Divan, C.J.

1. The same question arises in both these cases, viz., whether tobacco seed oil and tobacco seed cake are liable for the levy of tax under the provisions of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as the Act) or whether they are exempted under the Fourth Schedule of the Act. The matter first came up for hearing before Alladi Kuppuswami, J., sitting single and by his order dated 7th June, 1976, he referred the matter to a Division Bench because he felt some difficulty in following the decision of Ramachandra Raju, J., sitting single, in Sikkakollu Subba Rao & Co. v. State of A. P. [1975] 36 S.T.C. 457. The decision of Ramachandra Raju, J., dealt with the question of tobacco seed and not tobacco seed oil or tobacco seed cake. But, it is obvious that if tobacco seed is not tobacco within the meaning of the relevant entry in the Fourth Schedule of the Act, much less can tobacco seed oil and tobacco seed cake be said to be tobacco within the meaning of the said entry.

2. Under Section 8 of the Act, subject to such restrictions and conditions as may be prescribed, including conditions as to licences and licence fees, a dealer who deals in the goods specified in the Fourth Schedule shall be exempt from tax under this Act in respect of such goods. Item 7 in the Fourth Schedule is "tobacco". Explanation to the Fourth Schedule says that "expressions in items 5, 6 and 7 shall have the same meanings assigned to them in the Additional Duties of Excise (Goods of Special Importance) Act, 1957", being Central Act 58 of 1957. When one turns to that Act, one finds that under Section 2(c) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the word "tobacco" shall have the meaning assigned to it in item 4 of the First Schedule to the Central Excises and Salt Act, 1944 and item 4 of the First Schedule to the Central Excises and Salt Act defines "tobacco" as follows :

'Tobacco' means any form of tobacco, whether cured or uncured and whether manufactured or not and includes the leaf, stalks and stems of the tobacco plant, but does not include any part of a tobacco plant while still attached to the earth.

3. It is thus clear that by incorporation by reference the definition of "tobacco" as defined in item 4 of the First Schedule to the Central Excises and Salt Act, 1944, via the Additional Duties of Excise (Goods of Special Importance) Act, 1957, was incorporated as the definition in item 7 of the Fourth Schedule to the Act and if any particular item falls within this definition of "tobacco", by virtue of Section 8 of the Act it would be exempt from tax.

4. It may be pointed out that prior to the amendment of the Fourth Schedule by the Amendment Act of 1970, item 7 in the Fourth Schedule, as it then was, under which goods were exempted from tax under Section 8, the entry was "tobacco and all its products". The question whether tobacco seed oil and tobacco seed cake were exempted under the unamended provisions of item 7, namely, "tobacco and all its products", came up for consideration before a Division Bench of this Court consisting of Gopal Rao Ekbote, J. (as he then was) and Venkateswara Rao, J., in Amara Purushotham Mamidi Obaiah and Co. v. State of Andhra Pradesh [1972] 29 S.T.C. 654 at 657. It must be emphasised that the entry with which the Division Bench in that case was concerned was "tobacco and all its products". In the judgment at page 657, speaking for the Division Bench, Venkateswara Rao, J., observed:

It is common ground that tobacco seed oil is produced by crushing the seeds and that the mass, which is formed as a result of the compression to which the seeds are subjected while extracting oil, goes by the name 'tobacco seed oilcake'. As the oil and cake are produced by crushing the seeds, which, according to Sri Anantha Babu, form part of the tobacco plant, it is contended for the petitioners that none of those goods is exigible to tax. It is, on the other hand, argued by Sri Ramachandra Reddy, the learned Government Pleader, that tobacco seed is neither tobacco nor its product, that even if the seeds should be considered part of tobacco, they cease to retain that character the moment they are separated from the plant and that, in this view, no exemption can be claimed either in the case of seeds or the oil and cake, which, according to him, are at best products of the 'seeds' and not of 'tobacco.

