Allahabad High Court
The Commissioner, Trade Tax vs Ankit Traders on 29 October, 2007
Author: Rajes Kumar
Bench: Rajes Kumar
JUDGMENT Rajes Kumar, J.
1. Present to revisions under Section 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") are directed against the order of the Tribunal dated 7th April, 2000 relating to the assessment years, 1994-95 and 1995-96.
2. Dealer-opposite party (hereinafter referred to as "Dealer") was carrying on the business of manufacture and sales of cattle feed which consists of 90 percent molasses, 2 percent Urea, 1 percent sewar, 5 percent Ordinary salt and 2 percent black salt. In the returns filed by the dealer, exemption on the turnover of cattle feed was claimed upto September 1994 and thereafter on the turnover of such cattle feed, 5 percent tax was admitted and paid. However, during the course of the assessment proceeding, dealer disputed the taxability on the cattle feed even for the period after 1.10.1994. The claim of the dealer was that after 1.10.1994, "balanced cattle feed" was made taxable under the Notification No. TT-2-3403/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994, while the cattle feed manufactured and sold by it was not balanced cattle feed. Submission of the dealer was that the cattle feed sold by the dealer did not contain any vitamin and was provided to cattle, to make the ordinary food tasty. Assessing authority has not accepted the plea of the dealer and levied the tax on such cattle feed on the turnover after 1.10.1994 under the aforesaid Notification No. TT-2-3403/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 at the rate of 5 percent treating it as balanced cattle feed. Being aggrieved by the order of the assessing authority, dealer filed appeals before the Deputy Commissioner (Appeals), Trade Tax, Gorakhpur, Deputy Commissioner (Appeals), Trade Tax, Gorakhpur vide order dated 20th January, 1999 dismissed both the appeals. Being aggrieved by the order, dealer further filed second appeals before the Tribunal. Tribunal by the impugned order allowed the appeals and granted exemption on the turnover of such cattle feed even after 1.10.1994. Tribunal held that under the Notification No. TT-2-3401/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 and Notification No. TT-2-1381/XI-9(167)/95-U.P. Act-15-48-Order-96 dated 6.6.1996, balanced cattle feed was excluded from the entry "Cattle Fodder" and the same was made taxable under the Notification No. TT-2-3403/XI-9(1 16)-94-U.P. Act 15-48-Order-94 dated 1.10.1994. Tribunal held that the cattle feed manufactured by the dealer was not balanced cattle feed and was provided to cattle to increase the taste of the ordinary food and, therefore, was not taxable being still covered under the entry "Cattle Fodder". Tribunal held that the cattle feed manufactured by the dealer did not contain any vitamin.
3. Heard Sri B. K. Pandey, learned Standing Counsel and Sri Kunwar Saksena, learned Counsel for the dealer-opposite party.
4. Learned Standing Counsel submitted that the Tribunal has erred in holding that the cattle feed manufactured by the dealer was not balanced cattle feed and was not liable to tax after 1.10.1994. He submitted that from the entry of Notification No. TT-2-3401/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994, cattle feed has been excluded from cattle fodder. The "cattle feed" which was excluded means "cattle feed" in all forms and nature, including balanced cattle feed. Therefore, all kinds of cattle feed which were earlier held to be covered under cattle fodder, being fed by the cattle, in various decisions of this Court and Apex Court have been excluded from the entry "cattle fodder". He submitted that after 1.1,0.1994 under Notification No. TT-2-3403/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994, balanced cattle feed has been made taxable at the rate of 5 percent and other cattle feed are liable to tax as an unclassified item at the rate of 8 percent.
