1 Form No. J(2) IN THE HIGH COURT AT CALCUTTA Appellate/Revisional/Civil Jurisdiction Present: The Hon'ble Mr. Justice Bhaskar Bhattacharya And The Hon'ble Mr. Justice Sambuddha Chakrabarti W.P.T.T. No.60 of 2010 Hahnemann Publishing Company Private Limited & Anr. Versus State of West Bengal & Ors. For the Petitioners: Mr. Rajarshi Bhardwaj. For the State: Mrs. Seba Roy. Heard on 04.04.2011 & 05.04.2011. Judgment on : 19th April, 2011. Bhaskar Bhattacharya, J.: This application under Article 226 of the Constitution of India is at the instance of a dealer under the West Bengal Value Added Tax Act, 2003 ("VAT Act") and is directed against order dated 2nd July, 2010 passed by the West Bengal Taxation Tribunal, in RN-134 of 2008, thereby dismissing the appeal preferred by the petitioner challenging the Memo No. 3296 dated 28th November, 2007 issued by the Sales Tax Officer, Sealdah Charge, by which the writ- petitioner was informed that the Homoeo Globules brought into the State of West Bengal by the petitioner would not fall within Entry No.35A of Schedule-A 2 to the VAT Act as claimed but would be treated as an unspecified item as per Schedule-CA to the VAT Act and is subject to tax @12.5%. Therefore, the only question that arises for determination in this writ- application is whether the Tribunal below was justified in holding that the Homoeo Globules imported by the petitioner should fall within the residuary clause of the VAT Act notwithstanding the fact that Entry No.35A of the Schedule-A contains an item, namely, "sugar manufactured or made in India". There is no dispute that the Homoeo Globules imported by the writ- petitioner contains sugar alone and it is manufactured in India by further processing the ordinary sugar available in the market by making it purer to the extent of 99% whereas in the ordinary sugar available in the market, the purity is limited to 90%. There is also no dispute that all along the writ-petitioner got the benefit of the aforesaid Entry No.35A for which no tax was leviable, but in the year 2007, the concerned officer, for the first time, issued the aforesaid Memo declaring that the Homoeo Globules come within the residuary entry as indicated in Schedule- CA. Mr. Bharadwaj, the learned Advocate appearing on behalf of the petitioners, has strenuously contended before us that the authorities below committed substantial error of law in holding that the item imported by his client 3 to the State of West Bengal, which contains no other material than sugar and at the same time, is manufactured or made in India, would not come within the purview of serial No.35A simply because, the said globules are not used for consumption as ordinary sugar in the market. In other words, according to Mr. Bharadwaj, in view of clear and unambiguous language employed in Entry No.35A, namely, "sugar manufactured or made in India", there is no scope of adding to the aforesaid entry something more for treating the said item as "sugar manufactured and made in India and used for regular consumption". In support of such contention, Mr. Bharadwaj places strong reliance upon the following decisions: 1. The State of Gujarat Vs. Sakarwala Brothers, reported in 1967 STC Vol-XIX, page 24; 2. M/s. Mauri Yeast India Pvt. Ltd. Vs. State of U.P. & Ors., reported in (2008) 14 VST 259 (SC); 3. Aryaverth Chawal Udyog & Ors. Vs. State of U.P. & Ors., reported in (2009) 22 VST 10 ALL. Mrs. Roy, the learned Advocate appearing on behalf of the State- respondent, on the other hand, has opposed the aforesaid contention of Mr.
Bharadwaj and by placing strong reliance upon the decision of the Supreme Court in the case of Alpine Industries Vs. Collector of Central Excise, reported in 4 (2003) STC 9 (SC) submitted that the Tribunal below rightly relied upon the popular meaning of sugar in preference to its scientific or technical meaning. In support of her aforesaid contention, Mrs. Roy also placed strong reliance upon the following two decisions:
1. Satyanarayan Bhandar Vs. State of Orissa & Ors., reported in  5 VST 83 (Orissa);
2. Commissioner of Commercial Tax, Indore Vs. Modern Agency, reported in (2006) 146 STC 1.
Mrs. Roy, therefore, prayed for dismissal of the present writ-application by affirming the order passed by the Tribunal below.
Therefore, the only question that arises for determination in this writ- application is whether the Homoeo Globules containing sugar alone should get the benefit of Entry-35A of Schedule-A of the VAT Act under the heading "sugar manufactured or made in India" or should be placed under the residuary entry.
After hearing the learned counsel for the parties and after going through the materials on record, we find that under the West Bengal Sales Tax Act, 1954 the word "sugar" was placed under serial No.92 with no other suffix or prefix. From 14th December, 1957 and onwards, no tax was payable on such item, the same being subject to Additional Central Excise Duty. 5
When the West Bengal Sales Tax Act, 1994 was introduced, under the serial No.79 of Schedule-1 giving description of tax-free goods, the following item appeared:
"Sugar manufactured or made in India".
