce the desired effect.

Air powered weapons are readily available in the United Kingdom, being purchasable without a licence. An estimated four million weapons are present in households in the United Kingdom. The damage that air weapons cause is frequently underestimated and they should not be thought of as toys. Children should not be allowed access to guns without full supervision by responsible adults."

In a case report "Air Gun - A Deadly Toy?" authored by F S Kuligod, Prasanna S Jirli and Pradeep Kumar, Officers of the Department of Forensic Medicine, K.L.E. Society's Jawaharlal Nehru Medical College, Belgaum, Karnataka introduced air-gun as under:-

"Many people fantasize about handling guns. They try to make it come true by playing with air guns (air rifles) at funfairs by target shooting, or bird hunting in the fields. As there is no age restriction in most countries to have or handle air guns, they are easily accessible to children who, due to their ignorance, handle them inappropriately.

The air gun is a simple yet ingenious and effective weapon based on fundamental mechanics. The gun primarily employs a very stiff compression spring to transmit momentum to a light pellet. Here, a very clever method of transmitting energy to the pellet is used. It is not by collision but using the dynamics of compressed air. Most modern air guns are inexpensive BB guns (named for the size of the shot fired) (DiMaio, 1985). The best of these employ about half the muzzle velocity of a light firearm, are accurate enough for marksmanship training at ranges up to 40 metres and can cause serious injuries (Reddy, 2003)

An air rifle is distinguished from an air gun as the former is a rifled weapon and the latter is a smooth bore. Air pistols may be either rifled or smooth bore. The weight of an air weapon pellet is concentrated in the head; with a hollow body. Its centre of gravity is well forward from the mid point. Hence, these slugs are not subject to the tendency of tumbling. This is an important factor in a projectile of low energy contributing to its capability to penetrate a target (Ravindra,1999).

There are three basic power systems for air-powered guns. They are pneumatic type, spring air compression system, and gas compression type (Di Maio, 1985). Death from an air-powered gun is rare. A review of English language literature reveals only a few deaths. Most involved children (Green, 1982). In most of the cases the point of entry was in the head."

The authors after examining applicable mechanism design and use of air-guns concluded as follows:-

"Air guns, although considered as toys, can cause injuries ranging from trivial to fatal. The type and severity of injuries depend on the type of air gun used, the range at which it is fired, and the anatomical site at which the pellet hits. A fair degree of comparison between injuries by hand guns and air guns can be made by careful examination of the entry wound. Lack of care, supervision and unstructured use are the risk factors contributing to the incidence of fatal injury from air guns. Even in developing countries proper laws should be enforced regarding the sale and use of air guns."

In an article "Analysis of glass fracture pattern made by .177" (4.5 mm) caliber air rifle" authored by Abhimanyu Harshey, Ankit Srivastava, Vijay Kumar Yadav, Kriti Nigam, Amit Kumar and Tanurup Das published in Egyptian Journal of Forensic Sciences, the air-gun is described as a small arm that hurts projectiles by means of mechanically pressurizing air and other means which involves no chemical reaction. All air weapons such as rifle and pistol generally propel metallic projectile. These guns have action mechanism, i.e., strong pistol pneumatic and compressed gas. The authors concluded that the use of air-guns in criminal activities is having a rising trend and that is an alarm to the law enforcement agencies.

The literature referred above discloses that the air-guns or the air-pistols or the other air pressure weapons which may cause serious bodily injuries are not toys. In conclusion, the Experts also advised to have effective norms may those by having statutory enactment for use of air-guns, air-pistols or other air pressure weapons.

In the case of M/s Agarwal Brothers, Faizabad (supra), it was held that air-gun is a weapon in which compressed air is used for propelling a lead pellet, the velocity of the pellet depends upon the air pressure released from the compressor chamber of gun. Although most of the air-gun are not lethal, in the sense that projectiles fired through them is not capable of killing human being, yet it is capable of inflicting bodily injuries. The nature of air-gun appears to have been taken by the Court in the case aforesaid on basis of the mechanism applied in the air-pistols and air-guns.

While relying upon the judgment in the case of Commissioner of Sales Tax, Uttar Pradesh Versus M/s Madan Sons, Dehradun reported in 1978 UPTC 676, the Court in this case also accepted that the word "arms" means a weapon, which is capable of inflicting bodily injury. Air-guns being capable of doing so falls within the category of "arms".

The Kerala High Court while dissenting the conclusion arrived in the case of M/s Agarwal Brothers, Faizabad (supra) noticed that all implements which can inflict injury cannot be characterized as arms.

