The interpretation of statutory provisions and notifications, and the applicability of specific definitions and exemptions under the sales tax law.

ORDER

1. Leave granted.

2.The appellant manufactures desiccated coconut and coconut in powder form from raw coconuts purchased by it. An assessment was made m respect of Assessment Year 1986-87 seeking to impose sales tax on the desiccated coconut powder sold by the appellant. The Assessing Officer found that the appellant had not paid any tax on the coconut purchased for manufacturing purposes and that, therefore, it was liable to pay tax on the finished products under Section 12 of the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act"). The appellants appeal filed before the Department was rejected. The further appeal to the Tribunal was also dismissed. The Tribunal referred the following question under Section 24(2) of the Act to the High Court for its opinion:

"Whether desiccated coconut is covered under Serial No. 14 of Notification No. 12528-CTA-62/82/F dated 22-3-1982?"

3. The High Court came to the conclusion that the desiccated coconut was not covered under Sl. No. 14 of Notification No. 12528-CTA-62/82/F a dated 22-3-1982 and accordingly, answered the reference against the assessee and in favour of the Revenue.

4. The appellant has impugned the decision of the High Court before us.

It has been contended that the courts below had wrongly come to the conclusion that desiccated coconut was not covered by the said notification and that the decision of the High Court was contrary to the decision of this Court in State of Kamataka v. Sri Lakshmi Coconut Industries1.

5. Before we determine the scope of the said notification it is necessary to consider the relevant provisions of the Act, particularly, Section 3-B and Section 5(1) which are as follows:

"3-B. Goods liable to purchase tax.-The State Government may from time to time by notification, declare any goods or class of goods to be liable to tax on turnover of purchases:

Provided that no tax shall be payable on the sales of such goods or class of goods declared under this section.

5. Rate of tax.-(1) The tax payable by a dealer under this Act shall be levied on his taxable turnover at such rate, not exceeding twenty-five per cent and subject to such conditions as the State Government may from time to time, by notification, specify."

6. On 22-3-1982 a notification was issued under Section 3-B in which the State Government declared various goods mentioned in the Schedule as being liable to tax on purchase turnover with effect from 1-4-1982. Item 14(vi) of the said Schedule reads as follows:

"14. Oilseeds that is to say-

(i)-(v)

(vi) Coconut (i.e. copra excluding green coconut) (cocas nucifera)."

7. Therefore, by virtue of this declaration, in terms of Section 3-B of the Act no sales tax would be payable on the sale of any of the declared goods including "coconut (i.e. copra excluding green coconut) (cocas nucifera)". The question then arises whether desiccated coconut manufactured by the appellant would come within the definition of the word "coconut" as contained in Item 14( vi) of the Schedule to the said notification.

8. This Court in the decision of State of Kamataka v. Sri Lakshmi Coconut Industries1 while construing an identical entry in Section 14 of the Central Sales Tax Act, 1956 (hereinafter referred to as "the 1956 Act") came to the conclusion that desiccated coconut did fall within the definition of copra. It would be useful to consider the reasoning of the Court in support of its conclusion. The Court said: (SCC pp. 622-23, paras 2, 5-7)

"2. The issue turns, basically, upon the interpretation of Section 14 entry (vi), sub-entry (viii). Section 14 declares the goods therein stated to be of special importance in inter-State trade or commerce. Entry (vi) therein refers to oilseeds, that is to say ... (viii) Coconut (i.e. copra

excluding tender coconuts) (cocas nucifera).

5. Emphasis has been laid by learned counsel for the appellant upon the fact that Section 14 entry (vi) refers to oilseeds and goes on to specify what these oil seeds are. It is su