Varghese Kalliath, J.:— The same assessee, Brooke Bond India Limited is the revision petitioner in all these cases. A common question arises for consideration in these Tax Revision Cases. We deem it proper to dispose of these cases by a common judgment.
2. Revision petitioner is a registered dealer under the Kerala General Sales Tax Act, 1963, for short, the Act. One of the major products manufactured by the petitioner is instant coffee-chicory blend prepared in the ratio of 70:30 and sold under the brand name ‘Bru’. It is the case of the assessee that the process of manufacture involves mixing of coffee powder (70%) with chicory powder (30%) suspending the same in water, extracting the liquor and dehydrating the liquor by spray-drying process. The result is, the product obtained is a mixture of 70% coffee and 30% chicory in fine powder form. Bru’ is a brand name adopted for marketing this product. According to the assessee, the process of manufacture renders the coffee-chicory powder a refined form of coffee which leaves no sediment while coffee is made out of it. The further case of the assessee is that the product is popularly known in the market as ‘Bru Coffee’.
3. There were separate entries for the purpose of imposing sales tax for coffee and chicory till 15-9-1980. The items were Nos. 37 and 38 of the first schedule to the Act. Both items were taxable at the first point of sale in the State at the rate of 6%. Petitioner collected and paid tax at the rate of 6% as provided under item 37 of the first schedule on all their sales of Bru upto 15-9-1990. From 16-9-1980, the petitioner treated Bru as coming under entry 21 providing for coffee, tea spices and manufactures thereof, taxable at the rate of 6% at the first point of sale in the State. Petitioner continued to collect and pay taxat the rate of 6% on all their sales of Bru for the year 1980-81. From 1-4-1983 entry 21 was amended to exclude from it “French Coffee” and a new entry 21A was inserted for French Coffee providing for taxon it at the rate of 6% at the first point ofsalein the State.
4. For the assessment year 1980-81, the assessee had decided to accept the classification of Bru under entry 37 upto 15-9-1980 and under entry 21 thereafter. The assessing authority assessed the turnover on the sale of Bru during the year at the rate of 4% treating the product as an item taxable at multi point. The excess tax collected and paid by the petitioner was forfeited by the assessing authority.
5. By invoking the powers under S. 35 of the Act, the original assessment was set aside by the Deputy Commissioner of Agricultural Income Tax and Sales Tax, Ernakulam. He directed re-assessment of the turnover of sales of Bru under item 25P of the first schedule to the Act upto 15-9-1980 and thereafter, under item 33 of the first schedule to the Act. The description of item 25P is non-alcoholic drinks, beverages bottled or canned and sold under brand name. The point of levy is first sale in the State by a dealer who is liable to tax under S. 5. The rate of levy is 10%. The turnover of sales of Bru for the remaining period of the assessment year 1980-81, was levied under item 33 of the first schedule to the Act. The description of item 33 is non-alcoholic drinks, squashes, sauces and beverages, bottled or canned and sold under the brand name. The point of levy is first in the State by a dealer who is liable to tax under S. 5. The rate of tax is 10%.
6. Theorder of the Deputy Commissionerwas challenged in appeal before the Sales Tax Appellate Tribunal. The Tribunal confirmed the order of the Deputy Commissioner and rejected the petitioner's appeal. The Tribunal passed a common order for the assessment years 1980-81, 1981-82 and 1982-83. T.R.C No. 64 of 1989 in concerned with the assessment for the assessment year 1980-81, T.R.C No. 65 of 1989 for the assessment year 1981-82 and T.R.C no. 66 of 1989 for the assessment year 1982-83.
7. In regard to the assessment year 1980-81, the levy of sales tax has to be determined for the period upto 16-9-1980 under a particular item and thereafter, under a different item, since the first schedule to the Act was amended with effect from 16-9-1980. Here the question is whether it is correct to levy tax under item 25P for the period prior to 16-9-1980 and for the remaining period under item 21. In regard to the assessmentyears 1981-82 and 1982-83, the only question is whether the taxhas to be levied under item 21 or 33 of the first schedule to the Act.
8. Now we shall consider the question separately with respect to the relevant years.
T.R.C No. 64 of 1989:—
9. In this case, we have to consider two periods, viz., period upto 16-9-1980 and from 16-9-1980 till the end of the assessment year. The description of item 25P is non-alcoholic drinks and beverages, bottled for canned and sold under brand name. The point of levy is first sale in the State by a dealer who is liable to tax under S. 5. The rate of tax is 10%. The Tribunal held that for the period upto 15-9-198C the entry that is relevant for the purpose of levying sales tax on the sale turnover of Bru is 25P of the first schedule to the Act. The Tribunal also found that after the period 15-9-1980, the relevant entry is 33.
