Commissioner Of Sales Tax vs Kanji Mal & Sons
1991 Latest Caselaw 429 Del

JUDGMENT

Dalveer Bhandari, J.

(1) The Appellate Tribunal, Sales Tax, Delhi has referred for the opinion of this Court on following two questions : (I)Whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that 'jewellery' and 'orname

(2) The assessed is M/s Kanji Mal & Sons and the assessment year is 1969-70. The controversy pertains to the interpretation of the term 'ornaments'. as mentioned in Notification No. F. 4(87)/44-Fin. (E) (ii) dated 30.6.1966 issued by the Chief Commissioner under the Bengal Finance (Sales Tax) Act, 194 as extended to Delhi whereby gold ornaments were made excisable to sales tax at the rate of 2%.

(3) The Assessing Authority came to the conclusion that this term 'ornaments' has reference to those made of gold only. In case any stones, precious or otherwise are studded in ornaments, they, it was observed, can be treated as 'jewellery' and not 'ornaments'. In doing so, the Assessing Authority relied upon its earlier decision for the assessment year 1968-69. The assessing officer mentioned in his order that in the year 1968-69 assessed's sales were taxed at 5 per cent and appeal was rejected by the Assistant Commissioner hence the taxable sales shown by the dealer at 2 per cent will be taxed at the rate of 5 per cent.

(4) The controversy which arises in the instant case is rather narrow and number of High Courts had occasion to examine the same question. Brief facts necessary to appreciate the controversy involved in the case are set out as under. The assessed has registration certificate No. 3749 under the Bengal Finance (Sales Tax) Act, 1941 as extended to Union Territory of Del hi. In the assessment order for the assessment year 1969-70 the assessing Authority created additional demand of Rs. 6.709.70 (including penalty of Rs. 150.00 ). The order was challenged on the ground whether the assessing Authority was justified in taxing the sale of studded gold ornaments at the rate of 5 per cent (while they should have been taxed at the rate of 2 per cent). It was contended that the. penalty has also been wrongly imposed. In order to appreciate the real question involved in the case it is imperative for us to understand the meaning of 'jewellery' and whether it includes ornaments. We are also called upon to decide whether gold ornaments can be termed as 'jewellery' or ornaments can acquire the character of jewellery only when they are studded with precious stones ?

(5) Before answering the question we deem it appropriate to set out the dictionary meanings of words 'Ornaments' and 'Jewellery'.

(6) "ORNAMENT" has been defined in the Oxford English Dictionary, Volume-VII N-POY page 206 : "Ornament" means to adorn, deck, embellish, beautiy".

(7) The word 'Ornamental' has been defined in the same Dictionary as "adornments, embellishments, as opposed to essentials".

(8) The word "Ornament" has been defined in the New Webster's Dictionary of the English Language Deluxe Encyclopedic Edition page 668 as:- 'an object, detail etc. meant to add beauty to something to which it is attached or applied or of which it is a part- such objects, details etc." . 'Jewellery' : Jewellery has been defined in leading accredited dictionaries as under: 'Jewellery' as defined in the New Webster Dictionary of English Language, 1981 Edition page- 518 :- "Jewellery" : Articles made of gold, silver, precious stones, or similar materials for personal ornaments."

(10) In the Concise Ox ford Dictionary, 8th Edition 1990 page 636: 'Jewellery' has been defined as under : "Jewels or other ornamental objects especially for personal adornment, regarded collectively."

(11) In Words and Phrases Permanent Edition Volume 23 page-34, the word 'Jewellery' has been defined as under : "THE word 'Jewellery' is generally used as including articles of personal adornment, and the word imports that the articles are of value in the community where they are used. A belt of Cowry shells, a necklace' of bears, claws, head ornaments of sharks' teeth, though possessing no value in themselves, arc esteemed valuable in the communities where they are worn and, we, therefore, constantly find them referred to in books written in the English Language."

in Stroud's Judicial Dictionary (3) 5th Edition page 1366 the words "Jeweller's work" vis-a-vis the statute, Plate (Offences) Act, 1738, have been held to mean any gold or silver wherein any jewels or other stones are or shall be set.

