Y. Aswathanarayana And Others v. The Deputy Commercial Tax Officer, Kadiri, And Others

1. The question which must be essentially answered in this enquiry is whether the word "miller" used in column (2) of item 3-C in Schedule IV of the Andhra Pradesh General Sales Tax Act, 1957, introduced in accordance with the Amendment Act 26 of 1961, means only the oil miller or takes within its meaning a decorticating miller also.

2. The facts are short and simple and are not at. all in dispute. The petitioners in this batch of writs are dealers in groundnut. They decorticate in their mills the groundnut and sell the kernel to dealers both within and without the State. These petitions urge that after the Amending Act 26 of 1961 the word "miller" used in the abovesaid provision means only an oil miller who crushes the kernel of groundnut and produces oil. That provision does not take within its meaning a decorticating miller.

3. In order to appreciate the merits of this contention it is necessary to mention the antecedents of this provision. Under the Madras General Sales Tax Act groundnuts were taxed at multiple points. Every purchaser was liable to pay the tax. After the Andhra Pradesh General Sales Tax Act, 1957, was passed, single point levy was introduced and the point of levy was the first purchase within the State. The Amending Act 26 of 1959 changed the point of taxation and declared that it is the last purchaser in the State who would be liable to pay the tax. This amendment came into force on 1st May, 1959. This clause was again amended by the Second Amending Act 26 of 1961 whereby item 3-C in column (2) of Schedule IV was amended. The clause as it now stands is in the following terms :-

When purchased by a miller in the State, at the point of purchase by the miller and in all other cases at the point of purchase by the last dealer who buys it in the State.

4. This Amending Act came into force on 1st October, 1961.

5. The contention of Mr. Reddy Pantulu, the learned counsel for the petitioners, as well as of Mr. Ramakrishnaiah, for some of the petitioners, is that the petitioners do not come under the term "miller". The process consists of mainly removing the husk and converting the groundnut into kernel and that the petitioners do not in their factories change the kernel into oil. It is their contention that they are not millers. This argument is based on a further submission that inasmuch as "groundnuts" include "kernel", and as the process adopted in their mills does not convert or alter the commodity into a new commodity, in other words, as their mills do not "manufacture" groundnuts into kernel, their factories cannot be considered as mills and their proprietors cannot be called as millers. In support of this contention reliance was placed on Shaw Bros, and Co. v. State of West Bengal [1963] 14 S.T.C. 878 We also referred to the dictionary meaning of the word "mill". It is no doubt true that in finding the meaning of words in the Constitution and Statutes, judges make some use of the layman's crutch-the dictionary. Yet, the value of the dictionaries must be considered limited by the fact that in English, as in any living language, the meanings of words are in steady process of change. As an authority on meanings, the dictionary is a man-made institution without pretence of guidance by a higher power, or by a basic substratum of natural law, or even by superior Wisdom, to all of which jurists sometimes lay claim. "Why should we follow the dictionary ?" Justice Homes is said to have remarked once to his brethren, "let the dictionary follow us."

6. The word "miller" is not a word of art. It has not been defined in the Act. It has therefore to be understood in the context in which it is used keeping in view the legislative history and also the ordinary meaning which a common man attributes to it. In Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 S.T.C. 286 the Supreme Court laid down the broad principles of construction in such cases. Their Lordships observed at page 288 :-

Reliance was placed on the dictionary meaning of the word 'vegetable' as given in Shorter Oxford Dictionary where the word is denned as 'of or pertaining to, comprised or consisting of, or derived, or obtained from plants or their parts.' But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been denned in the Act and being a word of every day use it must be construed in its popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it.' It is to be construed as understood in common language.

7. The aid from the dictionary might in some cases be useful, but as stated above, as the meanings of words undergo constant changes, the dictionary cannot be considered as definite guidance in all such cases(2).

8. Even according to the dictionary meaning we do not think that the word "miller" appearing in the provision under consideration can by any stretch of imagination mean only the "oil miller" and would not take in the "decorticating miller". There is no warrant in the Act for any such construction. On the other hand, legislative history to which we would presently make a reference, and the context in which the word "miller" is used, undoubtedly indicate that the word "miller" covers both "decorticating miller" as well as "oil miller". In the Concise Oxford Dictionary "mill" has been also given a meaning as "any machine or building fitted with machinery, for manufacturing processes etc., as saw, cotton, silk."

