Gujarat High Court
V. Patel Dineshkumar vs State Of Gujarat on 18 January, 1993
Author: M.B. Shah
Bench: M.B. Shah
JUDGMENT C.V. Jani, J.
1. The question referred to this Court by the Gujarat Sales Tax Tribunal, Ahmedabad, under section 69(1) of the Gujarat Sales Tax Act, 1969, hereinafter referred to as "the Act" is the following :
"Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that dried bits of chicory roots would not be covered by entry 23 or entry 8 of Schedule I to the Gujarat Sales Tax Act, 1969 ?"
2. The applicant-firm which carries on the business of reselling chicory roots and oil cakes is registered as a dealer under the Act. During the assessment for samvat years 2034 and 2035 the concerned Sales Tax Officer, Ahmedabad, under section 46A of the Act, noticed that the applicant was not paying any tax on the sales of chicory roots inasmuch as it treated the same as tax-free goods. The account books of the applicant-firm for samvat years 2034 and 2035 were seized. It was contended by the applicant before the Assistant Commissioner of Sales Tax (Appeals), Range 3/9, Ahmedabad, that chicory roots were covered by entry 23 of Schedule I or entry 8 of the same Schedule and, therefore, they were exempt from payment of sales tax. The Assistant Commissioner, however, did not accept this submission and assessed the applicant by holding that the disputed sales were taxable at the relevant rates. Penalty was also imposed under section 45(6) of the Act read with section 9(2) of the Central Sales Tax Act, 1956. The appeal preferred by the applicant against the said assessment orders before the Deputy Commissioner of Sales Tax, Division II, Ahmedabad, failed. The applicant, therefore, preferred two revision applications before the Sales Tax Tribunal at Ahmedabad, which after considering several judgments of the Supreme Court and this Court, held that chicory roots were not exempt from payment of tax as they were not covered by entries Nos. 8 and 23 as alleged. However, the Tribunal was pleased to remit the penalty and retained it to the extent of 40 per cent only. The applicant submitted Reference Applications Nos. 5 and 6 of 1985 for referring two questions to this Court for its opinion :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that dried bits of chicory roots would not be covered by entry 23 of Schedule I to the Gujarat Sales Tax Act, 1969 ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that dried bits of chicory roots would not be covered by entry 8 of Schedule I to the Gujarat Sales Tax Act, 1969 ?"
Instead of referring these questions of law to this Court, the Tribunal, rightly consolidated the issues and framed a single question of law, as stated earlier.
3. When the reference came up for hearing both the learned counsel - Mr. J. S. Joshi, learned counsel appearing on behalf of Mr. S. L. Modi, for the applicant and Mr. K. M. Mehta, learned counsel appearing for and on behalf of M/s. H. V. Chhatrapati for the Revenue, submitted that the question was covered by the Division Bench judgment of this Court in Brooke Bond India Ltd. v. State of Gujarat [1992] 84 STC 275. The Division Bench was concerned with an identical question whether chicory roots which was the subject-matter of the sale transaction were eligible for exemption under either entry No. 23 or entry No. 8 of Schedule I to the Act. It may be stated here that these entries relate to the period before April 1, 1992, when substantial changes were made by Gujarat Sales Tax (Second Amendment) Act, 1992. Under section 5 of the Act, it is provided that no tax will be payable on the sales or purchases of any goods specified in Schedule I. The entry at serial No. 8 and the entry at serial No. 23 of Schedule I read as under :
"8. Fresh vegetables and edible tubers.
23. Flower, fruit and vegetable seed; seeds of lucerne grass (Rajka) and of sann hemp; bulbs, tubers and plants other than orchids."
4. The Division Bench applied the doctrine of popular parlance pronounced by the Supreme Court from time to time, and accepted the finding and view of the Tribunal that dried chicory roots could not be said to be edible tubers. In fact the assessee had not purchased tubers; what came to be purchased was dried chicory roots. Since dried chicory roots were not tubers fit for growing of fresh plants, nor did they fall in the category of flower, vegetable seeds, hemp, bulbs, tubers and plants, the Division Bench held that the dried chicory roots which were the subject-matter of sale transactions would not fall under entry No. 8 or entry No. 23 of Schedule I as then existing. The same principle would apply in the present case also.
5. We, therefore, hold that the Tribunal was justified in holding that dried bits of chicory roots would not be covered by entry No. 23 or entry No. 8 of Schedule I to the Gujarat Sales Tax Act, 1969, and we answer the reference accordingly.
6. In the circumstances of the case, there will be no order as to costs.
7. Reference answered in the affirmative.