5. Learned Counsel for the dealer submitted that by Notification No. TT-2-3401/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 from the entry "cattle fodder", balanced cattle feed has only been excluded. He submitted that the word "balance", which has been used prior to poultry feed also qualifies cattle feed and all other cattle feed has not been excluded w. e. f. 1.10.1994 and by the Notification No. TT-2-3403/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1. 10.1994, balanced cattle feed has only been made taxable, therefore, cattle feed other than balanced cattle feed was still exempted from tax falls under the entry "cattle fodder", in view of the decisions of this Court in the case of Commissioner of Trade Tax v. Paras Ram Lakshi Ram reported in (2005) 41 STR 42 and in the case of Cattle Feed Plant, Pradeshik Cooperative Diary Federation Ltd., Meerut v. Commissioner of Trade tax reported in (2005) 42 STR 819. He submitted that the decision of the learned Single Judge of this Court in the case of Cattle Feed Plant, Pradeshik Cooperative Diary Federation Ltd., Meerut v. Commissioner of Trade tax (supra) has been accepted and followed by the Division Bench in Writ Petition No. 164 of 1989 Liptons India Ltd v. State of U.P. and Ors. decided on 17.04.2007. He submitted that the Division Bench of this Court in the case of Friends Medicon (P) Ltd v. State of U.P. and Ors. reported in 1997 UPTC 427 has held that the cattle feed which increases productivity and consist of concentrate and vitamin are balanced cattle feed. He submitted that unless the feed contains vitamin, it cannot be balanced cattle feed. He further submitted that feed manufactured by the dealer did not contain vitamins and it mainly contains molasses and arc mixed with normal food of the cattle to increase the taste and was not provided as balanced cattle feed to increase the productivity.
6. Having heard the learned Counsel for the parties, I have perused the order of the Tribunal and the authorities below.
To adjudicate the issue involved, it is necessary to refer the relevant Notifications.
Notification No. ST-II-3714/X-6(1)/85-U.P. Act 15/48-Order-85 dated 5.6.1985.
(Published in U.P. Gazette, dated 5.6.1985).
In exercise of the powers under Clause (a) of Section 4 of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act No. XV of 1948), read with Section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904), the Governor is pleased to make, with effect from June 6, 1985, the following amendments in Government notification No. ST-2-7038/X-7(23)-83-U.P. Act XV/48-Order-85, dated January 31, 1985:
AMENDMENTS In the Schedule to the aforesaid notification, (1) for the existing entries in column 2 against serial numbers 7, 10, 43 and 53, the following entries shall respectively be substituted, namely:
10. Cattle fodder including green fodder, chuni, bhusi, chhilka, Chokar, javi (popularly known as ghurjai), gowar, de-oiled oil cake, de-oiled rice polish, de-oiled rice bran or de-oiled rice husk, but not including oil cake (khali), rice polish, rice bran or rice husk.
la[;k O;k0 d0&2&3401@X;kjg&9¼116½@94&m0iz0vf/k0&15&48&vkns'k&94 y[kuÅ] 1 vDVwcj] 1994 foKfIr fofo/k mRrj izns'k lk/kkj.k [k.M vf/kfu;e] 1904 ¼mRrj izns'k vf/kfu;e la[;k 1 lu~ 1904½ dh /kkjk 21 ds lkFk ifBr mRrj izns'k O;kikj dj ,sDV] 1948 ¼mRrj izns'k vf/kfu;e la[;k 15 lu~ 1948½ dh /kkjk 4 ds [k.M ¼d½ ds v/khu 'kfDr dk iz;ksx djds] jkT;iky le;≤ ij ;Fkkla'kksf/kr ljdkjh foKfIr la[;k fo0 d0&267038@nl&7¼23½@83 m0iz0 vf/k0&15&48 vkns'k&85 fnukad 31 tuojh] 1985 esa 1 vDVwcj] 1994 ls fuEufyf[kr la'kks/ku djrs gS% la'kks/ku mi;qZDr foKfIr dh vuqlwph esa& ¼,d½ ---
¼nks½ ---
¼rhu½ dze la[;k 10 dh izfof"V ds LFkku ij fuEufyf[kr izfof"V j[k nh tk,xh] vFkkZr% 10& i'kqvks dk pkjk ftlds vUrZxr gjk pkjk] pwuh] Hkwlh] fNydk] pksdj] tch] Xokj] rsyjfgr [kyh] rsyjfgr pkoy dk pw.kZ] rsyjfgr pkoy dh duh ;k rsy jfgr pkoy dk Hkwlh lfEefyr gS fdUrq [kyh] pkoy dk pw.kZ ¼jkbl ikfy'k½ pkoy dh duh] pkoy dh Hkwlh ;k larqfyr dqDdqV pkjk] i'kqvks dk pkjk] ;k eNfy;ksa dk pkjk lfEefyr ugh gS A Notification No. TT-2-3401/XI-9 (116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 In exercise of the powers under Clause (a) of Section, 4 of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act No. 15 of 1948), read with Section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 1904), the Governor is pleased to make, with effect from October 1, 1994, the following amendment in Government notification No. ST-2-7038/X-7(23)-83-U.P. Act 15-48-Order-85, dated January 31, 1985 as amended from time to time.
