Andhra HC (Pre-Telangana)
Venkataramana Hatcheries Pvt. Ltd. vs Commercial Tax Officer, Company ... on 24 April, 1987
Equivalent citations: [1987]66STC154(AP)
JUDGMENT A. Lakshmana Rao, J.
1. Whether chicks are goods covered by entry 54 in List II of the Seventh Schedule to the Constitution of India, and if so, whether they could be treated as live-stock under sub-rule (2) of the rule 5 of the Andhra Pradesh General Sales Tax Rules, 1957 (hereinafter referred to as "the Rules") for the purpose of imposition of sales tax, is the common question that arises for consideration in all these writ petitions. They are therefore disposed of by a common judgment :
The petitioners in all these writ petitions are hatcheries engaged in the business of hatching and selling chicks. They are registered dealers under the Andhra Pradesh General Sales Tax Act, 1957 (for short "the Act"). All of them were assessed to sales tax on the turnover relating to the sale of one day old chicks treating them as general goods. Aggrieved by those order these writ petitions were filed.
"Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92-A of List I" is the entry No. 54 in List II of the Seventh Schedule to the Constitution of India. The word "goods" is defined in clause (12) of article 366 :
"'goods' includes all materials, commodities and articles."
2. The thrust of the argument advanced on behalf of the petitioners was that the State Legislature was not competent to make law levying tax on the sale or purchase of animate objects, namely, live-stock. The basis of this argument was that the materials, commodities and articles which constitute goods as defined in clause (12) of article 366 of the Constitution of India include only the inanimate object but not the live-stock.
3. In the New Webster's Encyclopaedic Dictionary (1980 edition) the meaning of the term "commodity" is given as :
"What is useful; specifically, an article of merchandise; anything movable that is bought and sold, as goods, wares, produce of land and manufacture."
4. The Oxford English Dictionary describes "commodity" as :
"A thing of use or advantage to mankind; useful products, material advantages, elements of wealth.
A kind of thing produced for use or sale, an article of commerce, an object of trade. Anything that one 'trades' are deals in."
5. It would be useful to refer to some of the legal dictionaries where the meaning of the word "commodity" had been given.
6. In "Words and Phrases Legally defined" (second edition) "commodity" is specified as one of extensive meaning denoting anything that is useful, convenient or serviceable.
7. A "commodity" is anything that is usable for a purpose.
Law Dictionary by James A. Ballentine (1948 edition).
8. The word "commodity" is ordinarily used in a commercial sense of any movable and tangible thing that is ordinarily produced or used as a subject of barter or sale.
Bouvier's Law Dictionary (... Edition, Third Revision).
9. Commodity is a broader term than merchandise and may mean almost any description of article called movable or personal estate.
10. Thus "commodity" is a term used in a commercial sense and means any movable and tangible thing that is ordinarily produced or used as a subject of sale.
11. The use of the word "includes" in the definition of the expression "goods" in clause (12) of article 366 gives a clear indication that the definition is not intended to be exhaustive. Long before the Constitution of India was enacted, there were several sales tax laws in the country where "goods" was defined to mean all kinds of movable property. Parliament was well aware of the several sales tax laws in existence at the time the Constitution of India was drafted and adopted and it did not intend to restrict the meaning of the word "goods" by using the expression "means" in the definition clause. Instead, it used the term "includes". Had the Parliament intended to restrict the meaning of the word "goods" only to inanimate objects or things, nothing could have precluded it from stating so. Instead of doing that, the Parliament used the word "includes" in the definition clause thereby expressing its intention that the definition was not intended to be exhaustive.
12. In construing a word used in a legislative entry we have to remember that the word should be given the wides meaning so as to comprehend all ancillary or subsidiary matters as Gwyer, C.J., had observed in United Provinces v. Mst. Atiqa Begum AIR 1941 FC 16 at page 25 :
"None of the items in the Lists is to be read in a narrow or restricted sense, and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. I deprecate any attempt to enumerate in advance all the matters which are to be included under any of the more general descriptions; it will be sufficient and much wiser to determine each case as and when it comes before this court."
13. That observation was quoted with approval by the Constitution Bench of the Supreme Court in Banarasi Dass v. Wealth-tax Officer .
14. In Commissioner of Sales Tax v. Madhya Pradesh Electricity Board interpreting the word "goods" occurring in the C.P. and Berar Sales Tax Act, 1947, and the Madhya Pradesh General Sales Tax Act, 1958, the Supreme Court held that electric energy was goods. In coming to that conclusion the learned Judges observed at page 194 :
"The term 'movable property' when considered with reference to 'goods' as defined for the purposes of sales tax cannot be taken in a narrow sense and merely because electric energy is not tangible or cannot be moved or touched like, for instance, a piece of wood or a book it cannot cease to be movable property when it has all the attributes of such property."
