Madhya Pradesh High Court
Commissioner Of Sales Tax vs Triveni Sheet Glass Works Ltd. And Ors. on 12 October, 1989
Equivalent citations: [1990]76STC308(MP)
JUDGMENT
G.G. Sohani, Ag. C.J.
1. The order in this case will also govern the disposal of Miscellaneous Civil Cases Nos. 79, 80, 81 and 92, all of 1984.
2. These are all references under Section 44 of the Madhya Pradesh General Sales Tax Act, 1958 (hereinafter referred to as "the Act"). The question of law, which has been referred in all these cases by the Board of Revenue to this Court for its opinion is as follows :
"Whether, on the facts and in the circumstances of the case, glass sheets will be assessed to tax under entry No. 1 of Part VI of Schedule II appended to the M.P. General Sales Tax Act, 1958 and not under entry No. 26 of Part II of Schedule II ?"
3. Briefly, the facts giving rise to these references are that while framing assessment of the assessees, who had effected sale of glass sheets, the assessing authority rejected the contention advanced on behalf of the assessees that assessment should be made under the residuary entry and not under entry No. 26 of Part II of Schedule II of the Act. The appeals preferred by the assessees before the appellate authority were dismissed. On further appeal, the Board of Revenue held that glass sheets would be exigible to tax under the residuary entry and not under entry No. 26 of Part II of Schedule II. Aggrieved by the order passed by the Board of Revenue, the department sought reference and it is at the instance of the department that the aforesaid references have been made.
4. At the time of hearing, the Division Bench noted that in respect of the question referred by the Board, there were conflicting decisions of this Court reported in Commissioner of Sales Tax, Madhya Pradesh v. Bombay Glass House [1986] 63 STC 350, and Commissioner of Sales Tax, M.P. v. Glass & Tiles House [1989] 74 STC 26. The Division Bench, therefore, referred the matter to a Full Bench and that is how these references have come up before us for hearing.
5. Before we proceed to appreciate the contentions advanced on behalf of the parties, it would be useful to refer to entry No. 26 (now entry No. 36) of Part II of Schedule II of the Act. That entry is as follows :
"All types of crockery, goods made of china and tamchina, goods made of glass and glassware but excluding glass chimneys of hurricane lanterns and kerosene lamps."
The short question for consideration is whether glass sheets fall within the ambit of the expression "goods made of glass and glassware."
6. Now, the expression "goods made of glass and glassware" is wide enough to include not only such articles made of glass as are known as glassware in the popular sense but all goods and articles made out of glass. The decisions reported in Commissioner of Sales Tax v. Dawoodbhoy M. Tayabally [1975] 36 STC 291 (Bom), Commissioner of Sales Tax, Delhi Administration v. Baluja Glass Company [1980] 46 STC 17 (Delhi), Indo International Industries v. Commissioner of Sales Tax, U.P. [1981] 47 STC 359 (SC) and Commissioner of Sales Tax v. Mohd. Ayub & Sons [1982] 50 STC 187 (All.) and relied upon by the learned counsel for the assessee, deal with the ambit of the expression "glassware" alone. It is true that a glass sheet cannot be held to be glassware in the popular sense, as held in the aforesaid decisions but the question that still remains for consideration is whether glass sheets can be held to be goods made of glass.
7. There is undoubtedly distinction between "glass" and "goods or articles made of glass". On the basis of material placed before it, the Board has observed as follows :
"Glass is produced by fusing together the ingredients (oxides of silicon, boron, or phosphorus, etc.) and cooling the product rapidly to prevent crystallisation. The hot red glass in liquid form may be blown to produce articles like cups, water jugs, electric lamp shells, bottle chimneys and other crockery items, etc., or it may be cast into other usable shapes. If this liquid is cooled in the mass form or in the sheet form, then it will be treated as glass itself. It will be a raw material, which may be used for the manufacture of new goods. Glass sheets may be used for manufacturing goods, like aquarium, or lens or a looking glass, etc., etc. It is these manufactured articles, which would be regarded as 'goods made of glass' and not the sheet glass, which, in popular parlance, is the raw material for production of goods made of glass."
Therefore, a glass sheet, as found by the Board, is "glass simpliciter". While considering the question as to whether a glass mirror can be classified as "glassware", the Supreme Court observed in Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 63 STC 322, that a glass sheet undergoes a complete transformation when it emerges as a glass mirror. What was a piece of glass simpliciter, becomes another commercial product. Glass sheet is, therefore, a primary product "glass simpliciter" which can be used for producing "goods or articles made of glass". It is significant to note that whenever the legislature intended to include sheets of a primary product along with goods made of that product, in any entry, the legislature expressly made reference to sheets of that product as is evident from perusal of certain entries in Part III of the Schedule II of the Act. Entry No. 4 is "sheets, fabrics and goods made of plastic". Entry No, 12 is "asbestos sheets and goods made thereof". In entry No. 26 of Part II (now numbered as 36), there is, however, no mention of sheets along with "goods made of glass". The legislative intent, therefore, is clear that as regards glass, the primary product is not clubbed with goods and articles made of that primary product. The decisions reported in Commissioner of Sales Tax, Madhya Pradesh v. Mohanlal Ramkisan Nathani [1955] 6 STC 136. (Nag), Tribuwandas Gulabchand and Brothers v. State of Maharashtra [1965] 16 STC 452 (Bom) and Commissioner of Sales Tax v. Bombay Glass House [1986] 63 STC 350 (MP), with respect, do not take into account that a glass sheet in common parlance is "glass simpliciter" and is a primary product used for producing articles or goods made of glass. Glass sheets, therefore, cannot be equated with goods or articles made of glass. In Commissioner of Sales Tax v. Polychem Ltd. [1977] 39 STC 315, the question which arose for consideration before the Bombay High Court was whether polynite sheets used for making toys should be regarded as "plastics" or goods made from plastics. It was held that polynite sheets must be regarded as "plastics" and not goods made from plastics. We respectfully agree with that decision. In oar opinion, therefore, the decision in [1986] 63 STC 350 (MP) (Commissioner of Sales Tax v. Bombay Glass House), does not lay down correct law.
8. For all these reasons, our answer to the question referred by the Board is that on the facts and in the circumstances of the case, glass sheets do not fall under entry No. 26 of Part II of Schedule II of the Act but they fall under entry No. 1 of Part VI of Schedule II of the Act. The reference is accordingly answered in favour of the assessee and against the department. In the circumstances of the case, parties shall bear their own costs of this reference.