AMENDMENTS In the Schedule to the aforesaid notification,
(i)-----
(ii)-----
(iii) for entry at serial no. 10, the following entry shall be substituted, namely:
10. Cattle fodder including green fodder, chuni, bhusi, chhilka, Chokar, javi, gowar, de-oiled cake, de-oiled rice polish, de-oiled rice bran or de-oiled rice husk, but excluding oil cake, rice polish, rice bran, rice husk or balanced poultry feed, cattle feed or fish feed.
la[;k O;k0 d0&2&3403@X;kjg&9¼116½@94&m0iz0vf/k0&15&48&vkns'k&94 y[kuÅ] 1 vDVwcj] 1994 foKfIr fofo/k mRrj izns'k lk/kkj.k [k.M vf/kfu;e] 1904 ¼mRrj izns'k vf/kfu;e la[;k 1 lu~ 1904½ dh /kkjk 21 ds lkFk ifBr mRrj izns'k O;kikj dj ,sDV] 1948 ¼mRrj izns'k vf/kfu;e la[;k 15 lu~ 1948½ dh /kkjk 3&d dh mi/kkjk ¼1½ ds [k.M ¼M½ ds izfrcU/kkRed [k.M ds v/khu vf/kdkjks dk iz;ksx djds jkT;iky le; & le; ij ;Fkkla'kksf/kr ljdkjh foKfIr la[;k ,l0Vh0&25785@nl¼1½@80&m0iz0 vf/k0&15&48&vkns'k&81] fnukad 7 flrEcj] 1981 esa fuEufyf[kr la'kks/ku djrs gS% la'kks/ku ¼1½ ---
¼2½ ---
¼3½ ---
¼4½ ---
56 i'kqvks dk larqfyr pkjk dqDdqV pkjk] ;k eNfy;ksa dk pkjk fu0;k0vk0 4 izfr'kr Notification No. TT-2-3403/XI-9(116)-94-U.P. Act 15-48-Oder-94 dated 1.10.1994.
In exercise of the powers under proviso to Clause (e) of Sub-section (1) of Section 3-A of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. 15 of 1948), read with Section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No.1 of 1904), the Governor is pleased to make the following amendment in Government Notification No. ST-II-5785/X-10 (l)/8-U.P. Act 15-48-Order-81, dated September 7, 1981, as amended from time to time;
(1) ...
(2) ...
(3) ...
(4) ...
56. Balanced cattle feed, poultry feed or fish feed M or I 4 percent.
7. The question for consideration in the present revisions is whether the cattle feed manufactured and sold by the dealer consists Of 90 percent molasses, 2 percent Urea, 1 percent sewar, 5 percent ordinary salt and 2 percent black salt is exempted from tax after 1.10.1994 or liable to tax after 1.10.1994. The issues for consideration are as follows:
1. Whether from the Notification No. TT-2-3401/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 from the entry "Cattle Fodder" only balanced cattle feed has been excluded or all kinds of cattle feed has been excluded which also includes the balanced cattle feed?.
2. Whether the cattle feed manufactured by the dealer is still covered under the entry "Cattle Fodder" under the Notification No TT-2-3401/XI-9 (116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 and was exempted from tax?
3. Whether the cattle feed manufactured by the dealer is balanced cattle feed and liable to tax under the Notification No. TT-2-3403/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 at the rate of 5 percent or liable to tax as an unclassified item if not balanced cattle feed?.
Issue No. 1 and 2.
