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IN THE HIGH COURT OF BOMBAY
D.P. Madon, Sujata V. Manohar, JJ.
COMMISSIONER OF SALES TAX, MAHARASHTRA STATE, BOMBAY
Versus
GORDHANDAS TOKERSEY
Sales Tax References Nos. 68 and 69 of 1978 in Reference Applications Nos. 20 and 19 of 1976 respectively
Decided On: Decided On : 01-02-1983
BOMBAY SALES TAX ACT - SECTION 52 - SCHEDULE E, ENTRY 19 - INTERPRETATION - SANDALWOOD AND SANDALWOOD OIL - WHETHER PERFUMES - HELD, NO.
Fact of the Case:
The assessee, a registered dealer under the Bombay Sales Tax Act, 1959, filed applications before the Commissioner of Sales Tax seeking a determination of the correct rate of tax payable on sales of sandalwood and sandalwood oil. The Commissioner held that these items were perfumes within the meaning of entry 19 of Schedule E to the Act and were liable to tax accordingly. The assessee appealed to the Sales Tax Tribunal, which remanded the cases to the Commissioner for fresh consideration. On reconsideration, the Commissioner again held that sandalwood and sandalwood oil were perfumes. The assessee appealed to the Tribunal, which held that these items were not covered by entry 19 and fell under the residuary entry 22 of Schedule E. The department referred the following questions to the High Court:
Finding of the Court:
The High Court held that sandalwood and sandalwood oil were not perfumes within the meaning of entry 19 of Schedule E to the Bombay Sales Tax Act, 1959. The court noted that the entry referred to perfumes in conjunction with depilatories and cosmetics, and that these items were commonly considered as perfumes in the market dealing with cosmetics or toilet preparations. The court found that there was no evidence to show that sandalwood or sandalwood oil were used as perfumes or were known in the trade as perfumes. The court also noted that sandalwood oil was mainly used as a fixative in the preparation of perfumes, and that it was not itself a perfume.
Issues: Whether sandalwood and sandalwood oil are perfumes within the meaning of entry 19 of Schedule E to the Bombay Sales Tax Act, 1959.
Ratio Decidendi: The court held that the words "perfumes" in entry 19 of Schedule E to the Bombay Sales Tax Act, 1959, must be construed in conjunction with the words "depilatories" and "cosmetics" to refer to such articles which can be used as perfumes in personal toilet. The court found that sandalwood and sandalwood oil were not known as or used as perfumes, and that they were not used in personal toilet or for the beautification of the body as perfumes. Therefore, they were not covered by entry 19 of Schedule E.
Final Decision: The court answered both questions in the affirmative, in favor of the assessee and against the department. The court held that sandalwood and sandalwood oil were not perfumes within the meaning of entry 19 of Schedule E to the Bombay Sales Tax Act, 1959.
The judgment of the Court was delivered by
SUJATA V. MANOHAR, J. - The respondents in both these references, M/s. Gordhandas Tokersey are registered dealers under the provisions of the Bombay Sales Tax Act, 1959. The respondents filed two applications both dated 17th August, 1970, before the Commissioner of Sales Tax under the provisions of section 52 of the Bombay Sales Tax Act, 1959, for the determination of the correct rate of tax payable on the sales of sandalwood and sandalwood oil effected by the respondents under their invoices Nos. 1958 and 1850 dated 6th August, 1970 and 18th April, 1970, respectively. It was the contention of the respondents that sandalwood and sandalwood oil were governed by the residuary entry 22 of Schedule E to the Bombay Sales Tax Act, 1959. The Commissioner of Sales Tax, however, held that sandalwood and sandalwood oil were perfumes within the meaning of that word in entry 19 of Schedule E to the Bombay Sales Tax Act, 1959, and were liable to tax accordingly. From these decisions the respondents preferred appeals before the Sales Tax Tribunal being Appeals Nos. 3 and 4 of 1971. The Tribunal, by its common judgment in both the appeals dated 14th April, 1972, sent back the cases to the Commissioner for a fresh decision after considering the fresh evidence that the respondents may produce. The respondents were also given permission to produce whatever evidence they desired before the Commissioner. Thereafter, a fresh hearing was given by the Commissioner to the respondents and the Commissioner considered the fresh evidence produced by the respondents before the Commissioner. The Commissioner held that sandalwood and sandalwood oil were perfumes within the meaning of entry 19 of Schedule E of the Bombay Sales Tax Act, 1959. Against this decision the respondents preferred Appeals Nos. 27 and 28 of 1974 before the Tribunal. By a common judgment in both the appeals the Tribunal came to the conclusion that both sandalwood and sandalwood oil were not covered by entry No. 19 of Schedule E and would fall under the residuary entry 22 of Schedule E. From this decision of the Tribunal, at the instance of the department, the following two questions are referred to us for consideration, which are common questions arising in both the references :
"(1) Whether, on the facts and in the circumstances of this case and on a true and proper interpretation of entry 19 of Schedule E to the Bombay Sales Tax Act, 1959, the Tribunal was correct in law in coming to the conclusion that 'sandalwood' was not perfume within the meaning of the entry ?
(2) Whether, on the facts and in the circumstances of this case and on a true and proper interpretation of entry 19 of Schedule E to the Bombay Sales Tax Act, 1959, the Tribunal was correct in law in coming to the conclusion that 'sandalwood oil' was not perfume within the meaning of the said entry ?"
2. Entry 19 of Schedule E to the Bombay Sales Tax Act, 1959, at the relevant period was as follows :
"---------------------------------------------------------------------- Serial Description Rate of sales Rate of general Rate of purchase No . of goods tax in paise sales tax in tax in paise in in the rupee paise in the the rupee rupee ----------------------------------------------------------------------- 19. Perfumes, depilatories and cosmetics (except soap and articles specified in entry 7 in this schedule).
Ten Three Ten "
We have to consider whether sandalwood and sandalwood oil are perfumes within the meaning of that word in the entry. "Perfume" as defined in the dictionary has a wide range of meanings. In its broadest sense any object which emits fragrance or a pleasing odour, whether in its natural state or when subjected to a chemical process such as heat, can be called a perfume. The word "perfumes" in entry 19, however, ca
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