Subsequently, when VAT Act came in the year 2003, the aforesaid item was retained as item No.35A and with effect from 1st May, 2005, in addition to the aforesaid item, the words "misri and batasa" were added.
As indicated earlier, the respondent No.2 before us issued the disputed Memo thereby asking the writ-petitioner to change its return by making payment of 12.5% tax by treating the item as a residuary item, as according to him, the goods in question did not fall under any of the entry specified in Schedule-A, or Schedule-B, or Schedule-C or Schedule-D.
In the case of Alpine Industries (Supra), strongly relied upon by Mrs. Roy, the Supreme Court was considering whether the product "Lip salve" manufactured by the appellant therein, which was supplied exclusively to the Defence Department for use of the military personnel in high altitude areas for treatment of sore, inflamed, roughened and cracked lips should be classified as "medicament" under the heading 30.03 of the Central Excise Tariff Act, 1985 or not. In that context, the Supreme Court held that the said item was essentially a preparation for the protection of lips or skin and was not a "medicament" and it 6 conformed to the description "preparation of the care of the skin other than medicaments".
In that context, the Supreme Court observed at paragraph 5 of the judgment that in interpreting tariff entries in a taxation statute like Excise Act, where the primary object is to raise revenue and for that purpose various products are differently classified, the entries are not to be understood in its scientific and technical meaning. According to the Supreme Court, the terms and expressions used in tariff have to be understood by their popular meaning, that is, the meaning that is attached to them by those using the product. In that connection, the Supreme Court relied upon its earlier decision in the case of Shree Baidyanath Ayurved Bhawan Ltd. Vs. Collector of Central Excise, Nagpur (1996) 9 SCC 402 where the manufacturer of an ayurvedic dental cream claimed that the product was a medicinal preparation for dental care. Such claim was overruled by the Supreme Court holding that ordinarily, a medicine is prescribed by a medical practitioner and it is used for a limited time and not every day unless it is so prescribed to deal with a specific disease like diabetes and thus, a tooth paste could not be treated as a medicine.
In that case, the Supreme Court also relied upon its earlier decision in the case of B.P.L. Pharmaceuticals Ltd. Vs. Collector of Central Excise, Vadodara (1995) Supp 3 SCC 1 in which the product with trade name 'selsun' used for treatment of dandruff was held classifiable not as a 'medicament' but as a 7 'cosmetic product' intended for cleansing, beautifying, promoting attractiveness or altering appearance.
We, therefore, find that the said decision in the case of Alpine Industries dealing with the product of 'Lip salve' cannot have any application to a case of Homoeo Globules containing pure sugar which is purer than those available in the market for ordinary consumption and in such a situation, the said item definitely comes under the first item of serial No.35A, namely, "sugar manufactured or made in India".
The position would have been different if while preparing Homoeo Globules, in addition to sugar, some other materials were used and in that case, it could be reasonably argued that Homoeo Globule contained something in addition to sugar and as such, it was a different item.
In the case of Commissioner of Commercial Tax, Indore (Supra) relied upon by Mrs. Roy, the question was whether "Fevicol MR" used for pasting envelopes, papers etc. comes within the Entry No.20 under the heading "paints". Such plea was held to be not tenable and was held to be taxed as stationery article under Entry No.21 of the concerned Act. While arriving at such finding, the Division Bench of Madhya Pradesh High Court held that items are to be understood in their popular meaning and not in their scientific and technical meaning.8
Similarly, in the case of Satyanarayan Bhandar Vs. State of Orissa & Ors. (Supra), another decision relied upon by Mrs. Roy, the question before the Division Bench of the Orissa High Court was whether "Robinson Barley" should be treated to be barley. In such a case, it was pointed out that Robinson Barley might be basically barley but when barley is transformed to Robinson Barley, it goes through various technical processes and various other ingredients like iron and calcium are added and as such, after such addition, the item cannot be said to be a pure barley.
In the case before us, however, by the process of purification, the ordinary sugar is further purified but nothing is added to it and it remains the same sugar in purer form in the form of globule and is admittedly manufactured in India and therefore, clearly comes within the first item of serial No.37A.
In this context, we may profitably refer to the decision of the Supreme Court in the case of the State of Gujarat Vs. Sakarwala Brothers (Supra) where the question was whether patasa, harda and alchidana come within the purview of "sugar" appearing in Entry No.47 of Schedule-A to the Bombay Sales Tax Act, 1959. In that context, the Supreme Court held that the word 'sugar' in Entry No.47 was 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.9
It may be incidentally observed that in the case of State of Gujarat (Supra), the learned Advocate-General, appearing on behalf of the appellant, contended before the Supreme Court that the word 'sugar' in Entry No.47 had been used in the same sense in which it is used in common parlance and that in common parlance, 'patasa', 'harda' and 'alchidana' are not commercially known as and cannot be asked for or obtained as sugar and therefore, those items could not be said to be sugar.