8. A bare perusal of Notification No. TT-2-3401/XI-9 (116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 referred herein above both in English and Hindi version reveals that the cattle feed has been excluded from the entry "Cattle Fodder". The word "Cattle feed" is after "balanced poultry feed" therefore, it is difficult to accept that the word "balanced" which is along with poultry feed also qualifies cattle feed and the exclusion confines to balanced cattle feed only. The language of the entry, is plan and unambiguous and there is no reason to give any other interpretation and to add the word "balanced" with the cattle feed which was not there. Further after Balanced poultry feed there is a "Comma" and then word 'Cattle Feed' is mentioned, thus means that 'Balanced Poultry Feed' is one word and 'Cattle Feed' is separate and both are independent. The aforesaid view is supported by the decision of the Apex Court in the case of Shree Durga Distributors v. State of Karnataka reported in 2007 AIR SCW, 2879 Paragraph-4. The object of the notification also appears to be to exclude all "cattle feed" which was in concentrate form, or balanced cattle feed or in any other form which were held covered under the entry "Cattle Fodder" being fed by the cattle by catena of decisions by this court, others courts and by the Apex Court. After the exclusion of the cattle feed entry "Cattle Fodder", the exemption on the turnover of cattle feed has been withdrawn with effect from 1.10.1994. The "cattle feed" s been excluded from the entry "Cattle Fodder" includes all kinds of and all forms and nature of cattle feed including the balanced cattle feed. Balanced cattle feed has been classified and made taxable at the rate of 5 percent under the Notification No. TT-2-3403/XI-9(116)-94-U.P. Act 15-48-Order-94 dated 1.10.1994 and other cattle feed would be liable to tax as an unclassified item. In support of the aforesaid view, it is relevant to refer one paragraph of the Division Bench of this Court in Writ Petition No. 164 of 1989 Liptons India Ltd v. State of U.P. and Ors.
The assessment years involved in this case are 1985-86, 1988-89 and 1989-90. All these assessment years are prior to the amendment dated 10.10.1994 by notification No. TT-3041 whereunder "cattle feed" was excluded from "cattle fodder" as mentioned in the entry at Serial No. 10 of the notification dated 5.6.1985.
9. In the Case of Swadeshi Polytex Limited v. Income Tax Officer reported in 1980 UPTC 1084, the Division Bench of this Court held as follows:
It is well established that where the language of a section is plain and unambiguous, it is not open to courts to read into it limitation which are not there based on a priority reasoning as to the probable intension of the legislature. Such intention can be gathered from the words actually used in the legislature and what is unexpressed has the same value as to what is unintended.
10. In the case of Commissioner of Sales Tax, Gujarat v. Union Medical Agency reported in 1981 UPTC 520, the Apex Court held as follows:
If the meaning of the section is plain, it is to be applied whatever the result
11. In the case of Assessing Authority cum-Excise & Taxation Officer, Gurgaon and Anr. v. East India Cotton Mfg. Co. Ltd., Faridabad reported in 1981 UPTC 1319, the Apex Court held as follows:
It is also a well settled rule of interpretation that a statute must be construed according to its plain language and neither should anything be added or subtracted unless there are adequate grounds to justify the inference that the legislature clearly so intended.
12. In the case of Commissioner of Income Tax, Orissa and Ors. v. N.C. Budharaja & Co. and Anr. reported in 1993 UPTC 1335, the Apex Court held as follows:
The principle of a liberal interpretation which advances the purpose and object underlying the provision cannot be carried to the extent of doing violence to the plain and simple language used in the enactment. It would not be reasonable or permissible for the Court to re-write the section or substitute words of its own for the actual words employed by the Legislature in the name of giving effect to the supposed underlying object. After all, the underlying object of any provision has to be gathered on a reasonable interpretation or the language employed by the Legislature.
13. In the case of Gurudevdatta Vksss Maryadit and Ors. v. State of Maharashtra and Ors. reported in (2001) 4 SCC 534, the Apex Court held as follows:
Further we wish to clarify that it is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinarly or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the courts are bound to give effect to that meaning, irrespective of the consequences. It is said that the words themselves best declare the intention of the law-giver. The courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surpluses, if they can have a proper application in circumstances conceivable within the contemplation of the statute.
In this view of the matter, I am of the view that the "cattle feed" manufactured by the dealer is specifically excluded from the entry "Cattle Fodder" and, therefore, not exempted from tax and liable to tax Issue No. 3.
