- (1.) THE appellant has been taxed on its purchases of groundnuts. A notification issued by the State Government under the Sales Tax Act imposes purchase tax on "oil-seeds". The neat point for consideration is: Are groundnuts "oil-seeds"?
(2.) COUNSEL for the appellant asked us to answer the question in the negative. In support of his argument he has relied on the dictionary meaning of "oil-seed" and "groundnut". According to the dictionaries an oil- seed is a seed yielding oil, and groundnut is a small farinaceous edible tuber of the wild beans. So it is said that while an oil-seed is a seed, a groundnut is a species of beans. Counsel has also referred us to certain decisions in support of his argument. In The State of Andhra Pradesh v. Kajjam Ramachandraiah ([1961] 12 S.T.C. 795), the Andhra Pradesh High Court has held that coriander, voma and sompu are not oil-seeds. We are not concerned with these things in this case, but certain observations are noteworthy. The Court said: "The important question, to our mind, is not whether oil can be extracted from these seeds, but whether they are known in this country in common parlance to be oil-seeds within the contemplation of the Legislature." The Court further said: "It is not disputed that the three commodities referred to are used as spices and have not been known in the country as oil-seeds. Further, there is no evidence to show that any oil is extracted in this country or that the oil extracted from these is used commercially or industrially or can be bought in the market. In these circumstances, we are clearly of the view that the Legislature had never contemplated nor intended to include such commodities within the definition of oil-seeds." In Commissioner of Sales Tax, Madhya Pradesh v. Bakhat Rai ([1966] 18 S.T.C. 285), the Madhya Pradesh High Court held that groundnut is not an oil-seed. The Court said: "......... a groundnut is a bean. Oil extracted from it is edible. But groundnut is not like the seeds of sesame plant which are used principally for the purpose of extraction of oil."
(3.) THIS decision is directly on the point. It will be worthwhile to bear in mind the remarks of the Court as regards the principles of interpretation. The Court said: "Now, the term 'oil-seeds' has not been defined in the Act. But it is a term of everyday use, and so it must be construed in its popular meaning, that is to say, in 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it.' It must be construed as understood in common language." The Court went on to say: "In its popular sense, the word 'oil-seeds' means various kinds of grain which are principally used for extraction of oil." It was further said: "The test is not whether oil can be extracted from a fruit or seed, but it is whether in common parlance the article is known as 'oil-seed' used principally for the extraction of oil. Judged by this test, it is difficult to hold that coconuts, groundnuts and jira fall within the meaning of the term 'oil-seeds'......" In The Central India Spinning and Weaving and Manufacturing Company Limited v. The Municipal Committee, Wardha (A.I.R. 1958 S.C. 341), it was held that betel leaves are not "vegetables". It was said there that where the words of a statute are susceptible of two interpretations, then the interpretation which favours the citizen should be preferred to the interpretation which imposes a burden on him. Counsel has also shown to us an uncertified copy of a judgment of the Punjab High Court in Sri Hans Raj Choudhri v. Sri J. S. Rajyana (Civil Writ No. 2371 of 1964) decided on February 28, 1967 (Since reported at [1967] 19 S.T.C. 489). Shamsher Bahadur, J., has held that groundnut is not an oil-seed. The learned Judge followed the decision of the Madhya Pradesh High Court and said: "Neither counsel has been able to refer me to a decision of the Supreme Court on this point. The reasoning of the Madhya Pradesh High Court does not appear to be unreasonable and prima facie, it appears to me that groundnuts cannot be treated as oil-seeds to justify the imposition of the purchase tax." ;