(12) The word 'Jewellery' has been defined in the Random House Dictionary, unabridged edition page 767 the meaning of the word, "jewellery" is given as under : "1.a number of articles of gold, silver, precious stones, etc. for personal adornment. 2. any ornament for personal adornment, as a necklace cufflinks, etc. including those of base metals, glass, plastic, or the like."

(13) We are aware that dictionaries are not authoritative exponents of the terms used in a statute by Parliament. However, as Lord Coleridge said in R. v. Peters (1886) 16 Qbd 636, 641 (QB). "DICTIONORIES are not to be taken as authoritative exponents of the meanings of words used in Acts of Parliament, but it is a well- known rule of Courts of law that words should be taken to be used in their ordinary sense, and we are therefore, sent for instruction to these books. It is for the Courts to interpret the statute as best it may. In so doing, the Court may no doubt assist themselves in the discharge of their duty by any library help they can find, including of course the consultation of standard authors and reference to well-known authoritative dictionaries."

(14) Before deciding the controversy involved in the case We would like to examine cases decided by various Courts in the Unites States of America, United Kingdom and by our Indian Courts.

(15) Cases decided by Courts of the United States of America : Shaw, CJ. in Com v. Stephens, 14 Pick. (Mass)370: "HE said : "The question is whether plain gold earrings and knobs, without any precious stone, pearl, or other gem set in them, constitute jewelry." "Jewelry is not found in any English dictionary, and is probably an Americanism. It is defined in Webster to be jewels in general. He defines 'jewel' to be 'an ornament worn by ladies, 'a pendant in the ear.' It is manifest, however, that these are put by way of instances, and not intended as strict definitions. The . term 'bijou' which seems to be nearly analogous to it in the French language, is defined to be 'a little work of ornament, valuable (precieux) for its workmanship or by its material. The counsel on both sides cited passages of Scripture to show, on the one side, that the translators of the common version included ornaments of gold under the name of jewels, and on the other, to show that by a distinct enumeration they excluded them. These instances do little more than show that, though the argument founded on them is at first view plausible, it would be entirely unsafe to rely upon it as a ground of legal construction. Nor can much more reliance be placed upon lexicographers; they are necessarily confined, in a considerable degree, to generalities, and cannot ordinarily go into minute and very accurate distinctions. On the best consideration we have been able to give the subject, we are satisfied that the legislature, In the use of the word 'jewelry; intended to employ it as a generic term, of the largest import, including all articles under the genus. Without attempting to define the term used in the statute, we are all of opinion that earrings and ear-knobs are included under the term jewelry, as it was used in the statute."

(16) It would be interesting to see how the word 'Jewelry' has been defined in different connotations in the United States of America: "THE meaning of the word is most frequently drawn into question in cases involving the construction of statutes limiting the liability of innkeepers for money, jewelry, or valuables not deposited in the safe. In such a case it was said, "The watch, and pen and pencil case are certainly valuables, and perhaps might be called jewels, but I think should be considered a part of the traveller's personal clothing or apparel. Gile v. Libby, 36 Barb. (N.Y.) 70; Ramaley v. Leland, 43 N.Y. 539, 3 Am. Rep. 728; Bernstein v. Sweeny, 33 N.Y. Super. Ct. 271; but under a similar statute specifying money, jewelry, and articles of gold and silver manufacture, a gold watch was held to be included as an article of gold manufacture; Stewart v. Parsons, 24 Wis 241."