14. In the case of Friends Medicon (P) Ltd v. State of U.P. and Ors. (supra), the Division Bench of this Court held as follows:
The words "poultry feed" has acquired a definite connotation in livestock farming and so also has the word 'concentrates' and whereas the feed simplicter is essential for the maintenance of poultry, the concentrates, that is, vitamins in the food stuff enable the poultry to maintain energy, to perform the vital process of life and provide the material to replace the essential tissues, breakdown of which occurs in the body continuously. From the materials available on the subject, it is by now clear that all foodstuffs are composed of water and organic and, mineral matters. Organic matter is composed of proteins, ats, crude fibre and soluble carbohydrates. Besides the above, there are certain substances known as vitamins, which are considered to be essential for the proper nutrition of farm stock. The ration of an animal may be divided for convenience into two parts: (1) maintenance ration, viz., the portion of the diet which just enables the animal at rest to carry on the essential processes of life, such as breathing and circulation of blood, without either gain or loss of weight; and (2) feed supplied over and above the maintenance requirement for augmenting the production for growth or fattening, for production of milk or in the case of poultry for augmenting egg laying capacity.
It is a matter of common knowledge that in the present days when maintenance of the poultry has become so costly, the poultry is not kept in a farm in a State of non-production. To make the poultry financially viable, it is but necessary to supply a balanced poultry feed to increase the production of eggs or fat and growth if the poultry is kept for consumption of its meat. The feed consists not only of that concentrates, which are essential for the maintenance of lift but also other concentrates, which provide the energy required for production and vitamins are considered essential for the proper nutrition of farm stock and some of the vitamins like Vitamin A and D have to be supplied to the animals through their feed. If this concept of poultry is borne in mind, it will become clear that the expression "balanced poultry feeds" is not understood by the people conversant with keeping the poultry as merely consisting of ration for maintenance but also as comprehending ration for production purposes.
The feed simpliciter, that is, ration for maintenance cannot be a balanced poultry feed which expression includes a feed full of vitamins and all other ingredients, which augment the production of eggs in the case of poultry.
The assessing authority himself took the view that the petitioner deal in feed supplements, that is, the concentrates which are supplied to keep the poultry in a good state of production and which ensure over all improvement in the general health of the poultry. From these facts, it is manifest that without concentrates, the ordinary feed which is given only for maintenance purposes, cannot be said to be a balanced poultry feed. To make the poultry feed, a balanced poultry feed, it is essential to include the vitamins or Concentrates. So, it is addition of concentrates in the poultry feed which makes it a balanced poultry feed. Short of vitamins or the concentrates, the poultry feed can not be said to be a balanced poultry feed.
15. In the aforesaid case, the Division Bench of this Court, held that the feed simpliciter, that is, ration for maintenance cannot be a balanced poultry feed which expression includes a feed full of vitamins and all other ingredients, which augment the production of eggs in the case of poultry. Further, it has been held that to make the poultry feed, a balanced poultry feed, it is essential to include the vitamins or concentrates. So, it is addition of concentrates in the poultry feed which makes it a balanced poultry feed. Short of vitamins or the concentrates, the poultry feed cannot be said to be a balanced poultry feed. It means that for a balanced feed, it is essential that there should be vitamins and concentrates which augment the production. Therefore, if in, feeds there are such concentrates which augment the production, it will be a balanced cattle feed even though, there are no vitamin. It may be mentioned here that the presence of vitamins by name is not essential. It may be possible that vitamins are available in the constituent of the product. The nature of the constituent can only be worked out by chemical analysis. In the present case, without chemical analysis, opinion has been formed that there was no vitamins. Further, Tribunal has also not considered whether the cattle feed manufactured by the dealer increases the production or not. This aspect of the matter has not been examined.
16. In this view of the matter, I am of the opinion, that the matter requires further adjudication. It is to be enquired whether the constituents of the product includes vitamins, concentrate and increases productivity. This is possible only by chemical analysis, which is to be carried on by the experts. On the facts and circumstances, Tribunal is directed to get the product chemically examined and get the expert opinion whether it increases the productivity and to decide whether it. It the balanced cattle feed or other than balanced cattle feed.
17. Decision on issue No. 3 depends upon the result of the chemical analysis and the opinion of the expert as to whether the cattle feed manufactured by the dealer is a balanced cattle feed or other than the balanced cattle feed. It will be open to the Tribunal to adjudicate the aforesaid questions at its own stage or if, Tribunal may like the matter may be send back to the assessing officer for adjudication.
18. In the result, both the revisions are allowed. The order of the Tribunal is set aside and the matter is remanded back to the Tribunal to decide the appeals afresh in the light of the observations made above.