Commissioner Of Sales Tax, Mah. ... vs M/S. Mah. State Seeds Corp. Ltd., ...
2017 Latest Caselaw 438 Bom

             IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

                      NAGPUR BENCH : NAGPUR



Sales Tax Reference No. 69 of 1997



Applicant             :         Commissioner of Sales Tax, M. S. Mumbai

                               versus

Respondent            :        M/s Maharashtra State Seeds Corporation Limited,

Akola

Mr V. P. Maldhure, Asst. Govt. Pleader for applicant

Coram : B. P. Dharmadhikari & V. M. Deshpande, JJ

Dated : 3rd March 2016

Oral Judgment (Per B. P. Dharmadhikari, J)

1. The Commissioner of Sales Tax, Maharashtra State has made

reference of the following question to this Court under Section 61 (1) of the

Bombay Sales Tax Act, 1959 :

"Whether on the facts and circumstances of the case and on a true

and correct interpretation of the various entries specified in the

schedules appended to the Bombay Sales Tax Act, 1959, was the

tribunal justified in holding that sales of jute seeds were covered by

the scope of entry No. 22 of Schedule A prior to 30.6.1981 and also

covered by the scope of entry No. 8 of Schedule C-Part-I after

30.6.81 and not covered by the scope of residuary entry No. 22 of

Schedule-E (prior to 30.6.81) and entry No. 102 of Schedule C-Part

I ?"

2. Nobody appears for assessee. With the assistance of learned

Assistant Government Pleader, we have looked into the facts.

3. Respondent before us is the Maharashtra State Seeds Corporation

Limited, a statutory corporation having its Head Office at Akola. It deals in

processing, certification and sales of seeds such as, cotton seeds, cereal seeds,

jute seeds etc. mainly on wholesale basis. Here, we are concerned with

classification of jute seeds.

4. The period with which the reference is concerned is from 1.4.1981

to 31.3.1982, 1.4.1982 to 30.9.1983, 1.10.1983 to 30.9.1984 and 1.10.1984 to

30.9.1985.

5. During this period, the Corporation sought assessment of goods

wherein sale of jute seeds was also involved. The Corporation claimed that jute

seed is nothing but 'sann-hemp' seed and, therefore, tax free under Entry No. 23

of Schedule A till 30.6.1981. It further submitted that jute seeds were covered

by Entry No. 8 of Schedule C, Part-I and assessable to tax at 2 per cent only.

6. The Department, however, was of the view that jute seeds or tug

bee is not a 'sann-hemp' seed and, therefore, not covered by the said Entry. The

Department relied upon residuary entry no. 22 of Schedule E before 1.7.1981

and Entry No. 102 of Schedule C, Part-II thereafter. It claimed that the sales tax,

therefore, ought to have been assessed at 10 per cent. From facts, it appears

that penalty under Section 36 (3) or under Section 36 (2) (c), Explanation-I of

the Act was also levied upon the Corporation.

7. In this backdrop and in the light of question referred, we do not

find it necessary to record the contentions of learned Assistant Government

Pleader separately. Relevant Entry No. 22 in Schedule A in force upto 30 th June

1981 was as under :-

"22. Flower, fruit and vegetable seeds; seeds of lucerne and other

fodder grass; seeds of sann hemp; bulbs, corns, rhizomes, suckers

and tubers (other than edible tuberns); budgrafts, cuttings, grafts,

layers and seedlings; plants."

This Entry has been substituted later on and relevant Entry to be looked into is

Entry No. 8 in Schedule C which reads as under :-

"8. Fruit seeds and vegetables seeds (other than oil seeds,

Dhania, Methi and Suva), seeds of luccerne and other fodder

grass, seeds of the sann hemp; bulbs, corns, rhizomes; suckers

and tubers (other than edible tubers), bud grafts, cuttings,

grafts, layers, seedlings and plants."

Residuary Entry on which the Department has placed reliance, is Entry No. 102

in Schedule C, Part-II and that Entry reads as under :-

"102. All goods other than those specified from time to time in

the other Schedule and the preceding entries of this

Schedule ... 10 paise in the rupee

7A. Before proceeding further with discussion, learned Assistant

Government Pleader who has assisted the Court ably, has invited our attention

to Entry No. 7 in Schedule B to urge that jute seeds have been compared with

sunna or sannhemp extracted from plants of the species Crotalaria Juncea

whether baled or otherwise. Said Entry No. 7 of Schedule B reads as under :-

"7. Jute, that is to say, the fibre extracted from plants belonging

to the species Corhorus Capsularies and Corchorus oiltorius and

the fibre known as mesta or bimli extracted from plants of the

species Hibiscus connabinus and Hibiscus subdariffa Var altissima

and the fibre known as sunna or Sannhemp extracted from plants

of the species Crotalaria Juncea whether baled or otherwise.