(17) The word 'Jewelry' has also been frequently used in the United States in Tariff laws : "THEmeaning of the Word is also frequently involved in cases arising under the tariff laws, which usually contain also the term "imitation jewelry". In such a case Lacombe, J; said : "The word jewelry is generally used as including articles of personal adornment, and the word further imports that the articles are of value in the community where they are used...... The articles of value used for personal adornment in our civilization are, and for centuries have been, the precious metals gold and silver, to which, I . think, Platina is now generally added, and what are known as the precious stones, the diamond, sapphire, ruby, etc." "There is such a thing as imitation jewelry......If by a pleasing combination of appropriate materials, by an attractive arrangements of parts, an article is produced bearing a general resemblance to real jewelry ornaments and suitable for similar uses, it may fairly be called imitation jewelry". Robbins v. Robertson, 38 Fed. 709".

(18) English Courts had also occasion to examine similar question of law.

(19) In the Whit by : Public Trustee v. Whitby 1944 (Chancery Division) 210, 213 Ca as per Lord Greene Mr : "THE first question arriving on this appeal is whether cut, but unmounted, diamonds fall within the word "Jewellery", or, if they do no not, whether they fall within the words "articles of personal of naments."Uthwatt J. held that they were not jewellery, but the. question whether they were "articles of personal ornament" was not argued before him. The definition of "jewellery" in the shorter Oxford dictionary-and for present purposes the definition in the larger dictionary is the same-is as follows: "Jeweller's "works, gems or ornaments made or sold by jewellers; jewels "collectively or as a form of adornment". From that definition it seems to me clear that in the ordinary use of English language the word "jewellery" would cover jewels collectively and gems sold by jewellers just as it covers jewels made up into articles of adornment such as a brooch, I cannot see any justification in this case for excluding from the meaning of the word that of jewels collectively or gems sold by jewellers. The word is wide enough to cover those things, and I see, no justification for cutting it down If the contrary view were taken some curious results might follow because a man might, as a hobby collect cut stones and make some if them up into articles of adornment. Would the question what stones passed by 8 gift of jewellery, in his will depend on his having made them up into a brooch or a bracelet ? It seems to me that would be to introduce a quite irrational distinction."

(20) A similar question arose for consideration before various High Courts. A division bench of the Orissa High Court in State of Orissa v. Jamula Srinangam, 1961 (VOL. XII) Sales Tax Cases 135 had clearly enunciated the meaning of the word "Jewellery" The Court mentioned as under : "THERE may be an ornament consisting of pure gold set with imitation stones, or made of imitation gold set with imitation stones. Though there might have been some doubt prior to the issue of the aforesaid notification, as to whether an ornament made of imitation gold and set with imitation stones was jewellery or not, that doubt was set at rest by the aforesaid notification. In the present case, it is admitted that the ornaments were made of pure gold though set with imitation stones. That would bring them within the dictionary meaning of the expression "jewellery".

(21) Similar question arose for the consideration before a division bench of the Allahabad High Court in Ganesh Lal & Sons v. Commissioner of Sales tax,UttarPradesh Lucknow Sales Tax Cases (Volume-XXVII) 1971 page 150 and the Court held as under : "THE term ornaments used in the notification in question is, in our opinion, comprehensive and would include ornaments of all kinds including jewellery studded with pearls or precious stones. The mere fact that jewellery studded with precious stones was subsequently taxed at a higher rate does not mean that jewellery was not covered by the term "ornaments" as used in the earlier notification. All that the State Government has done by the subsequent notification is to subject more costly ornaments at a higher rate leaving the cheaper quality 'of ornaments taxable at a lower rate as before. We do not find it possible to accept the contention that jewellery studded with pearls and precious stones was an unspecified item not covered by the term ornaments. We accordingly answer the question by saying that jewellery in which precious stones were studded with gold and silver would be covered by the term ornaments as used in the notification of 5th April, 1961, and would be taxable at the rate of 3 per cent and not as unspecified item at 2 per cent."

In the said case the Court relied and followed earlier division bench cases of the same high Courts. In Commissioner of Wealth-Tax, Gujarat Ii v. Mrs. Arundhati Balkrishna, 1968 (70) Itr 203 (Guj). The division bench categorically came to the conclusion that 'jewellery' includes ornaments. It would be interesting to note that against the judgment of the High Court, Commissioner Wealth- Tax filed an appeal before the Supreme Court. Supreme Court in the appeal as affirmed the judgment of the Gujarat High Court in the said case. The reference of the Supreme Court judgment is Commissioner of Wealth-Tax v Arundhati Balkrishna, 1970 (V-77) Itr 50).