10. Counsel for the assessee contended that there is absolutely no justification for levying sales tax for the sales turnover of Bru under entry 25P. Entry 25P is an exclusive entry for non-alcoholic drinks and beverages bottled or canned. Admittedly, Bru is not a beverage or a drink inso-far as it is sold as powder. In order to attract the en try 25P, the goods sold should be ‘drinks’ or ‘beverages’. In Chambers 20th Century Dictionary, New Edition, 1983, the word ‘drink’ is explained as follows:—
‘To swallow as a liquid: to smoke; to empty, as a glass, bowl, etc. to absorb: to take in through the senses-to swaliow a liquid: to take intoxicating liquors to excess”.
11. The word ‘beverage’ is explained as follows:—
“Any liquid for drinking, esp. tea, coffee, milk, etc. a mixture of cider and water a drink or drink-money to celebrate an occasion”.
12. Admittedly, Bru is a powder and it is difficult for us to say for the purpose of sales tax that Bru is a drink or a beverage. In Deputy Commissioner Of Sales Tax (Law) v. V.P Sukumaran, 1989 (1) KLT 238 : (1989) 74 S.T.C 185, a Division Bench of this Court held in the case of ‘Rasna’ a soft drink concentrate, was not taxable under entry 25P of the first schedule to the Act as a non-alcoholic drink or beverage, thus:—
“Since “Rasna” is only a soft-drink concentrate and not a drink or liquid as such, but only a raw material for the preparation ofsoft-drinks, we are of the viewthat “Rasna” will not come under entry 25P of the First Schedule to the Kerala General Sales Tax Act, before its amendment by Act 19 of 1980”.
13. This decision is squarely applicable to the assessee's case in regard to the period prior to 16-9-1980 for the assessment year 1980-81. The decision of the Tribunal that the sales turnover of Bru for the period upto 16-9-1980 for the assessment year 1980-81 should be taxed under 25P of the first schedule to the Act is therefore not legal and correct. The assessee has paid sales tax at the rate of 6% for the period in question. We hold that the assessee is not liable to pay sales tax for the said period at the rate of 10% under entry 25P of the First Schedule to the Act.
14. In regard to the question, under what entry the sales tax has to be levied for the turnover of the sales effected by the assessee for the remaining period (from 16-9-1980) for the assessment year 1980-81 and for the turnover of sales effected by the assessee for the assessment years 1981-82 and 1982-83, the point and matters to be considered are the same. The entries that have to be considered for a proper answer to the question are entries 21 and 33. Entry 21 comes under the broad heading coffee, tea, spices and manufactures thereof. The description of entry 21 is, “coffee”, that is to say anyone of the forms of coffee such as coffee beans, coffee seeds (raw or roasted) coffee powder but not including coffee drink. Entry 33 is non-alcoholic drinks, squashes, sauces and beverages, bottled or canned and sold under brand name. The Explanation to this entry reads thus:—
“Powers and tablets used for the preparation of non-alcohokic drinks shall, whether or not they are bottled or canned, be liable to tax under this item or item 34”.
15. In regard to item 33 and item 21, the point of levy is first sale in the State by a dealer who is liable to tax under S. 5. The rate of tax in regard to item 21 is 6% and item 33 10%. The Tribunal has held the assessec-revision petitioner is liable to pay sales tax on the sales turnover of Bru for the period 16-9-1980 to 1-4-1981 and for the assessment years 1981-82 and 1982-83 at the rate of 10% under entry 33. The assessec challenges this determination and submits before us that-he assessee is liable to pay salestax only under entry 21 of the first schedule to the Act. Counsel for the assessee submits that entry 21 would takein, coffee, in any one of the form sofcoffee and ‘Bru’ is noneotherthan a form of coffee and so, the specific entry for coffee under entry 21 of the first schedule to the Act is the apt and ad-rem entry that is applicable in the case of sales turnover of Bru. The Department contended that the item Bru marketed by the assessee is quitedifferent from coffee. This contention is based on the fact that the main ingredients viz. coffee and chicory has to undergo several industrial process before a new product emerges. In sum, the contention of the Departrr ??? is that the product presented in the Brand name of Bru is a beverage extracted from the main ingredients of coffee and chicory. Further, it was contended that the process involved in making a cup of drink of Bru is so simplified when compared to the usual process employed in making coffee drink like adding boilingwater, filtering of the residue etc. and that the product rather caters to the needs of advanced living. It is also submitted that commercial instant coffee and ordinary coffee are two different products.