The Court observed that in a taxing statute, the word must have to be used according to its ordinary meaning in common parlance. According to the popular sense and on going through the other material available, the Court held that "arms" and "ammunition" will not take air-guns and pellets in its ambit.

The Madhya Pradesh High Court in Commissioner of Sales Tax, M.P. Versus Pilababu Vishwanath Rao (supra) accepted the reasoning given in the case of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) Versus K. Mohammed (supra).

A Division Bench of Delhi High Court in People for Animals Versus Union of India and others reported in 2011 SCC Online Del 2359 dealt with the entire issue in detail and held as under:-

"An air gun/ air rifle/ air pistols uses the energy or force produced from compressed air or other gas for discharging of the pellet or projectile. Normally these air guns, etc. use metal projectiles and the ones which use plastic projectiles are Air (soft) Guns. General internet search on air guns reveals that these are distinguished from firearms, which burn a propellant in order to shoot the projectile but under the definition of firearms, as provided under the Act and as extracted above, it is clear that the air guns/ air rifles/ air pistols are also covered, for not only the arms which discharge projectile(s) by action of any explosive are covered under the definition, but also arms which use other forms of energy, in this case being the energy or force generated from compressed air or gas. Thus, it is safe to conclude that air guns/air rifles/air pistols are not mere toys, as against the assertion of the Respondents and they are very much subject to the provisions of the Act, being firearms. "

In Ravinder Versus State (NCT of Delhi) reported in 2016 SCC Online Del 3575, a Single Bench of Delhi High Court while considering the argument that an air-gun is not a deadly weapon, thus, does not attract Section 397 I.P.C., concluded that an air-gun or air-pistol uses energy and force produced from compressed air or other gas for discharging of the pellet or projectile and can cause hurt, as such, would fall within the definition of a deadly weapon.

The judgment cited above and the literature referred, in quite unambiguous terms, discloses that an air-gun or the air-pistol is certainly not a toy. The purpose of designing, manufacturing and using a toy is recreation, amusement and enjoyment generally and mainly by kids. The air-gun is certainly not an article for such usual recreation, amusement and enjoyment. It is an item which resembles to a fire-arm and operates with high pressure air. The pellet generally used in it is a metallic and this projectile may hurt the subject and that may be quite serious in certain eventualities.

On going through the entire literature available and the judgments referred by different High Courts, we are having no hesitation in stating that the air-guns or air-pistols are not simple toys or a pure sports equipment. These guns though are not fire-arm but are capable of causing bodily injuries and those in certain circumstances can be fatal too. These guns/pistols are also frequently used for hunting purposes. Looking to the mechanism used in these equipments, Experts have advised cautious use of these articles. In popular sense too, the air-guns are not understood as sports equipment but as a gun frequently used for hunting birds and other small animals. True it is, there is no need to have license to possess an air-gun but merely, on that count, it cannot be brought out from the term "arms". There may be several other articles too which are deadly weapon and falls within the definition of "arms" but there is no need to have license to possess those. It would also be appropriate to state that several Experts have also opined to make it mandatory to have a license for keeping air-gun/pistol.

The Kerala High Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) Versus K. Mohammed (supra) did not examine complete mechanism of the air-gun and just on basis of its capable use in popular sense held that though air-gun can cause injury but would not be an item covered under the entry "arms and ammunition".

We are of considered opinion that being not a toy and being an equipment that can be used to cause a lethal injury, which is also in use for causing bodily injuries and also being required to be used with all necessary caution and also being advised to be used under supervision of Expert and also being having absolute resembles that of fire-arm and also having a mechanism of spreading the projectiles with force that may cause hurt, the air-gun/air-pistol is an arm and, therefore, it is required to be considered as an item under entry 2 Schedule IV appended with the Act, 2008.

Accordingly, the questions referred to us by learned Single Bench are answered in the terms that the law laid down by this Court in M/s Agarwal Brothers, Faizabad Versus Commissioner of Sales Tax, Uttar Pradesh reported in [1979 UPTC 1076] is a good law and air-gun/air-pistol does not fall in the entry "toy excluding electronic toys". The air-gun/air-pistol is an item covered by taxing entry "arms and ammunition" occurring in Schedule IV at Sr. No. 2 of the Act, 2008.

After answering the reference, we could have remanded this revision petition for its adjudication by learned Single Bench but looking to the fact that, on merits, we have considered the entire issue involved, we deem it appropriate to dismiss this revision petition too.

Order Date :- 1.3.2019/Shubham

(Saurabh Shyam Shamshery, J.)     (Govind Mathur, C.J.)