S.P. BHARUCHA, J. - (1.) .These appeals, filed by the assessees, challenge the correctness of the judgment and order of a division bench of the high court at Madras. The question raised in these appeals is whether ultramarine blue is a pigment, so that it falls under Item 1 10 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, as contended by the Sales Tax authorities, or a chemical, so that it falls under Item 138 thereof, as contended by the assessees. The high court referred to decisions of other high courts and came to the conclusion that the stand of the Sales Tax authorities was justified.
(2.) . Item 110 reads thus: JUDGEMENT_70_7_1997Html1.htm Item 138 covers dyes and chemicals not otherwise specified in the Schedule. . Our attention was invited by learned counsel for the assessees to the judgments of the Madhya Pradesh, Rajasthan and Gujarat high courts and we now refer to them in seriatim. . In N. Ganu Bhai v. CST the dispute was whether ultramarine blue or "neel" was taxable under Entry 25 of Part II of Schedule II of the Madhya Pradesh General Sales Tax Act, 1958, or under the residuary entry in Part VI of Schedule II of that Act. The former entry at the relevant time covered dyes and the Sales Tax authorities contended that ultramarine blue was a dye and should be taxed as such. The high court referred to the Concise Oxford Dictionary which stated that ultramarine blue was a pigment made from lapis lazuli. It referred to Chambers' Encyclopaedia which stated that blue a pigments in common use by artists consisted of native and artificial ultramarine, cobalt, indigo and Prussian blue. It then referred to the dictionary meaning of "dye". It found: "13. Ultramarine blue is (a) a pigment got either from 'lapis lazuli' or artificially by mixing clay, carbonate of soda, sulphur and resin, (b) that when obtained from lapis lazuli or cobalt, it can be permanent and 72 can be used by artists for painting skies and distances in landscapes, (c) when obtained artificially is not permanent, (d) also the base for a powder used by laundresses. 14. Treating neel as a dye arises out of the failure to distinguish 'dye' in its true meaning from a pigment and from the 'blue, a powder used by laundresses'. This powder cannot be used to impregnate tissues when the material is in a raw state to yield more permanent results. It is not capable of being fixed to the fabric as when it is used on the fabric it is fugitive, not fast to light, nor resistant to action of water and is not capable of diluting acids or alkalis. It is not seriously disputed that neel is used after the clothes are washed, usually at the first rinsing, and that with each rinsing it gets washed away. It cannot resist or withstand the use of detergents or even washing soda which is alkaline in nature. Finally, it is neither a direct dye nor a mordant." The high court concluded that ultramarine blue was not a dye.
(3.) . N. Ganu Bhai case considers whether ultramarine blue or "neel" is a dye. In so doing it finds that ultramarine blue or "neel" is a pigment. The case, far from supporting the assessees, is against them. . In Assistant CTO v. Rajasthan Chemical Corpn. the question was whether ultramarine blue or "neel" was included in the term "pigment". The Board of Revenue for Rajasthan, from whose order a reference was made to the high court, had posed the question whether ultramarine blue or "neel" in common parlance was covered by the expression 'pigment'. The Board had not gone into the question but had relied upon an earlier decision where the Board had held that ultramarine blue could not be considered to be a pigment. (No details of the material that was before the Board on the earlier occasion are set out in the high court's judgment.) The high court said that the word "pigment" in the relevant entry had been used along with dyes, paints, varnishes and dry colours. The dictionary meaning of the word "pigment" was "any substance used for colouring: that which gives colour to animal and vegetable tissues". Pigment brown, pigment carmine, pigment chrome yellow, etc., were used to convey colouring, by particular colours. Ultramarine blue or "neel" was not a colour. In common parlance, ultramarine blue or "neel" was understood as a substance which was used to whiten clothes. It was not understood as a colour. It was a whitening agent for laundry purposes, used by washermen or by householders. Ultramarine blue was not a colour as it was used to whiten clothes. Ultramarine blue was not a pigment.;