15. The term "commodity" is broader in content than "merchandise" and it is a word used in a commercial sense denoting any movable and tangible thing. There can be no dispute that chicks are movable things produced for the purpose of sale. Thus they are movable property which can be sold or purchased as any other movable property.
16. Dealing with the scope and ambit of the definition of "goods" in clause (12) of article 366 of the Constitution of India, the Division Bench of the Madras High Court held in Meiyappan v. Commissioner of Commercial Taxes [1967] 20 STC 115 :
"Giving the matter our careful attention, we find it difficult to agree with the argument of the learned for the petitioner that 'goods' has been defined in the relevant article of the Constitution in an exhaustive manner. It may be that in so far as incorporeal movable property is concerned, there might be difficulties in levying the appropriate tax, such as those contemplated in entry 30, 84 or 89 of List I, or entry 51, 52 or 56 of List II of the Seventh Schedule of the Constitution. But that cannot control the definition in any way. Notwithstanding the fact that the expressions employed in defining 'goods' embody only the natural sense of the word, we are unable to hold that 'goods' as defined has been restrictively defined and to comprise only materials, commodities and articles, that is to say, concrete goods. We would require far stronger reasons before we can accept the contention that the Constitution has imposed a restriction on the power to legislate in respect of sales of one class of movable property. In so far as the argument purports to establish that the definition of 'goods' in the Madras General Sales Tax Act as meaning all kinds of movable property goes beyond the meaning of the expression given to it by the Constitution and for that reason the legislation in respect of sale or purchase of goods other than concrete goods is ultra vires, we are unable to agree with that contention."
17. Clause (12) of article 366 was construed by a learned single Judge of this Court in K. Srinivasulu v. Deputy Commercial Tax Officer [1975] 35 STC 262. In that case Lakshmaiah, J., held :
"Clause (12) of article 366 defines goods as including all materials, commodities and articles. The learned counsel contended that the expression 'goods' do not take within their ambit the expression 'live-stock'. The expression 'live-stock' though constitute movable property still it cannot be considered to be goods as defined by the Act and the expression 'goods' do not include, according to the learned counsel, animate chattel which no doubt is considered as movable property. No authority was cited by the learned counsel in support of their contention that live-stock are not movable property as defined in the General Clauses Act or goods within the meaning of the expression as defied in the Act. The expression 'movable property' occurring in the Act shall have to be understood in the light of the meaning given to the expression 'movable property' in section 3(19) of the Andhra Pradesh General Clauses Act, 1891. The expression 'movable property' is defined in the General Clauses Act as meaning property of every description except immovable property. I am not able to find any juridical basis for the proposition that animate objects such as live-stock could not come within the definition of movable property. The expression 'goods', as has already been noticed, is defined by the Act to mean all kinds of movable property. 'All kinds of movable property' is comprehensive enough to include within its ambit both animate as well as inanimate kinds of movable properties. The expression 'goods' as defined by article 366, clause (12), is an inclusive definition and the subject-matter with respect to which the State Legislature has been given power to make laws by way of levying tax under entry 54 of List II of the Seventh Schedule is taxes on the sale or purchase of goods. I am, therefore, of the opinion that live-stock is movable property and the expression 'goods' as defined in the Act includes all kinds of movable property and that expression takes within its ambit live-stock, which is admittedly movable property. In view of this, I do not propose to refer to the decisions cited arising from the Sales of Goods Act and other kinds of enactments."
18. Having regard to the expressions used in the definition of "goods" and the scope and ambit of entry 54 in List II of the Seventh Schedule to the Constitution of India, we do not find force in the contention of the learned counsel for the petitioners that chicks are not "goods" within the meaning of that word in entry 54. Chicks being the tangible movable things produced by the petitioners for the purpose of sale, the law authorising levy of tax on the sale or purchase of such goods is quite legal and valid.
19. It was however urged that chicks were not liable to be treated as general goods having regard to the provisions of sub-rule (2) of rule 5 of the Rules and they were to be treated as live-stock. If that were so, tax was leviable on the turnover of a dealer computed on the basis of the amount paid by such dealer as a consideration for their purchase and the petitioners were not liable to pay tax at the sale point.
20. Rule 5(2) provides that in respect of the goods mentioned therein, the turnover of a dealer shall be the total amount payable by him as the consideration for the purchase of the goods. One of the goods mentioned therein was "live-stock, that is to say, all domestic animals such as oxen, bulls, cows, buffaloes, goats, sheep, horses, etc."