5. It is necessary that we should know the meaning of the word 'tobacco' to be able to appreciate the respective contentions urged for the parties. This term is not defined or explained anywhere in the Act. 'Tobacco' is a plant of American origin with narcotic leaves used for smoking, chewing or snuff, according to Concise Oxford Dictionary. This expression is explained in Webster's New International Dictionary as 'any plant of the genus Nicotiana, especially of the species cultivated for their leaves, the most common being Nicotiana tobacum of South American origin. It is a tall annual plant with ample ovate or lanceolate leaves and white or pink tubular flowers'. The meaning assigned to this term in the Reader's Digest Great Encyclopaedic Dictionary is almost the same. According to this dictionary 'tobacco' means 'various species of Nicotiana, especially Nicotiana tobacum, native of tropical America, tall annual plant with white or pink tubular flowers and large ovate leaves used, dried and variously prepared, for smoking or chewing or in the form of snuff.' The word 'tobacco' therefore connotes the plant going by that name as a whole and not merely its leaves as sought to be contended for the respondents. Roots, stem, stalks, flowers and seeds are as much parts of the plant as its leaves since a typical plant consists of all these parts and branches and fruits in addition. So, if by 'tobacco' is meant all the parts of the plant known by that name and not merely the leaves thereof, it is difficult to comprehend how the seeds developed in the flower portion of the plant could be any the less tobacco. Tobacco is the name given to the plant as a whole of which the seeds form a part and so seeds also constitute tobacco, of course, only so long as they remain attached to the plant".

6. It is then pointed out by the Division Bench that according to the decisions in I. L. T. Development Co. Ltd. v. State of Madras [1954] 5 S.T.C. 354 and Kotak and Co. v. State of Andhra Pradesh [1962] 13 S.T.C. 709, "cotton seed" once it is separated from cotton in the process of manufacture is not cotton and after cotton seed is separated from the lint it ceases to be cotton and the two things "cotton" and "cotton seeds" are two distinct goods. It may be pointed out that this question regarding cotton and cotton seeds has subsequently been considered by the Supreme Court in State of Punjab v. Chandu Lal Kishori Lal [1970] 25 S.T.C. 52 (S.C.) and there the Supreme Court held that though cotton in its unginned state contained cotton seeds, the cotton and the seeds were separated by the manufacturing process of ginning and the seeds so separated could not be said to be cotton itself or part of the cotton.

7. Applying the reasoning in the decisions regarding cotton seed not being cotton after it is separated from the lint the Division Bench in Amara Purushotham Mamidi Obaiah & Co. v. State of A. P. [1972] 29 S.T.C. 654, held that tobacco seeds ceased to be "tobacco" the moment they are removed from the plant and constitute a separate and distinct class of goods with independent properties and potentialities and not the same as those of the parent plant.

8. We respectfully agree with this conclusion of the Division Bench, consisting of Gopal Rao Ekbote and Venkateswara Rao, JJ. The Division Bench pointed out that but for the fact that tobacco seed was a product of tobacco as distinct from tobacco itself, under the relevant entry as it then stood in the relevant schedule of the A. P. General Sales Tax Act before its amendment by the Amendment Act of 1970, tobacco seed could not be said to be exempted from sales tax under the A. P. General Sales Tax Act. However, the Division Bench pointed out that tobacco seed oil and tobacco seed oilcake were neither tobacco nor its products and these two items were not entitled to exemption envisaged In item 7 of the Fourth Schedule to the Act.

9. In order to derive support for its conclusion that tobacco seed was not tobacco as distinct from a product of tobacco, the Division Bench looked at item 4 of the First Schedule to the Central Excises and Salt Act, 1944, for the purpose of being fortified for the view that they had taken, viz., that tobacco seed is not tobacco. After referring to the definition of "tobacco" in item 4 of the First Schedule to the Central Excises and Salt Act, Venkateswara Rao, J., speaking for the Bench, observed:

It is true that no mention of seeds is made in this definition; but this is no reason to infer that seeds do not form part of tobacco in view of the employment of the word 'includes' in it, thereby indicating that it is only illustrative in nature and not exhaustive. A careful examination of this definition would reveal that the expression 'tobacco' is very comprehensive and that all the parts of the plant going by that name, including the seeds, come within the ambit of 'tobacco', of course, only so long as the plant continues to remain attached to the earth.

