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2022 DIGILAW 339 (ORI)

Glamour, Cuttack v. State of Orissa

2022-07-29

R.K.PATTANAIK, S.MURALIDHAR

body2022
JUDGMENT : S. MURALIDHAR, J. 1. This revision petition arises from an order dated 6th July, 2012 passed by the Orissa Sales Tax Tribunal, Cuttack (Tribunal) dismissing the SA No. 78(ET) of 2009-10 filed by the Assessee against an order dated 14th January, 2009 passed by the Assistant Commissioner of Sales Tax (Appeal), Cuttack (ACST) confirming an entry tax (ET) demand of Rs. 4,45,596/- raised by the Sales Tax Officer (STO) under Section 7 of the Orissa Entry Tax Act, 1999 (OET Act) for the Assessment Year (AY) 2004-05. 2. The background facts are that the Assessee is a registered dealer, dealing in ready-made garments, hosiery cloth and Aluminum extrusion. For the AY in question, the STO determined the gross turnover (GTO) of the dealer at Rs. 2,57,32,641. He then took up the ET liability of the dealer and held that the dealer was required to pay ET of Rs. 4,45,696/-. After the appeal of the dealer was dismissed by the ACST, he approached the Tribunal. 3. By the impugned order, the Tribunal decided the appeal ex-parte. Nevertheless, on merits the Tribunal held that the entry in Part-I Schedule of the OET Act, which reads “Sheets, rods etc. of non-ferrous metal including Aluminum” would cover Aluminum extrusion as well and, therefore, they were amenable to tax @ 1%. The contention of the Assessee that Aluminum extrusions are not Scheduled goods and no ET was payable on the goods imported and not manufactured within the State of Odisha was not accepted by the Tribunal. 4. While admitting the present revision petition on 3rd November 2014, the operation of the Assessment order was stayed during pendency of the petition subject to the Petitioner depositing Rs. 50,000/- and the following questions were framed by this Court for consideration: “(i) Whether aluminum extrusion falls under Entry 11 of Part I of the Schedule of the OET Act and is liable to entry tax @ 1%? (ii) Whether the Tribunal is justified in upholding the levy of penalty under Section 7(5) of the OET Act undisputedly when the assessment was completed under Section 7(3) of the OET Act?” 5. This Court has heard the submission of Mr. R.P. Kar, learned counsel appearing for the Petitioner and Mr. Sunil Mishra, learned Additional Standing Counsel for the Department. 6. This Court has heard the submission of Mr. R.P. Kar, learned counsel appearing for the Petitioner and Mr. Sunil Mishra, learned Additional Standing Counsel for the Department. 6. The contention of the Petitioner is that it brings Aluminum extrusions from outside the State of Odisha for sale within Odisha and as such no entry tax is payable on goods which are not mentioned in the Schedule appended to the OET Act. Entry 11 of Part-I of the Schedule to the OET Act reads: “Sheets, rods etc. of non-ferrous metal including Aluminum.” If one compares the above entry with certain other entries in the Schedule to the OET Act, it is seen that there are certain other entries which do not contain the word ‘etc.’ and connote a larger range of products. For e.g. Entry 16 reads: “Tobacco and Tobacco products.” On the other hand there are entries which use the expression ‘etc.’ like Entry 5 in Schedule-II which reads: “Cinematography equipments and other equipments etc..” Here the word etc. can obviously mean only things of the same type as the goods preceding. These two contrasting entries reflect the legislative intent. Where the entry is meant to be broad and inclusive, it would include all products of a particular material. To connote this, the words “products and products thereof” are used. 7. However, in the context in which Entry 11 is inserted, it is seen that the word ‘etc.’ qualifies the words “Sheets, rods which are of non-ferrous metal including Aluminum.” The word ‘etc.’ cannot obviously include all products of the non-ferrous metals including aluminum but to the articles which are similar to “sheets, rods.” The definition of the term ‘extrusion’ as a noun refers to extruded products which are angles, brackets used in roofs as a base support. These are neither sheets nor rods. In common trade parlance when one goes to a shop selling such products and asks for ‘Aluminum extrusions’, the seller is unlikely to supply to such customer “sheets or rods.” Conversely, if the customer is to ask for sheets/rods, he is unlikely to be given “extrusions.” In other words, these are distinct and different types of products and understood as such in the trade pertaining to such products. 