The aforesaid contention was, however, overruled by the Supreme Court. In the case before us if we look at the Schedule of the VAT Act, we find that in various other entries, after describing the main item, the same is further explained or in some cases, some items are specifically excluded. We propose to give some instances.
Item no. 27B is as follows:
"Papad commonly known as papar".
Thus, after the description of the item, it has been further made clear in what name it is commonly known so that there is no confusion about the item.
Item No.35C states as follows:
"Sponge-wood commonly known as sola or solapith".10
Thus, sponge-wood in other form than sola or solapith would not get the benefit of that entry even if the item is basically sponge-wood.
Similarly, item No.36 speaks of "sweetmeat other than cake and pastry but including curd and khoa". Here, the legislature has specifically excluded cake and pastry although otherwise, the same could be brought within the purview of sweetmeat.
Item No.37 mentions about "tender green coconut commonly known as daab" and thus, only that form of the green coconut which is commonly known as daab would get the benefit.
Item No.37A mentions about "textile fabrics made wholly or partly of cotton, rayon, flax, artificial silk or wool manufactured or made in India, other than those specified elsewhere in any other Schedule".
Item No.3 mentions about books and periodicals but excluding account books and diaries. Similarly, item No.4 speaks of bread except pizza-bread, bun or bread containing any type of fruit or vegetables.
But so far as item No.35A is concerned, at the beginning, it was simply "sugar manufactured or made in India" without reference to any restriction or limitation or referring any form of the same and with effect from 1st May, 2005 in addition to the aforesaid item, misri and batasa have been added under the same 11 entry. Therefore, the intention of the legislature was to give benefit of the entry in addition to sugar of any form and shape manufactured or made in India, also to misri and batasa under the said item but it was never the intention to exclude any item of pure sugar if it was in other form than the one available in the market for daily consumption. Misri, it is well-known, is crystallized form of sugar and often, while bringing it to such crystallized form, palm juice is mixed, which is used as home made medicine for common cold and cough. Similarly, Batasa is commonly made of sugar available in special form which is neither round nor square and generally used as offering in the worship of God and batasa is not only of sugar, but also is manufactured by mixing molasses to sugar. The batasa in which molasses are mixed is yellow-coloured while those in which there is no molasses is white-coloured. Thus, after incorporation of those two items under the entry 35A, not only any form of sugar manufactured in India but also sugar mixed with palm juice or molasses, provided those are in the form of misri and batasa respectively, would get the benefit of the said entry notwithstanding the fact that those two items may contain something more than sugar. Misri and batasa added to the entry 35A are independent items and not restricted to sugar alone and thus, need not necessarily be made only from sugar. One cannot, therefore, by any conceivable process of reasoning contend that the yellow-coloured batasa mixed with molasses is not a batasa or misri containing palm juice is not misri within the meaning of entry No.35A when those two additional items are also not restricted by any form of user, colour, 12 contents or form as disclosed in respect of some other items as pointed out earlier.
At this juncture, it will be profitable to refer to the decision of the Supreme Court in the case of M/s. Mauri Yeast India Pvt. Ltd. Vs. State of U.P. & Ors., reported in (2008) 14VST 259 SC where the question was whether yeast comes within the head "chemical". It was contended on behalf of the State that yeast being a 'living organism' could not be a 'chemical'.
In that context, the Supreme Court held that if there is a conflict between two entries one leading to an opinion that it comes within the purview of a tariff entry and another the residuary entry, the former should be preferred. In that context, the Supreme Court further held that unless the department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item. The well-settled principle of law that when two views are possible, one which favours the assessee should be adopted was reiterated in that case.
Applying the aforesaid principles to the facts of the present case, we have no doubt to conclude that Homoeo Globules containing only sugar in purer form than the ordinary sugar available in market cannot be placed under residuary heading when there is a specific entry under Section 35A to the effect "sugar manufactured or made in India" without any reference to any common man's 13 description, density, form, shape, colour or mode of user thereof as indicated in various other entries.
Where the statute, in respect of some of the items of the Schedule, has explained those by further describing how it is popularly described by a common man and in respect of some others, no such explanation has been given, the principle of applying "popular meaning" theory as suggested by Mrs. Roy to the latter ones is not tenable. In case of latter types of the items where there is no explanation of the items, the literal meaning should be given.
We, therefore, set aside the order passed by the Tribunal as also the Memo issued by the respondent No.2 and hold that the Homoeo Globule imported by the writ-petitioner is entitled to the benefit of item No.35A for which no tax is payable and direct the assessing authority to act accordingly.
In the facts and circumstances, there will be, however, no order as to costs.
(Bhaskar Bhattacharya, J.) I agree.
(Sambuddha Chakrabarti, J.) 14