10. With great respect, this passage which we have extracted from the decision of the Division Bench contains two inaccuracies. The last part of the extract from the very definition of item 4 of the First Schedule to the Central Excises and Salt Act should read "not so long as the plant continues to remain attached to the earth" and not "only so long as the plant continues to remain attached to the earth". The second inaccuracy, which to our mind, is a major inaccuracy is that it reads the word "includes" in the definition of "tobacco" in item 4 of the First Schedule to the Central Excises and Salt Act of 1944 as illustrative in nature and not exhaustive. With great respect, that interpretation of the word "includes" in the definition clause is contrary to the well-settled principles of interpretation of statutes. As far back as 1899, the House of Lords in Dilworth v. Commissioner of Stamps [1899] A.C. 99, pointed out that the word "includes" unless the context otherwise requires not only takes those things which the interpretation Section declares that it shall include, but such things as the word signifies according to its natural import. This interpretation in Dilworth v. Commissioner of Stamps [1899] A.C. 99 was followed by the Privy Council in King v. B. C. Fir and Co. A.I.R. 1932 P.C. 121 at 124 It is clear that in the context of the instant case, the word "includes" in item 4 of the First Schedule to the Central Excises and Salt Act of 1944 has not been used in the sense of "means and includes" and, therefore, is not exhaustive. But, merely because it is not exhaustive, it cannot be said to be illustrative as was observed by Venkateswara Rao, J., speaking for the Division Bench in Amara Purushotham Mamidi Obaiah and Co. v. State of A. P. [1972] 29 S.T.C. 654. The normal function of the word "includes" is to indicate that the particular word so defined by the use of the word "includes" not only continues to have its ordinary meaning, its natural import, but it also includes within its ambit all those things which the definition says that it shall include. The same interpretation of the word "includes" was accepted by the Supreme Court in Commissioner of Income-tax, A. P. v. Taj Mahal Hotel [1972] 82 I.T.R. 44 (S.C.). In paragraph 6, at page 170 (page 47 of 82 I.T.R.) Grover, J., speaking for the Supreme Court, has observed :

The word 'includes' is often used in interpretation Sections in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import, but also those things which the interpretation Section declares that they shall include.

11. In the instant case, therefore, when item 4 in the First Schedule to the Central Excises and Salt Act of 1944 says that "tobacco" means any form of tobacco, whether cured or uncured and whether manufactured or not and includes the leaf, stalks and stems of the tobacco plant, what the definition provides for is that any form of tobacco as ordinarily understood in its natural import cured, uncured or whether manufactured or not comes within this definition and by the use of the word "includes", the legislature has indicated that leaf, stalks and stems of the tobacco plant, even if they may not ordinarily be understood to fall within the definition of "tobacco" constituted "tobacco" for purposes of this definition. It is, therefore, clear that it is only in this sense that the words can be understood, that is, "leaf, stalks and stems of the tobacco plant" are tobacco for purposes of the definition in item 4. To read that inclusive definition as indicating that all parts of the plant including the seeds come within the ambit of "tobacco", according to this definition, is, with great respect to the Division Bench which decided Amara Purushotham Mamidi Obaiah and Co. v. State of A. P. [1972] 29 S.T.C. 654, not correct. It may be pointed out that this interpretation which was placed by the Division Bench on item 4 of the First Schedule to the Central Excises and Salt Act was a mere obiter and not the ratio decidendi of the case before that Division Bench and hence that interpretation is not binding on us. It may be reiterated here that the only question before the Division Bench in Amara Purushotham Mamidi Obaiah and Co. v. State of A. P. [1972] 29 S.T.C. 654, was whether tobacco seed, tobacco seed oil and tobacco seed oilcake were products of tobacco, because the entry with which they were dealing was "tobacco and all its products" and the Division Bench held that tobacco seed was a product of tobacco, as ordinarily understood, but tobacco seed oil and tobacco seed oilcake which were products of tobacco seeds could not be said to be products of tobacco. With respect to the learned Judges, who constituted that Division Bench, we agree with their final conclusion, but we respectfully disagree with the interpretation placed by them on the meaning of item 4 of the First Schedule to the Central Excises and Salt Act, 1944.