21. Relying on that provision it was vehemently urged that chicks were live-stock and they could not be treated as general goods. Having regard to the word "etc." following the words oxen, bulls, cows, buffaloes, goats, sheep and horses, it is contended by the learned counsel for the petitioners that the enumerated items are not intended to be exhaustive and the word "etc." suggests that chicks must be construed ejusdem generis with the words oxen, bulls, cows, buffaloes, goats, sheep, horses, etc. On the other hand the learned Government Pleader has urged that the rule of ejusdem generis is the one to be applied with caution and in any case the chicks cannot be considered as forming part of the class or category of the enumerated domestic animals, namely, oxen, bulls, cows, buffaloes, goats, sheep, horses, etc. It is no doubt true that the Supreme Court quoted with approval the following passage from Craies on Statute Law (7th edition, page 181) in Mangalore Electric Supply Co. Ltd. v. Commissioner of Income-tax, West Bengal :
"The ejusdem generis rule is one to be applied with caution and not pushed too far, as in the case of many decisions, which treat it as automatically applicable, and not as being, what it is, a mere presumption, in the absence of other indications of the intention of the legislature. The modern tendency of the law, it was said, is 'to attenuate the application of the rule of ejusdem generis'. To invoke the application of the ejusdem generis rule there must be a distinct genus or category. The specific words must apply not to different objects of a widely differing character but to something which can be called a class or kind of objects. Where this is lacking, the rule cannot apply."
22. We are unable to accept the contention of the learned counsel. The animate objects intended to be covered by the expression "live-stock" are only the domestic animals. By no process of reasoning can it be contended that chicks are animals. Oxen, bulls, cows, buffaloes, goats, sheep and horses which are enumerated as domestic animals are all quadrupeds whereas chicks do not belong to that category or genus. As pointed out by the Supreme Court in Deputy Commissioner of Sales Tax v. G. S. Pai & Co. :
"There is one cardinal rule of interpretation which has always to be borne in mind while interpreting entries in sales tax legislation and it is that the words used in the entries must be construed not in any technical sense nor sense nor from the scientific point of view but as understood in common parlance. We must give the words used by the legislature their popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it."
23. Applying those principles, chicks as understood either in common parlance or in popular sense could not be treated as domestic animals forming part of the class or category of oxen, bulls, cows, buffaloes, goats, sheep, horses, etc.
24. A question came up for consideration before the Supreme Court whether a coconut (neither tender not dried but a ripened coconut with or without husk) was a "fresh fruit" or a "vegetable". In Thillai Chidambara Nadar v. Additional Appellate Assistant Commissioner the learned judges observed :
"The concerned articles, namely, 'fresh fruits' and 'vegetables' being household articles of everyday use for the table these will have to be construed in their popular sense meaning the sense in which every householder will understand them. Viewed from this angle, the most apposite test would be the one adopted in the case of His Majesty the King v. Planters Nut and Chocolate Company Limited [1951] CLR (Ex) 122 (which decision was approved by this court in Commissioner of Sales Tax v. Jaswant Singh Charan Singh ). Would a householder when asked to bring home 'fresh fruit' and some 'vegetable' for the evening meal bring coconut ? Obviously, the answer is in the negative."
25. Following that test chicks cannot be understood as live-stock having regard to the enumerated items following the expression "live-stock". In all these cases the chicks that were sold by the petitioners were one day old.
26. On the basis of the definition of "live-stock" in the A.P. (Agricultural Produce and Live-stock) Markets Act, 1966 and the meaning given to that expression in "Law Lexicon" it is contended by the learned counsel for the petitioners that "live-stock" comprises chicks also. When the provisions of rule 5(2) are clear and do not permit us to construe the expression "live-stock" as inclusive of chicks, it would be improper to rely on the definition of the expression "live-stock" given in some other Act and hold that live-stock includes poultry. Under the A.P. (Agricultural Produce and Live-stock) Markets Act, 1966, "live-stock" means.
"Cows, buffaloes, bullocks, bulls, goats and sheep and includes poultry, fish and such other animals as may be declared by the Government by notification to be live-stock for the purposes of this Act."
27. Under that definition poultry is specifically included and is thus covered by the expression "live-stock". So we are unable to accept that contention.
28. For the reasons stated above, we hold that the authorities are justified in classifying chicks as general goods. Therefore all the writ petitions are dismissed. But, in the circumstances, there shall be no order as too costs. Advocate's fee Rs. 150 each.
29. Writ petitions dismissed.