9. In Chambers Twentieth Century Dictionary the following meaning is given :

A machine for grinding by crushing between hard rough surfaces, or for more or less similar operations : a building or factory where corn is ground, or "manufacture" of some kind is carried on, as spinning and weaving, paper-making, sawing of timber.

10. The Law Lexicon of British India by P.R. Aiyar makes a particular note of the fact that the word "mill" is now extended to engines or machines moved by water, or steam, for carrying on many other purposes, and referring to Webster, defines the word "mill" as "a complicated engine or machine for grinding and reducing to small particles grain, fruit, or other substance, or for performing other operations by means of wheels and a circular motion, as a grist-mill for grain, a coffee mill, a cider mill, a barkmill." It also makes a mention that "the original purpose of mills was to grind grain for food and in this sense it has been defined as a machine for grinding any substance as grain, by rubbing and crushing it between two hard, rough, or indented surfaces. But in modern usage, the term 'mill' includes various other machines or combinations of machinery, such as sawmills, cotton-mills etc., etc." It concludes : "The term 'mill' is used to denote the building or collection of buildings with machinery by which the processes of manufacturing are carried on.

11. Stroud's Judicial Dictionary also states :

"The essential of a mill is a process carried on by machinery by which the material subjected to it is made suitable for further treatment in a factory or another mill or for use."

12. Roland Burrows, K.C. in his ''Words and Phrases Judicially Defined" referring to Inland Revenue v. Leith Harbour & Docks Commissioners (1942) S.C. 101 states :

It is enough to inquire whether...the elevators perform a process or processes upon grain analogous to the processes performed upon other materials in what are undoubtedly mills. I think that they do. They do not merely take in grain in bulk, and discharge it in bulk. In addition to this they contain special plant for the extraction of dust from the grain....The whole of the grain in both elevators is treated in this way. That seems to me to be an operation similar to the processes carried on in mills. "The essential of a mill is a process carried on by machinery by which the material subjected to it is made suitable for further treatment in a factory or another mill or for use."

13. Bouvier's Law Dictionary defines the word " mill " as a " complicated engine or machine for grinding and reducing to fine particles grain, fruit, or other substance, or for performing other operations by means of wheels and a circular motion."

14. Black's Law Dictionary defines that word in identical terms.

15. The Oxford English Dictionary gave different meanings of that word. The following however are relevant for our purpose :

1. A building specially designed and fitted with machinery for the grinding of corn into flour. Also forming the second element in certain obvious combinations, as water-mill, wind-mill, flour grist-mill, many of which are treated under the first element.

2(c) A mechanical apparatus, whether simple or complicated, for grinding corn.

3. In the 15-16th C, applied by extension to any machine worked by wind or water power in the manner of a corn-mill, though not used for the purpose of grinding. In later use applied to various machines for performing certain operations upon material in the process of "manufacture"s ; often with defining word, as in flatting-, fulling-, rolling-, saw-mill.

16. Webster's New International Dictionary considers the word "mill" and defines it as :

1. A building provided with machinery for grinding grain into flour ; hence, a machine for grinding or comminuting grain, and, by extension, other material, by rubbing and crushing it; as, a coffeemill ; a bone-mill.

2. Any of various machines which produce a "manufacture"d product by the continuous repetition of some simple action ; as, a saw-mill; a stamp-mill etc.

3. A building or collection of buildings with machinery by which the processes of manufacturing are carried on ; as, a cotton-mill; a power-mill; a rolling-mill.

17. It will thus be seen that the word "mill" may have been once used strictly for the purpose of manufacturing certain articles. The extended meaning according to the change of time now includes every operation of every process of "manufacture". Any operation by a machine which makes the goods available for use or marketing can certainly be considered as a "mill". What is however argued by Mr. Reddy Pantulu is that even though there is a "mill" and it is used for some processing purpose, or it operates upon certain goods, nevertheless, unless the machinery "manufacture"s in the sense that it produces an altogether new commodity out of the raw material, it cannot be called as a "mill". We are unable to accept this contention. It may be that for the purpose of taxation groundnut may have been considered to include kernel. It does not however mean that the decorticating process, which is effected by a machine, does not make it a "mill". Any operation carried on by machinery which changes the raw material and makes it usable either for use or for a further process, or for marketing purpose, can certainly be termed as a "mill".