12. In Sikkakollu Subba Rao and Co. v. State of A. P. [1975] 36 S.T.C. 457, Ramachandra Raju, J., sitting single, was concerned with the provisions of item 7 of the Fourth Schedule to the Act, as it stood after its amendment by the Amendment Act of 1970 and he was precisely concerned with the very definition with which we are concerned. He extracted the last quoted passage from the decision of the Division Bench in Amara Purushotham Mamidi Obaiah's case [1972] 29 S.T.C. 654 and observed :

It is generally accepted principle that in the matter of taxation laws if a provision is wanting in clarity and no meaning is reasonably clear, that meaning which is more favourable to the subject should be taken as its meaning. The word 'tobacco', according to its ordinary dictionary meaning, is not merely any part of the tobacco plant like its leaves but the plant itself. Therefore, the expression 'tobacco', without any definition, would include the entire tobacco plant. By the definition in question, the expression was intended to be given both some restricted and enlarged meaning. By its enlarged scope both cured and manufactured. tobacco are brought into it and not merely its natural state. By its restricted scope tobacco plant or any part of it while the plant is attached to the earth were taken out of its purview. By giving an inclusive definition, it does not appear that the definition was intended to be restricted only to those parts of tobacco plant mentioned therein.

13. He held that tobacco seeds must be taken as part of the definition under item 4 of the First Schedule to the Central Excises and Salt Act, 1944 and he therefore held that tobacco seeds are exempted from tax by virtue of Section 8 of the Act read with item 7 in the Fourth Schedule to the Act. With great respect to our learned brother, Ramachandra Raju, J., we are unable to agree with this conclusion of his. As Venkateswara Rao, J., speaking for the Division Bench in Amara Purushotham Mamidi Obaiah's case [1972] 29 S.T.C. 654 rightly pointed out, in its ordinary meaning "tobacco" would not mean "tobacco seed" after the tobacco seed is separated from the tobacco plant. In our opinion, this conclusion is fortified by the three decisions we have already referred to regarding "cotton seed" and "cotton". Thus, it is clear that Ramachandra Raju, J., with respect to him, has overlooked the very basis of the decision of the Division Bench in Amara Purushotham Mamidi Obaiah's case [1972] 29 S.T.C. 654, viz., that once tobacco seed is separated from the tobacco plant, it ceased to be tobacco and it was only by virtue of the fact that the Division Bench in that earlier case came to the conclusion that tobacco seeds were products of tobacco that they held that tobacco seeds were exempted from sales tax. It is by overlooking those parts of the judgment of the Division Bench in Amara Purushotham Mamidi Obaiah's case [1972] 29 S.T.C. 654 that Ramachandra Raju, J., with respect to him, wrongly interpreted the word "tobacco" to include "tobacco seed" in regard to "tobacco" as defined in item 4 of the First Schedule to the Central Excises and Salt Act, 1944.

