JUDGMENT R.L. Gulati, J.
1. This is a reference under Section 11(1) of the U.P. Sales Tax Act. The Additional Judge (Revisions), Sales Tax, Lucknow, at the instance of the assessee, has referred the following question for the opinion of this court:
Whether ammonia paper and ferro paper fall within the category of paper ?
2. The assessee deals in stationery and drawing materials. Among the articles sold by the assessee are ammonia paper and ferro paper. During the assessment year 1966-67, a question arose as to the rate of tax on the turnover of these articles. The assessee's contention was that they were unclassified goods and their turnover was liable to tax at the general rate of 2 per cent., as prescribed by the charging Section 3 of the U.P. Sales Tax Act (hereinafter referred to as the Act). The Sales Tax Officer, on the other hand, obviously relying upon a notification dated 1st July, 1966, held that these articles were paper and were liable to tax at 6 per cent. The assessee's appeal and revision were dismissed by the Assistant Commissioner (Judicial), Sales Tax and by the revising authority. Hence this reference.
3. The relevant notification is ST-3124/X-1012(4) dated 1st July, 1966. It is a notification under Section 3-A of the Act and prescribes a rate of 6 per cent. on the turnover of "paper other than hand-made paper". The contention put forth on behalf of the assessee is that the articles in question, even though called as paper, are, in fact, not paper at all and, as no specific rate of tax has been prescribed for these articles in any of the notifications issued by the State Government, they must be regarded as unclassified goods and charged to tax at the general rate of 2 per cent, at multiple points.
4. Admittedly, ammonia paper and ferro paper are chemically coated paper used for obtaining prints and sketches of site plans. The prints and sketches of site plans are obtained not by pen or pencil but by the chemical coating on the paper. If exposed to light for a long time, the chemical evaporates and what is left behind is not used for drawing or for any other purposes for which a paper is used. The process by which ammonia and ferro paper is produced is not set out in the order passed by the sales tax authorities, but in paragraph 6 of the assessee's revision application, the process has been set out, which seems to have been admitted between the parties. This is what has been stated in paragraph 6 :
The ferro and ammonia paper is made of paper of rough and special texture by applying a chemical process and giving chemical coating thereon. The chemicals which are used are dyes, tartaric acid, theriac, ethylene, glycol and some other chemicals. These chemicals are absorbed by the base paper and the coated paper is again passed through another set of rollers so that the chemicals are properly and evenly impregnated in the base paper. It is only these chemicals coating which are important for making the use of ammonia and ferro paper, otherwise it is nothing but an ordinary rough base paper. This ferro and ammonia paper has got only this specific use of obtaining prints and sketches of site plans and it cannot be used as an ordinary paper because of these special texture and its chemical properties.
5. The word "paper" has not been defined in the Act or under the Rules and, as such, it has to be given the meaning which it has in the ordinary parlance. Merely because these articles are called paper is not decisive of the question. The real question is as to whether they are paper as understood generally. Paper, as understood in the common parlance, is the paper which is used for printing, writing and packing purposes. For example, toilet paper, even though it is called paper, is not understood as such. It is an article of toiletry and would be a toilet requisite. The dictionary meaning of the word "paper" or the scientific or technical name cannot ba of any help in deciding the question like the one before us. This has been emphasised by the Supreme Court in several cases. In the latest decision of the Supreme Court in Sales Tax Commissioner, U.P. v. S.N. Bros. A.I.R. 1973 S.C. 78, a question arose as to whether "food colours and essence" could be taxed as "dyes and colours" and "scents and perfumes". In paragraph 5, the Supreme Court observed :
The words 'dyes and colours' used in entry No. 10 and the words 'scents and perfumes' used in entry No. 37 have to be construed in their own context and in the sense, as ordinarily understood and attributed to these words by people usually conversant with and dealing in such goods. Similarly, the words 'food colours' and 'syrup essences' which are descriptive of the class of goods the sales of which are to be taxed under the Act have to be construed in the sense in which they are popularly understood by those who deal in them and who purchase and use them.
6. With the above observations, their Lordships rejected the contention of the sales tax department that those articles could be regarded as dyes and colours and scents and perfumes, A similar question was examined by this court in Kores (India) Ltd., Kanpur v. State of U.P. and Anr. [1970] 26 S.T.C. 126. This very notification was considered with reference to carbonpaper. This is what the court observed :
It is an article primarily used for making an impression on paper so that a number of copies of writing or typing can be obtained by a single impression. The important element involved in the use of carbonpaper is not the paper itself but the chemical medium with which it is coated. As a result of the coating, pressure applied to the surface of the carbon-paper produces a corresponding impression on the paper below it. What is of significance is the chemical coating. The paper on which the coating is spread is of secondary importance, inasmuch as it constitutes merely a convenient base for the coating. When carbonpaper is sold, it is not sold as tissue paper but as a material whose value and significance lies entirely in the chemical coating spread thereon. In the ordinary sense 'paper' refers generally to the material used for writing, printing or wrapping. Carbon-paper, in our opinion, cannot be considered in that sense.
7. The above observations, to our opinion, apply squarely to the present case. It is no doubt true that the expression "paper other than hand-made paper" is wide in terms and may include all forms of papers, but it will include only that kind of paper, which is understood in the popular sense to be a paper. We are definitely of the opinion that ammonia and ferro paper are not paper as understood generally. Our view finds support from a decision of the Kerala High Court in the case of Sree Rama Trading Company v. State of Kerala [1971] 28 S.T.C. 469, where it was held that cellophane was not paper. It was emphasised in that case also that a word, which is not defined in the Act, has to be understood according to its popular and commercial sense with reference to the context in which it occurs.
8. For all these reasons, we answer the question in the negative in favour of the assessee and against the department. Assessee is entitled to its costs, which we assess at Rs. 100.