.. four paise in the rupee four paise in the rupee"

8. With the assistance of learned Assistant Government Pleader, we

have perused assessment order and also later order. Assessment Officer has

gone in great details. The Assessment Officer has found, upon classification of

contents, that characteristics and ingredients of sann hemp seeds and jute seeds

are not similar and has consequently held that the jute seeds cannot be covered

under Entry No. 22 of Schedule A or Entry No. 8 in Schedule C. It is not in

dispute that this application of mind was accepted by the 1 st Appellate Authority

and it has been set aside by the 2 nd Appellate Authority i.e. Tribunal vide its

order dated 1st January 1992 in Second Appeal Nos. 922 of 1989 and 923 of

1989. The Maharashtra Sales Tax Tribunal remanded the matter back to the

Deputy Commissioner (Appeals) for further appropriate consideration. It is

thereafter that the present Reference has been made.

9. Perusal of various entries reproduced by us supra shows that Entry

No. 22 in Schedule A in force upto 30 th June 1981 speaks about flower, fruit

and vegetable seeds; seeds of lucerne and other fodder grass; seeds of sann

hemp; bulbs, corns, rhizomes, suckers and other tubers (other than edible

tuberns); gudgrafts, cuttings, grafts and the entries also include layers and

seedlings as also plants. In Entry No. 8 though number of items has changed,

entry about sann hemp seeds has remained intact. It can be seen that Entry No.

22 in force upto 30th June 1981 contained the word "flower". Later on that

word has been deleted and it does not find place in Entry No. 8. Subsequent

addition of certain species or genus is only by way of clarification and it does

not appear to narrow down the scope of opening words "fruit and vegetable

seeds".

10. Schedule B after 30th June 1981 specifies jute and further clarifies

that by the said word "jute", the fibre extracted from plants belonging to the

species like corhorus capsularies and corhorus oiltorius and the fibre known as

mesta or bimli extracted from plants of the species Hibiscus connabinus and

Hibiscus subdariffa Var altissima and the fibre known as sunna or Sannhemp

extracted from plants of the species Crotalaria Juncea whether baled or

otherwise, are included therein. Thus, all fibre which can be extracted from

various plants of different species are treated as "jute" in Entry No. 7 of

Schedule B. The plants of crotalaria juncea species also finds mention in Entry

No. 7. It is, therefore, obvious that fibre extracted from sunna or sannhemp is

jute for the purposes of Schedule B after 30th June 1981.

11. We are not concerned with extracted fibre, but with jute. However,

fibre extracted from sannhemp has been treated as jute. Similarity and anology

drawn by assessee based on this between sannhemp and seeds of jute or or tag

bee cannot be said to be arbitrary. The Tribunal appears to have rightly

accepted it. Findings in paragraph 10 of the order dated 1.1.1992 by the

Maharashtra Sales Tax Tribunal need to be approved.

12. Admittedly, there is no other entry in schedule which would cover

jute seed or any other fruit seeds. The Department, therefore, has fallen upon

residuary entry i.e. Entry No. 102 of Schedule C, Part-II. This entry speaks of all

goods other than those specified in other Schedules and the preceding entries of

that schedule. Therefore, by implication if seeds are dealt with specifically

earlier, it follows that seeds cannot be covered under residuary entry "goods".

Why jute seeds could be treated as "goods" and should not be accepted as

covered under Entry No. 8 of Schedule C, has not been demonstrated by the

Department.

13. The Assessment Officer has with some research prepared his order

to demonstrate that botanically, the jute seed cannot be compared with sann

hemp seed. Learned Assistant Government Pleader has also studied that

aspect. However, here we are not concerned with the technical or botanical

property of this specie or seed. The question is of common parlance and

understanding. We find that the issue has been addressed to properly by the

2nd Apellate Tribunal order dated 1.1.1992.

14. We, therefore, answer the Reference in the affirmative i.e. in favour

of respondent and against the Department. No costs.

        V. M. DESHPANDE, J                      B. P.  DHARMADHIKARI, J



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