RAMASWAMI, J.— The question of law involved in this appeal is whether the sale of Patasa, Harda and Alchidana (small lumps of sugar) fall within the definition of “sugar” in Entry 47 of Schedule A to Bombay Sales Tax Act, 1959 (51 of 1959) hereinafter called the “Bombay Sales Tax Act” and are exempt from the payment of sales tax.
2. The respondents applied under Section 52 of the Bombay Sales Tax Act to the Deputy Commissioner of Sales Tax to determine whether any tax was payable on the sale of Patasa, sakar, bura sugar, harda and Alchidana effected by them under their Bill No. 46 dated 2nd May, 1960, No. 85 dated 1st July, 1960 and No. 92 dated 9th July, 1960. The Deputy Commissioner of Sales Tax held that the sale of “bura sugar” was exempt from tax as the item was covered by Entry 47 of Schedule A to the Bombay Sales Tax Act, whilst the sales of other articles were covered by Entry 22 of Schedule E to the Act and tax was payable on them as such. By a further order dated 3rd October, 1960, the Deputy Commissioner rectified the earlier order and held that the other articles were covered, not by Entry 22 of Schedule E, but by Entry 31 of Schedule C to the Act. The Commissioner of Sales Tax, however, revised the order of the Deputy Commissioner of Sales Tax and by his order dated 24th October, 1960 held that sakar (sugar candy) was a form of sugar and sales thereof were exempt from tax under Entry 47 of Schedule A to the Bombay Sales Tax Act. He further held that articles like Patasa, Harda, Alchidana were products of sugar and not sugar as such in any form. Thereafter, the respondents preferred an appeal to the Gujarat Sales Tax Tribunal which held that Patasa, Harda and Alchidana should be treated as forms of sugar and not sweets or products of sugar and were covered by Entry 47 of Schedule A and were exempt from tax. At the instance of the State of Gujarat the Tribunal referred the following questions of law for the opinion of the Gujarat High Court:
“(1) Whether on the facts and in the circumstances of the case the sale of Patasa, Harda and Alchidana (small lumps of sugar) effected by the opponent under their Bills Nos. 46 and 92 dated 2nd May, 1960 and 9th July, 1960 respectively are exempt from the payment of all taxes leviable under the Bombay Sales Tax Act, 1959 adopted to the State of Gujarat, by virtue of Entry 47 in Schedule A to the said Act;
(2) Whether the sales of Patasa, Harda and Alchidana by the opponents can be regarded as the sales of sweets and sweetmeats within the meaning of Entry 31 of Schedule C to the Bombay Sales Tax Act, 1959 or whether such sales should be covered by Entry 22 of Schedule E to the Act.”
its judgment dated llth December, 1962, the High Court answered the first question in the affirmative in favour of the respondents and in view of the answer to the first question the High Court did not answer the second question. This appeal is brought by special leave against the judgment of the Gujarat High Court dated 11th December, 1962 in the Sales Tax Reference.
Section 5(1) of the Bombay Sales Tax Act provides as follows:
“Notwithstanding anything in this Act, but subject to the conditions or exceptions (if any) set out against each of the goods specified in column 3 of Schedule A, no tax shall be payable on the sales or purchases of any goods specified in that Schedule.”
Entry 47 in Schedule A states as under:
“Sugar as defined in item 8 of the first Schedule to the Central Excises and Salt Act, 1944.”
3. Sugar as defined in Item 8 of the first Schedule to the Central Excises and Salt Act, 1944 is thus exempt from payment of tax under the Bombay Sales Tax Act. Item 8 of the first Schedule to the Central Excises and Salt Act, 1944 defines sugar as follows:
“Sugar means any form of sugar containing more than 90 per cent of sucrose.”
Item 31 of Schedule C of the Bombay Sales Tax Act states:
“Goods, the sale or purchase of which is subject to sales tax or purchase tax and rates of tax.
S. No.
Description of goods
Rate of sales tax
Rate of purchase tax
31.
Sweets and sweetmeats (including Shrikhand, basundi and doodhpak) except when sold in sealed containers of weight not exceeding five seers in each container.
fifty naya paise in the rupee
five naya paise in the rupee.”
4. The Tribunal said that Alchidana or small lumps of sugar referred to by them did not contain any edible articles such as seeds of cardamom or groundnuts but were pure lumps of sugar. In the course of its judgment the Tribunal observed as follows:
“If the chemical composition of the articles is to be taken as a guide in interpreting the Entry 47 there is no doubt that the Patasa, Harda and the Alchidana are merely different forms of sugar as defined by the Central Excise and Salt Act, 1944. We were informed that a small portion of Hydrogen Sulphide is passed through the sugar solution for bleaching purposes after which Patasas are prepared by splashing the solution on a piece of wood which converts the sugar into amorphous sugar, the Hardas are prepared by pouring the solution into moulds which is then allowed to cool and the Alchidanas are prepared by rapidly passing the solution of appropriate thickness through a sieve so as to convert it into granulated lumps of sugar. But whatever the process these articles are only forms of refined sugar with the requisite sucrose content …. After undergoing all the processes, the articles continued to be sugar as defined by the Excise and Salt Act and the fact that they are distributed on festive occasions will not make them anything else than sugar on that account. It may be noted that it is possible to convert any of those articles into other articles by dissolving them in water and subjecting the solution to an appropriate process. They can also be put to the same use to which sugar candy or bura sugar can be put.”
