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Indian Herbs Research And Supply ... vs Commissioner Of Sales Tax

High Court Of Judicature at Allahabad|23 February, 1966


JUDGMENT S.C. Manchanda, J.
1. This is a case stated under Section 11(1) of the U.P. Sales Tax Act. The question referred is-
That 'dhoop or dhoop-batti' does not come under the category of 'perfume' and is not liable to tax under item No. 37 of Notification No. 905/X dated 31st March, 1956, under Section 3-A of the U.P. Sales Tax Act.
2. The material facts lie within a narrow compass and are these: The assessees are manufacturers of and dealers in dhoop-batti and they also deal in indigenous medicines at Dehra Dun. The return filed was not accepted and the turnover including that of sale of dhoop was estimated. The Sales Tax Officer assessed the turnover at 3 pies per rupee. The assessee appealed, but the Judge (Appeals) was of the opinion that the case called for enhancement in tax as the manufacture and sale of dhoop-batti fell within item No. 37 of Notification No. ST. 905/X dated 31st March, 1956, and was liable to tax under Section 3-A of the U.P. Sales Tax Act, i.e., at single point. The Judge (Appeals) estimated the turnover of dhoop and batti at Rs. 10,000 and taxed the sum at one anna per rupee instead of 3 pies per rupee, as had been done by the Sales Tax Officer. In this way the tax was enhanced from Rs. 348-14-9 to Rs. 838-11-0. The appellate order was confirmed upon revision, rejecting the assessee's contention that dhoop-batti was used for the purpose of pooja and could not itself be classified in the category of "perfumes".
3. A reference having been asked for, a case has been stated and the question aforesaid referred.
4. The short question is as to whether dhoop or dhoop-batti falls within the category of "perfumes" of the said notification. Item No. 37 of the said notification is :
Scents and perfumes (in English) and "Itra tatha sugandhian" (in Hindi).
5. This notification was issued in the exercise of the powers conferred by Section 3-A of the Act and it declared that with effect from 1st April, 1956, the goods specified therein will be liable to single point tax, which in the case of goods imported from outside U.P. will be at the point of sale by the importer and in the case of goods manufactured in U.P. at the point of sale by the manufacturer. The assessee, admittedly, is a manufacturer of dhoop and dhoop-battis. If these articles fall within the category of "scents or perfumes" then they will be liable to be taxed in the hands of the assessee at the rate of 0-1-0 per rupee, which is the tax declared in the said notification instead of the multi-point sales tax of only three pies in the rupee.
6. It is common ground that dhoop-batti does not come in the category of scents. On behalf of the sales tax department it is contended that dhoop falls within the category of "perfumes", which is a word of much wider import than scents and includes therein all "incense". On behalf of the assessee it was contended that "perfumes" as used in the notification, must have the meaning which is commonly understood and that dhoop is not used for purposes of perfume or scent but for pooja and therefore would fall outside the category of "perfumes". The matter is not free from difficulty but in my judgment the word "perfume" should be given the meaning which is ordinarily understood in the world of commerce. Sales and purchase tax is a tax on goods bought and sold by a dealer. It is therefore important not to lose sight of this fact when interpreting a notification under the Sales Tax Act. The meaning given to a word by commercial men must ordinarily be preferred to the dictionary meaning. The Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer Akola, [1961] 12 S.T.C. 286 observed that "the word 'vegetable' must be construed not in any technical manner nor from the botanical point of view but as understood in common parlance." If this test is applied then there cannot be much doubt that the word "perfumes" would not in common parlance be understood to include dhoop which does not emit by itself any fragrance but only does so when set alight. The meaning of the word "perfume" when used as an objective noun is, according to the Shorter Oxford Dictionary, "a substance natural or prepared which emits agreeable odour, scent." The Webster's New Internationa] Dictionary gives the meaning as "a substance that emits a pleasant odour especially a fluid preparation (as one containing essence of flowers, synthetics and a fixative) used for scents." According to Murray's New English Dictionary it means, "to impregnate with sweet odour; to impart a sweet scent to (now the ordinary meaning)." According to Corpus Juris Secundum " 'perfume' is a substance that emits a scent or odour which affects agreeably the organs of smelling." This shows that dictionaries and lexicons are more or less agreed that the substance must itself "emit" the agreeable scent or odour. When we turn to the dictionary meaning of the word "emit" it is "to send out; to throw out; issue forth ; send forth, etc." This necessarily implies that the substance itself, in its natural state, should go on sending forth agreeable odour and not that the odours should be the result of the application of heat to the substance or the application of some foreign matter to induce the chemical reaction which would result in the odours being released from the substance.
7. It is no doubt true that after heat has been applied and the fumes come into existence if they have an agreeable odour they too could very well be called "perfume" but that is not the meaning which was intended to be given to the word "perfumes" as used in item No. 37. The Encyclopaedia Britannica when dealing with "incense" has pointed out that the literal meaning of "incense" is the same as "perfume" and the word "perfume" comes from the word "fumare" which means "to smoke, or to fill or impregnate with smoke or vapour of some burning substance." The Encyclopaedia goes on to point out that the word "perfume" has gone on to acquire an extended meaning to include anything sweet in smell from smoking incense to fragrance of flowers, whereas "incense" on the other hand has in the course of time come to be restricted to "frankincense". It is therefore possible to argue that in using the word "perfumes" the notification meant the word "perfume" in the wider sense to include incense. Dhoop would undoubtedly fall within the category of "incense" but dhoop is certainly not what common business-man would include in the category of "perfume" or "sugandhian" as is to be found in the Hindi version of the notification.
8. Reliance was placed by the learned Junior Standing Counsel on the decision in Civil Misc. Writ No. 1878 of 1962 (Prahlad Das Gupta v. Sales Tax Officer) decided by me on 17th October, 1962, wherein "agarbatti" was considered to fall within item No. 37 of the aforesaid notification as being "perfumes". I did not however express any concluded opinion. In any event agarbatti cannot be equated with dhoop as agarbattis in themselves ordinarily emit fragrance even without being burnt. It is not possible to say the same about dhoop. That case, therefore, is clearly distinguishable and in any case that writ petition was dismissed as two opinions on the question whether agarbattis fell within the category of perfume were possible. No assistance therefore can be derived by the learned Junior Standing Counsel from that case for solving the problem which arises here.
9. Giving the word "perfume" its meaning as is understood in the commercial world I would hold that dhoop and dhoop-batti, which do not emit any agreeable odour except when burnt, do not fall within the category of "perfumes" as found in item No. 37 of the said notification.
10. For the reasons given above my answer to the question referred will be in the affirmative and in favour of the assessee.
11. Let a copy of this judgment be sent under the seal of the Court and signature of the Registrar to the Revising Authority and the Commissioner of Sales Tax, U.P.
12. The Commissioner of Sales Tax will pay the costs of the assessee which I assess at Rs. 100. Counsel's fee is also assessed at Rs. 100.
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Indian Herbs Research And Supply ... vs Commissioner Of Sales Tax


High Court Of Judicature at Allahabad

23 February, 1966
  • M Desai
  • S Manchanda