(22) It would be relevant to mention that Gujarat High Court in Commissioner of Wealth Tax v. Jantillal Amratlal (1976) 102 Itr, 112-117 reiterated similar view.

 (23) Punjab and Haryana High Court in its judgment The Commissioner of Wealth Tax Patiala v. Rajeshwar Prashad (1974) Volume 76 the Punjab Law Reporter 479 has also taken the same view. The Court has observed as under:-    "It is not disputed that these ornaments are of gold and are meant for wearing on the person of the assessed. Therefore, they would fall within the ambit of the phrase "jewellery". No playing with words will take them out of that category."  

 It would be relevant to mention that Orissa High Court in Commissioner of Wealth-Tax v. Binapani Chakroborty  and Commissioner of Wealth Tax v. Smt. Sonal K. Amin (1981) 127 Itr 427 (MP) have taken a contrary view. These judgments are clearly distinguishable.   

 (24) The assessed is fortified by the judgment of a Division Bench of this Court in Commissioner of Wealth-Tax v. Smt. Savitri Devi (1983) 140 ITR-525 (Delhi) apart from the decision of Allahabad and Gujarat Hi(b Courts. The Division Bench of this Court has carefully considered various dictionary meanings of the word "Jewellery" and also considered a large number of cases. The Court observed :    "WE feel that the word "jewellery" as set out in the dictionaries as above noticed and as understood in common parlance, certainly includes gold ornaments. Gold ornaments made for personal use are almost always a jeweller's job and cannot be made by just anyone. A jewel itself is a costly ornament especially one made of gold, silver or precious stones. Precious stones are not a necessary ingredient to make a piece of jewellery. Exquisite filigree gold and silver jewellery is made in Orissa and other parts of the country and can certainly not be made by any other than an expert jeweller."  

 (25) A Division Bench of this Court has dealt in detail the meaning of the word jewellery as understood in common parlance in our country. In our opinion the entire matter has been approached in a correct prospective. The division bench has further observed :- ''    "The Hindi word for jewellery "Gehena" would certainly include such jewellery within its ambit. It is unthinkable that a fold "Champakali" or a "hanali" or a wedding ring is not jewellery just because it is not studded with stones. It would appear to us that there is nothing redundant or absurd in the Explanation being prospective. The terms of the Explanation cannot take away the ordinary meaning of the word "jewellery". In any case, the Explanation does not deal with gold ornaments only but also elucidates, inter alia, that even if fold ornaments, etc. are sewn into any wearing apparel they would be jewellery; this is certainly an extended meaning of the word and not one as used in common parlances. Similar is the position with regard to precious or semiprecious stones whether set in any furniture, utensil or other article or worked or sewn into any apparel or not. The artificially enlarged meaning as extended by the prospective definition provided for in Explanation I above mentioned also includes by way of abundant caution natural meaning of the term. It has apparently been included so that the common parlance meaning should not escape attention"  

 (26) We have considered the notification in issue; various meanings given by accredited dictionaries,' and judgments delivered by various Courts including the judgments of American and English Courts. This exercise was undertaken primarily to discern how these expressions 'Ornaments' and Jewellery' are understood in common parlance all over, and whether the meaning as commonly understood has been accepted by the judicial Courts.   

(27) In order to determine the controversy of this nature the real test is the understanding of the meaning by the public at large and the statement of law as declared by Courts. Generally, all legislations and governmental notifications are in the ultimate analysis a sum total of public opinion and expression. When the controversy as mentioned above is judged or determined on the basis of aforesaid parameters, the irresistable conclusion is the one -which has been arrived at by the Tribunal. We approve and affirm the decision of the Tribunal. The reference is answered accordingly. No order as to costs.