18. The argument arises out of a misconception in regard to the word ""manufacture"". It is true that in Union of India v. Delhi Cloth and General Mills A.I.R. 1963 S.C. 791 at 795 the word " "manufacture" " was considered by their Lordships of the Supreme Court. In that case, however the Central Excises and Salt Act (1 of 1944) was under consideration which defines the word " "manufacture" " as follows :-

Manufacture includes any process incidental or ancillary to the completion of a "manufacture"d product.

19. While considering that Act their Lordships observed:

We are unable to agree with the learned counsel that by inserting this definition of the word ' "manufacture" ' in Section 2(f) the Legislature intended to equate 'processing' to '"manufacture"' and intended to make mere ' processing ' as distinct from ' "manufacture" ' in the sense of bringing into existence of a new substance known to the market, liable to duty. The sole purpose of inserting this definition is to make it clear that at certain places in the Act the word '"manufacture"' has been used to mean a process incidental to the "manufacture" of the article.

20. We do not therefore think that the decision can render any assistance to the petitioners in the present case. It must be remembered that the word " "manufacture" " does not appear in the clause under our consideration. That word has not been defined in the Act. The definition given for the purposes of the other Act, therefore, cannot be accepted for the purpose of defining the word "mill". As stated above, it is not necessary in every case to constitute " mill " that the goods must be "manufacture"d in the sense in which it is defined in the Central Excises and Salt Act (1 of 1944). The word " "manufacture"" need not be considered as far as the present case is concerned. Even otherwise in our judgment the word ""manufacture"" also has to be given an extended meaning and not confined to any technical meaning given for the purposes of any single Act.

21. According to Black's Law Dictionary the word ""manufacture"" is derived from Latin words "manu" and "facere", literally, put together by hand. Now it means the process of making products by hand or machinery. It makes a mention that the primary meaning of the word is "making with the hands", but this definition is too narrow for its present use. It also mentions as follows :-

Meaning of word '"manufacture"', which is defined as the making of goods or wares by manual labour or by machinery, especially on a large scale, has expanded as workmanship and art have advanced, so that now nearly all artificial products of human industry, nearly all such materials as have acquired changed conditions or new and specific combinations, whether from the direct action of the human hand, from chemical processes devised and directed by human skill, or by the employment of machinery, are now commonly designated as "manufacture"d.

22. When it is used as now it means according to that dictionary

"the process or operation of making wares or any material produced by hand, by machinery or by other agency ; anything made from raw materials by hand, by machinery, or by art."

23. Bouvier's Law Dictionary defines the word ""manufacture"" as "to make or fabricate raw materials by hand, art, or machinery, and work into forms convenient for use ; and, when used as a noun, anything made from raw materials by hand, or by machinery, or by art."

24. Words and Phrases Judicially defined considers the word ""manufacture"" and states :

The word '"manufacture"s' has been generally understood to denote either a thing made, which is useful for its own sake, and vendible as such, as a medicine, a stove, a telescope, and many others, etc., etc.

25. Chambers Twentieth Century Dictionary defines ""manufacture"", to make, originally by hand, now used by machinery, and on a large scale ; n.-the practice, act, or process of manufacturing.

26. The Concise Oxford Dictionary gave the following meaning to the word ""manufacture"" :

Making of articles by physical labour or machinery, esp., on large scale.

27. Webster's New International Dictionary attributes the following meaning to the word

"manufacture"

To make (wares or other products) by hand, by machinery, or by other agency ; as, to "manufacture" cloth, nails, glass, etc., to produce by labour, esp., now, according to an organised plan and with division of labour, and usually with machinery.

28. The Oxford English Dictionary lends a meaning to that word as,

"the action or process or making articles or material (in modern use, on a large scale) by the application of a physical labour or mechanical power."

