GANESH TRADING CO KARNAL Vs. STATE OF HARYANA

JUDGEMENT

(1.) The appellants carry on business of buying paddy and after getting it husked either in their own mills or in other mills, sell the rice to Government and other registered dealer. On the purchase of paddy they paid purchase tax as provided in the Punjab General Sales Tax Act, 1948. The question for decision is whether when they sold the rice produced out of the paddy purchased, they were entitled to exclude the turnover relating to the paddy purchased. When the Sales Tax Officer sought to levy sales-tax without excluding the turnover in question from the total turnover of the appellants, the appellants moved the High Court of Punjab and Haryana under Article 226 of the Constitution challenging the validity of the levy. The petitions filed by the appellants first went up before a learned single Judge, who rejected the same. He came to the conclusion that rice and paddy are not identical type of goods and consequently the turnover relating to paddyover which purchase tax had been paid could not be excluded in computing the assessable turnover of the appellants. Aggrieved by that order the appellants went up in appeal to the Appellate Bench of that High Court. The Appellate Bench confirmed the decision of the learned single Judge. Thereafter, after getting certificates from the High Court, these appeals have been brought.

(2.) The only question that arises for decision in these appeals is whether paddy and rice can be considered as identical goods for the purpose of imposition of sales tax. Under the concerned Sales Tax Act exemption from payment of sales tax is provided if the very paddy in respect of which purchase tax was levied was sold and not if that paddy is converted into rice and sold. It is contended on behalf of the appellants that paddy and rice are identical goods and, therefore, when the law grants an exemption in respect of paddy, that exemption is also available to transactions relating to rice. The argument proceeded on the basis that rice was nothing but dehusked paddy. Both rice and paddy are identical goods. When paddy was dehusked, there is no change in the identity of the goods.

(3.) In support of their contention, the appellants cited to us certain dictionary meanings of the word "paddy" to show that rice is nothing but dehusked paddy. This court has firmly ruled that in finding out the true meaning of entries mentioned in a Sales Tax Act, what is relevant is not the dictionary meaning but how those entries are understood in common parlance, specially in commercial circles. Sales-tax primarily deals with dealers who are engaged in commercial activity. Therefore, what is of the essence is to find out whether in commercial circles, paddy is considered as identical with rice. In tis connection reference may be usefully made to the decision of this Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola 12 STC 286 = (AIR 1961 SC 1325). wherein this Court was called upon to consider whether betal leaves could be considered as vegetables Dictionary meaning showed that betal leaves are a class of vegetables but yet this court ruled that the word 'vegetables' should be construed in its popular sense, meaning that sense which people conversant with the subject matter with which the statute is dealing, would attribute to it. On that basis this Court came to the conclusion that betal leaves could not be considered as vegetables. In Commr. of Sales-tax, Madhya Pradesh Indore v. Jaswant Singh Charan Sing, 19 STC 469 = (AIR 1967 SC 1454) this Court held that word 'coal' included 'charcoal' on the ground that in ordinary parlance 'coal' includes 'charcoal'. In State of Punjab v. Chandu Lal Kishori Lal, (1969) 3 SCR 849 = (AIR 1969 SC 1073), the question was whether 'cotton' included 'cotton seeds'. This Court held that they were two distinct commercial goods though before the seeds were separated both the cotton and the seeds were part of one commodity.