5. The question which we have to consider is whether Patasa, Harda and Alchidana are “forms” of sugar containing more than 90 per cent of “sucrose” and hence are covered by the definition of Entry 47 of Schedule A to the Bombay Sales Tax Act. It is not disputed that Patasa, Harda and Alchidana contain more than 90 per cent of sucrose. It is contended, however, by Mr Bindra on behalf of the appellant that they are not “forms of sugar” but they are products of sugar and do not fall within Entry 47 of Schedule A. We are unable to accept this argument as correct. It is not disputed on behalf of the appellant that the chemical composition of Patasa, Harda and Alchidana is the same as that of sugar viz. there is more than 90 per cent of sucrose. Mr Bindra, however, laid stress on the argument that Patasa, Harda and Alchidana were sweets used on festive occasions. But this circumstance has no relevance on the question of legal classification for the purpose of the Bombay Sales Tax Act. On the other hand, it appears from the judgment of the Tribunal that it is possible to convert these articles into sugar by dissolving them in water and by subjecting the solution to an appropriate process. It is stated by the Tribunal that these articles can be put to same use to which sugar candy can be put. It is, therefore, manifest that Patasa, Harda and Alchidana are only different forms of refined sugar with the requisite sucrose contents. It is argued by Mr Bindra that the phrase “any form of sugar” referred to any variety of sugar and the phrase cannot be taken to mean sugar in any form. It is not possible to accept this argument as correct. If the legislature had intended to refer to “any variety of sugar” there is no reason why it should not have used that expression in Item 47. It is significant that Item 14 which relates to tea states as follows:
“Tea” includes all varieties of the product known commercially as tea and also includes green tea.
6. Item 16 which relates to soap provides that soap means “all varieties of the product known commercially as soap”. But in Item 47, the legislature has used the words “any form of sugar” and not “any variety of sugar”. We are accordingly of opinion that the words “sugar” in Item 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. The qualifying words are that it must contain more than 90 per cent of sucrose. We hold that the view taken by the High Court is correct and the argument of Mr Bindra on behalf of the appellant must be over-ruled.
7. In the course of his argument reference was made by Mr Bindra to the decision of Benrietta Louise Lutz v. Daniel Magone, Collector, etc. in which it was held that in the interpretation of revenue laws, words are to be taken in their commonly received and popular sense, or according to their commercial designation, if that differs from the ordinary understanding of the word. The question involved in that case was whether the plaintiffs were entitled to free importation of saccharine on the ground that it was an acid used for medicinal, chemical or manufacturing purpose. It was held by the Supreme Court that these words should be received in their ordinary acceptation and to speak of a substance, as an acid, which is admitted to be three hundred times as sweet as sugar, was to confuse all our natural impressions with respect to the relative qualities of acidity and sweetness. This decision has no application to the present case where the facts are manifestly different.
8. Learned counsel also referred to the decision in United States v. One Hundred and Twelve Casks of Sugar, Nathan Goodale (1834) 8 Peters 276 where it was observed by the Supreme Court that the denomination of merchandise, subject to the payment of duties, is to be understood in a commercial sense, although it may not be scientifically correct. The question which arose in that case was whether the Collector of the District of Mississippi was entitled to seize and forfeit casks of sugar in a state of partial solution in water on the ground that the article was sugar and not syrup. The argument of the claimant was that the article fell under the class of syrup and ad valorem duty of fifteen per cent is paid only if there is no false designation of the merchandise. The Supreme Court was not able to decide upon the evidence whether the article was liable to be charged to specific duty as sugar but affirmed the decree of the lower court that the property seized should be restored to the claimant on the payment of 15 per cent of ad valorem duty and that the libel be dismissed. The Supreme Court treated the question as essentially a question of fact and thought fit not to interfere with the finding of the lower court that the contents of the casks were syrup and were liable to the lower rate of duty. On behalf of the respondents, however, reliance was placed on Tungabhadra Industries Ltd. v. Commercial Tax Officer, Kurnool [1961] 2 SCR 14 in which the question at issue was whether the appellant was entitled to a deduction in respect of sales of hydrogenated groundnut oil under Rules 4 and 5 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. It was decided by this Court that the hydrogenated groundnut oil continued to be “groundnut oil” notwithstanding the processing which was merely for the purpose of rendering the oil more stable. To be groundnut oil two conditions had to be satisfied — it must be from groundnut and it must be oil. The hydrogenated oil was from groundnut and in its essential nature it remained an “oil”. It continued to be used for the same purpose as groundnut oil which had not undergone the process. It was further stated the mere fact that hydrogenated oil was semisolid did not alter its character as an oil.
9. For the reasons already expressed we hold that the decision of the Gujarat High Court dated December 11, 1962 is correct and that this appeal must be dismissed with costs.