29. It will thus be manifest that there is no warrant for the construction of the word ""manufacture"" only to mean a process by which the raw material is converted into an altogether new article. It has been given a very wide and extended meaning, and as stated above, the meaning of the word ""manufacture"" would naturally take in the present day context any process carried on by machinery which ultimately makes raw material usable or marketable, or ready for further mechanical operation. We have therefore no hesitation in rejecting the contention that inasmuch as the groundnuts after they are decorticated produce kernel which is not altogether a new article, therefore the decorticating process is not a ""manufacture"" and further that when it is not a process of "manufacture", it is not a "mill". We have already pointed out that the fallacy in the argument is that it starts from a wrong end. Both the words "mill" as well as ""manufacture"" are not capable of a restricted or narrower meaning. Even the dictionary meanings copiously cited above lend considerable support to the conclusion that they have to be given the modern and extended meaning.

30. In this connection it is profitable to refer to Ellerker v. Union Cold Storage Co., Ltd. [1939] 1 All E.R. 23 at 27-28 Macnaghten, J., observed at page 27 as follows :-

In my view, since the words, 'mills' and 'factories' are ordinary English words, they must be construed in their ordinary and natural sense, and it is only misleading to take words from other Acts passed for other purposes and to construe these words in the light of decisions under other Acts....The meaning of the word 'mill' is also, I think, plain enough. A mill is a building where goods are subjected to treatment or processing of some sort, and where machinery is used for that purpose.

31. Pointing out the difference between factories and mills the learned Judge proceeds to observe :

Mills and factories-though they differ in this respect, that in the former goods are treated or processed, and in the latter goods are "manufacture"d or made-have this in common, that both are equipped.with machinery, worked in former days by wind or water and nowadays by steam or electricity or some other power.

32. The Calcutta case relied upon by the learned Advocate for the petitioners does not provide any aid to the petitioners. In that case the question was whether the sawing of planks from timber or sizing the same amounts to "manufacture" and the person carrying on such a business is a "manufacture"r. It was found that when planks are sawed out of logs, what is produced is a different thing from logs capable of being put to different uses.

33. We are therefore satisfied that having regard to the meanings which according to their common usages are given to the words " mill " and " "manufacture" " and even according to the dictionary meanings considered above, the word " miller " appearing in item 3-C, column (2) of Schedule IV of the Act would mean both the decorticating miller and the oil miller. It cannot be seriously disputed that even in common parlance the " mills " which carry on decorticating process are called "mills". Oil mills even according to the petitioners are termed as such. Even the petitioners in most of the petitions have used the term in regard to their factories as "decorticating mills". That being so, the main contention raised by the petitioners falls and we experience no difficulty in rejecting the same.

34. Even in view of the legislative history we are satisfied that the word "miller" was used by the Legislature in the provision under consideration indicating to include both decorticating as well as oil miller. In this regard it is profitable to note that the said clause has been further amended by act 16 of 1963, which amendment now makes it clear that decorticating miller would be excluded from the tax. It clearly expresses the intention of the Legislature that whereas the old Act included both decorticating as well as oil miller, the new amended Act excludes the category of decorticating miller from the payment of sales tax. It is not now in doubt that light may also be thrown upon the meaning of a word by the parliamentary exposition made in subsequent statutes. Craies on Statute Law at page 137 states:-

Light may also be thrown upon the meaning of an Act by taking into consideration enactments contained in subsequent Acts. Sometimes an Act is passed for the express purpose of explaining or clearing up doubts as to the meaning of a previous Act, and is called an Act of Explanation.

But Acts of Parliament, without having been passed for the express purpose of explaining previous Acts, are sometimes spoken of as being 'legislative declarations' or 'parliamentary expositions' of the meaning of some earlier Act.

35. In Cape Brandy Syndicate v. Inland Revenue Commissioners [1921] 2 K.B. 403 at 414, it is observed as follows :-

I think it is clearly established in Attorney-General v. Clarkson [1900] 1 Q.B. 156 that subsequent legislation on the same subject may be looked to in order to see what is the proper construction to be put upon an earlier Act where that earlier Act is ambiguous. I quite agree that, subsequent legislation, if it proceeds upon an erroneous construction of previous legislation, cannot alter that previous legislation ; but if there be any ambiguity in the earlier legislation then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier.

36. To the same effect is the decision of this Court in Venkataratnam v. Sarvarayudu (1963) 1 An. W.R. 91

37. For the reasons which we have endeavoured to give we are satisfied that there is no substance in these petitions. These petitions, therefore, are dismissed with cost. Advocate's fee Rs. 750 to be distributed amongst all the petitioners equally.