1. Entry tax assessment on watery coconuts under Madhya Pradesh Sthaniya Kshetra Me Mal Ke Prvesh Par Kar Adhiniyam, 1976 — dispute over classification as oilseeds. (Para 1 )
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2000 Supreme(SC) 690
2000(3) Supreme 122
SUPREME COURT OF INDIA
(From Madhya Pradesh High Court)
S. Rajendra Babu & S.N. Phukan, JJ.
Commissioner of Sales Tax, M.P. -Appellant
versus
M/s. Popular Trading Co., Ujjain -Respondent
Civil Appeal Nos. 9825-9826 of 1996
Decided on 5-4-2000
Counsel for the Parties :
For the Appellant : S.K. Agnihotri, Ms. Madhur Dadlani Advocates.
Important Points
IMPORTANT POINT
Watery coconut is oil seed falling within Entry 5 of the M.P. Entry Tax on Goods Act, and not exempt from entry tax.
Watery coconut is oil seed falling within Entry 5 of the M.P. Entry Tax on Goods Act, and not exempt from entry tax.
Subject
Taxation Law - Sales Tax
Act Referred
Headnote
Madhya Pradesh Sthaniya Kshetra Me Mal Ke Parvesh Par Kar Adhiniyam, 1976-Entry tax on goods-Entry item No. 5-Oil seeds-Coconut-Watery coconut does not cease to be an oil seed-Watery coconut falls within entry 5-Liable to entry tax.
Held : The expression that is to say is descriptive, enumerative and exhaustive and circumstances to a great extent the scope of the entry. The entry provides for Oil seeds, that is to say coconut , which again says, i.e. Copra and coconut including any other commodity . An oil seed botanically means a seed which is a flowering plants unit of reproduction or germ capable of developing into another such plant. Seed which can yield oil is an seed. If a seed by reason of application of a scientific method produces oil is not necessarily understood to be an oil seed in a common parlance. If a commodity possesses all the qualities of an oil seed it cannot be excluded from the ambit of the expression oil seed . Oil is generally extracted from dry coconut, but in some parts of India it is extracted even from copra recovered from fresh coconuts. Copra of watery coconut before it dries up may not yield as much oil as dried copra. The oil which it yields may also contain some watery substance which have to be eliminated for the purpose of recovering pure coconut oil. At the same time, it yields sufficient quantity of oil. Thus watery coconut while yielding oil merely because it yields some watery substance does not cease to be an oil seed and, therefore, it falls within the entry. There is no reason to state that the watery coconuts in the present cases fall outside the scope of the Act. In the light of this analysis, we are of the view that the High Court was not justified in holding that watery coconut is not taxable under the relevant entry of the Act. (Paras 3 & 6)
Legal Category Hierarchy
Table of Contents
2. Whether watery coconuts are distinct commodities from copra or fall within the scope of oilseeds under the relevant tax entry. (Para 1 , 2 )
3. Analysis of the phrase that is to say and botanical nature of oil seeds; watery coconuts yield oil and are not tender coconuts. (Para 3 , 4 , 5 )
4. Watery coconuts, being seeds that yield oil and not being tender coconuts, fall within the exhaustive definition of oilseeds under the relevant tax entry. (Para 3 , 5 )
5. High Court order set aside and Tribunal order restored; appeals allowed. (Para 6 )
6. Does watery coconut fall under the category of oilseeds for tax purposes?
Yes. The court held that watery coconut is an oil seed because it is a seed capable of yielding oil and does not cease to be an oil seed merely because it contains watery substances. (Para 3 )
7. How should the phrase that is to say be interpreted in a tax entry?
The expression that is to say is descriptive, enumerative, and exhaustive, and it serves to circumscribe the scope of the entry. (Para 3 )
8. What is the legal distinction between tender, watery, and dried coconuts?
Tender coconuts have kernels in initial stages; dried coconuts have fully developed kernels with water dried up; watery coconuts are fully grown with developed kernels containing water. (Para 5 )
JUDGMENT
Rajendra Babu, J.-For the assessment periods 1978-79 the Sales Tax Officer assessed the respondent under the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Prvesh Par Kar Adhiniyam, 1976, that is, an Act to levy a tax on the entry of goods into a local area in Madhya Pradesh for consumption, use or sale therein (hereinafter referred to as the Act ). The respondent is a dealer in coconuts. Apart from oil he was assessed to entry tax on watery coconnuts under the Act. The assessee claimed in the appeal that copra and coconut are commercially two different commodities and water coconut is not liable to payment to entry tax. However, the appellate authority rejected this claim. The matter was carried in second appeal to the Tribunal unsuccessfully. Thereafter, the respondent questioned the correctness of the orders of the Tribunal and the other authorities before the High Court. The High Court considered the Entry at item No. 5 which reads as "Oilseeds, that is to say - (viii) Coconut (i.e. Copra excluding tender coconuts) (Cocos Nucifera)". The High Court took the view that tender coconut is not subject to tax and falls outside the scope of entry referred to above and does not specifically contain watery coconut ; that the word copra clarifies that watery coconut is not shown to be a taxable item. The High Court relied upon a decision of this Court in Sri Siddhi Vinayaka Coconut & Co. & Ors. v. State of Andhra Pradesh & Ors.1, to hold that watery coconut and dry coconut are two distinct commodities. The High Court also stated that every seed or article which can yield oil is not an oil seed and adopted the test as to whether coconut is copra . Inasmuch as watery coconut cannot be classified as copra , the High Court took the view that it is not sufficient to show that watery coconut is liable to be taxed but the Department was liable to show that watery coconut was in reality copra and, therefore, liable to tax. The Tribunal was not justified in holding that watery coconut was not exempt from payment of entry tax in terms of the aforesaid entry.
2. The learned counsel for the appellant very strenuously contended that the High Court had overlooked the essence of the matter, namely, what is brought to tax under Entry 5 is an oil seed and coconut of all descriptions except those which are not covered therein. The learned counsel submitted that watery coconut undergoes a natural process of ripening to a coconut and thereafter it ceases to be a tender coconut and so includes both dehusked coconut or coconut without husk and while dehusked coconut is known as copra , coconut with husk is known as watery coconut . She, therefore, submitted that watery coconut falls within the scope of Entry 5 to attract tax.
3. The view taken by the High Court in this case has lost sight of the expression in the opening clause of the entry Oilseeds, that is to say . The phrase that is to say has been the subject matter of interpetation by this Court in State of Tamil Nadu v. Pyarelal Malhotra2. The expression that is to say is descriptive, enumerative and exhaustive and circumstances to a great extent the scope of the entry. The entry provides for Oil seeds, that is to say coconut , which again says, i.e. Copra and coconut including any other commodity . An oil seed botanically means a seed which is a flowering plants unit of reproduction or germ capable of developing into another such plant. Seed which can yield oil is an seed. If a seed by reason of application of a scientific method produces oil is not necessarily understood to be an oil seed in a common parlance. If a commodity possesses all the qualities of an oil seed it cannot be excluded from the ambit of the expression oil seed . Oil is generally extracted from dry coconut, but in some parts of India it is extracted even from copra recovered from fresh coconuts. Copra of watery coconut before it dries up may not yield as much oil as dried copra. The oil which it yields m