14. Sri Babulu Reddy, the learned counsel appearing for the petitioners in these two writ petitions, urged before us that on a plain reading of the definition in item 4 by the concluding words of the definition which says that tobacco does not include any part of a tobacco plant while still attached to the earth and the inclusive definition, which says that tobacco includes the leaf, stalks and stems of the tobacco plant after it ceased to be attached to the earth, we should hold that tobacco seed which is also a part of the tobacco plant after it ceased to be attached to the earth should be held to be tobacco within the meaning of item 4 of the First Schedule to the Central Excises and Salt Act. It is important to note in this connection that the Central Excises and Salt Act is concerned with levying tax on the act of manufacture or production of a particular commodity and not on its cultivation as an agricultural product. It is for this reason that the Central Excises and Salt Act of 1944 defines "tobacco" not to include any part of a tobacco plant while still attached to the earth, but once the plant Is severed from the earth and ceases to be attached to the earth, only those three parts specifically enumerated in the definition, viz., leaf, stalks and stems, are included in the definition of "tobacco" and not any other parts of the tobacco plant after the plant is severed from the earth. It is thus clear that the definition in the Central Excises and Salt Act could by no stretch of imagination be said to cover tobacco seed as falling within the definition of the word "tobacco".

15. The statement of objects and reasons to the Bill, which was enacted as the Additional Duties of Excise (Goods of Special Importance) Act, 1957, points out:

The object of the Bill is to impose additional duties of excise in replacement of the sales taxes levied by the Union and the States on sugar, tobacco and mill-made textiles and to distribute the net proceeds of these taxes, except the proceeds attributable to the Union territories, to the States. The distribution of the proceeds of the additional duties broadly follows the pattern recommended by the Second Finance Commission. Provision has been made that the States which levy a tax on the sale or purchase of these commodities after the 1st April, 1958, do not participate in the distribution of the net proceeds. Provision is also being made in the Bill for including these three goods in the category of goods declared to be of special importance in inter-State trade or commerce so that, following the Imposition of uniform duties of excise on them, the rates of sales tax if levied by any State are subject from 1st April, 1958, to the restrictions in Section 15 of the Central Sales Tax Act, 1956.

16. The Second Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957, provides for distribution according to the scheme laid down in that schedule, of different amounts of money to the different States of the Indian Union as provided in that schedule. It is thus clear that when by act 9 of 1970 the A. P. Legislature amended the Fourth Schedule to the Act, it incorporated the very definition of the Additional Duties of Excise (Goods of Special Importance) Act so as to make it clear that exemption was being granted in this particular case because the State wanted to fall into line with the scheme of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and the State of Andhra Pradesh wanted to share in the net proceeds of these additional duties imposed by the Act of 1957 rather than continue to levy sales or purchase tax, inter alia, on tobacco. It is for this specific purpose that the definition of the Central Excises and Salt Act, 1944, was incorporated by reference in the definition of the word "tobacco" occurring in the Fourth Schedule to the A. P. General Sales Tax Act. Therefore, not much significance can be attached to the words occurring at the end of the definition of "tobacco" in item 4, "does not include any part of a tobacco plant while still attached to the earth". It may incidentally be pointed out that for the Central sales tax certain goods are declared goods which are governed by the special provisions of the Central Sales Tax Act and oil-seeds enumerated for the purpose of those declared goods do not include tobacco seed, though tobacco seed is an oil-yielding seed. That is merely an indication of what for purposes of the Central Sales Tax Act constitutes oil-seed, but it does not help in the determination of the case before us.

17. Under these circumstances, it is obvious that the definition of the word "tobacco", according to item 4 of the First Schedule to the Central Excises and Salt Act of 1944, does not bring "tobacco seed" within its purview and, therefore, tobacco seed is not exempted from the levy of sales tax under the A. P. General Sales Tax Act, since tobacco seed does not fall within the meaning of the word "tobacco" as defined in the Fourth Schedule to the A. P. General Sales Tax Act.

18. It is clear in view of this conclusion of ours that since tobacco seed is not "tobacco" for the purposes of exemption under Section 8 of the Act, much less can tobacco seed oil or tobacco seed oilcake or tobacco seed cake be said to be tobacco for the purposes of this exemption.

19. Under these circumstances, each of these writ petitions fails and is dismissed with costs. Advocate's fee Rs. 150 in each matter. Rule discharged in each of the two matters.