16. As we said earlier, counsel for the assessee submitted before us that entry 21 is a specific entry as opposed to the general entry 33. If any item is includable in a specific en try, it is notpermissible to include thatitem in the general ennry for the purpose of levy of tax on that item. Further, he submitted thai entry 21 deals with coffee and “anyone of the forms of coffee”, and the composition of Bru is 70% coffee and 30% chicory. Chicory is a specific item, viz., item 18. French coffee is also a specific item, after the 1983 amendment to the first schedule of Act. Further, it has to be noted that item 21A is an item describing French Coffee as an admixture)f coffee and chicory. This item is also taxable at the point of first sale in the State by a dealer who is liable to tax under S. 5 and at the rate of 6%, which is the same rate for coffee after the 1983 amendment. Till 1983 amendment, no differenciation has been made in regard to french coffee, which is admittedly an admixture of coffee and chicory. Counsel submitted that the amendment effected in 1983, separating coffec and french coffee and pulting them in two entries, itself is an indication that before the amendment coffee mixed withchicory is also considered and treated for the purpose of sales tax as coffee. Counsel submitted that in considering what is the entry that is applicable for the purpose of levying sales tax in regard to an article sold by an assessee, the entry has to be construed as understood popularly by the consumers and those persons who deal in those items. Counsel also invited our attention to the conspicuous absence of beverages in the Explanation to entry 33.
17. It is a well settled proposition of interpretation that if certain words are used in a statute which are capable of being construed in a popular sense, that is to say, how people in general understand the meaning of those words such words should not be construed according to the strict or technical meaningof the language contained in them, but have to be construed in its popular sense, that is to say, in the sense, which people conversant with the subject matter will understand them. Words in every day use when comes up for interpretation before the court, therefore, have to be construed according to their popular sense. This principle is well settled by a catena of Indian decisions and also of English, American and Austrailian decisions. See United Offset Process Pvt. Ltd. v. Assistant Collector of Customs, Bombay (74 S.T.C 212).
18. In His Majesty the King v. Planters Nut and Chocolate Company Limited (1951 C.L.R (Ex.) 122, the question that was decided was whether salted peanuts and cashew nuts fell within the category of either fruits or vegetables. Cameron, J. in dealing with the question observed thus: The object of the Excise Tax Act is to raise revenue, and for this purpose, to class substance according to the general usage and known determination of trade. In my view, therefore, it is not the botanist's conception as to what constitutes a ‘fruit’ or ‘Vegetable’ which must govern the interpretation to be placed on the words, but rather what would ordinarily in matters of commerce in Canada be included therein. Botanically, oranges and lemons are berries, but otherwise no one would consider them as such”. This rule was stated as early as 1831 by Lord Tenterden in Attorney General v. Winstanley, (1831) 2 D & Cl. 302.
19. Relyingon thedecision reported in 1951 C.L.R (Ex.) 122, and also the rule laid down by Lord Tenterden the Supreme Court in Commissioner of Sales Tax v. Jaswant Singh Charan Singh, (1967) 19 S.T.C 469 held that “while interpreting items in statutes like the Sales Tax Act, resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense”.
20. In commercial sense, Bru is a form of coffee even though it is an instant coffee, the composition of which contains 70% coffee and 30% chicory. In the decision reported in (1967) 19 S.T.C 24 (State Of Gujarat v. Sakarwala Brothers), the Supreme Court had occasion to consider whether Patasa, harda and alchidana can be considered asan item falling within the definition of “sugar” under the Bombay Sales Tax Act, 1969. The Supreme Court held that Patasa, harda and alchidana fall within the definition of “sugar” in entry 47 of Schedule A to the Bombay Sales Tax Act, 1959, and their sales are exempt from the payment of sales tax. The word sugar in entry 47 is intended to include within its ambit all forms of sugar, that is to say, sugar of any shape or texture, colour or density and by whatever name it is called.
21. In Tungabhadra Industries Ltd., Kurnool v. Commercial Tax Officer, Kurnool, (1960) 11 S.T.C 827, a Bench of five Judges had occasion to consider whether hydrogenated ground nut oil commonly called Vanaspati is ground nut oil within the meaning of rule 18(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. After a very detailed examination of the inter molecular change in the content of the substance, viz., vanaspathi, in re-ground nut oil, the court held that even though in the course of hydrogenation, the oil absorbed two atoms of hydrogen and there was an inter molecular change in the content of the substance, but the hydrogenated oil continued even after the change to be ground nut oil and that hydrogenated oil (vanaspathi) cannot be denied that benefit of the deduction from the turnover on the ground that vanaspathi has ceased to be ground nut oil. We feel that people in the trade and commerce conversant with the subject viz., Bru, understand it in the usual course as a form of coffee and in that sense we have to hold that ‘Bru’ is a form of coffee and the entry that is applicable is Entry 21 from 16-9-1980 to 31-3-1983.
22. In the result, we have to set aside the common order of the Appellate Tribunal. The T.R.Cs are allowed.
23. Mowed.