8. In taxation law, the principle applicable is that of strict interpretation. Either a certain article is included in an entry or it is not. 8. In taxation law, the principle applicable is that of strict interpretation. Either a certain article is included in an entry or it is not. In taxing statutes when interpreting technical words which are special to a trade or business, the test to be adopted is the common parlance tests. In Indian Aluminium Cables Ltd. vs. Union of India, (1985) 3 SCC 284 , the Supreme Court observed that “in determining the meaning or connotation of words and expressions describing an article in a tariff schedule, one principle which is fairly well settled is that those words and expressions should be construed in the sense in which they are understood in the trade, by the dealer and the consumer. The reason is that it is they who are concerned with it and, it is the sense in which they understand it which constitutes the definitive index of legal intention.” 9. In Dunlop India Ltd. vs. Union of India, AIR 1977 SC 597 , it was explained that if a word has acquired a particular meaning in the trade or commercial circles that meaning becomes the popular meaning in the context and should normally be accepted. 10. Here we are concerned with the purport of the word ‘etc.’ occurring in Entry 11 of the Schedule to the OET Act. Would it bring within its ambit, aluminium extrusions? 11. The word “etc.” has been defined in Collins Thesaurus of English Language, 3rd Edition 2008, Page-343 as “and so on, and so forth etc.” In legal parlance, if one turns to Black’s Law Dictionary (8th Edition, 2004) p 592 the expression et cetera has been defined as “and other things; the term usually indicates additional, unspecified items in a series.” 12. Turning to the Indian context The Law Lexicon of P. Ramanatha Aiyar (Second Edition Reprint 2008 Page-678), defines it thus: “Etc. or & C. is an abbreviation of Et Cetera and therefore may mean and others, and so forth; and the rest; other things; of the same character, or only those things ejusdem generis. Custom, the intention of the parties, the context, and the manner and place in which the abbreviation is used may govern its meaning; but where it can have one certain meaning, it will be given that meaning; although as sometimes used it is considered as meaningless and without effect, and is often disregarded as surplusage (Cyc).” 13. Custom, the intention of the parties, the context, and the manner and place in which the abbreviation is used may govern its meaning; but where it can have one certain meaning, it will be given that meaning; although as sometimes used it is considered as meaningless and without effect, and is often disregarded as surplusage (Cyc).” 13. In Rajagopala Pandarathar vs. Thirupathia Pillai, AIR 1923 Madras 511 the words used in the mortgage-deed, on which the suit was based, came for interpretation. The question was whether the residence of the first defendant was included in the description contained in the decree? The plaintiff sought to rely on the word ‘et cetera’ occurring in the following line in the mortgage-deed to contend that the defendant’s residence would be included and cold: “4.......I possess in the waste lands, poramboke and other lands attached thereto, all kinds of trees, topes, wells, ponds, tank-bunds, fruit trees, wood trees, footpaths, elevated and low portions, etc. be they a little more or a little less, have been given as security.” 14. The Madras High Court did not agree with the Plaintiff’s contention and held: “6.......But the only argument advanced is that the palace building must be regarded as included in the expression ‘the remaining lands’ or ‘poramboke and other lands’ or the words ‘etc.’ I find it impossible to hold that the words ‘the remaining lands’ or ‘poramboke and other lands attached thereto (remaining lands)’ can be regarded as including the residential building of the Zamindar. Turning to the words ‘etc.’ they follow an enumeration of specific things beginning with “all kinds of trees” having some characteristic, and the words should be restricted to things of the same nature as those which have been already mentioned. In such a case the rule of ejusdem generis will apply and the residential building cannot be said to be ejusdem generis with the things already enumerated.” 15. In K.V. Mathew vs. District Manager, Telephones, Ernakulum, AIR 1984 Ker. 40 , the High Court was considering the expression ‘institution’ and in the context of scope of the expression, it was held that “the word et cetera does not share the character of an inclusive definition and cannot therefore enlarge the scope of the expression ‘institution’ 16. In K.V. Mathew vs. District Manager, Telephones, Ernakulum, AIR 1984 Ker. 40 , the High Court was considering the expression ‘institution’ and in the context of scope of the expression, it was held that “the word et cetera does not share the character of an inclusive definition and cannot therefore enlarge the scope of the expression ‘institution’ 16. As already mentioned, where the entry is meant to include all kinds of products, the entry itself would read like it does in the case of Tobacco. In fact, in the context of entry ‘Tobacco and Tobacco products’ this Court has recently in its decision dated 5th July, 2022 in STREV No. 29 of 2012 (M/s. Patel Brothers and Co. Sambalpur vs. State of Odisha) held that ‘bidis’ would form part of ‘tobacco products’. If Entry 11 had read ‘sheets, rods of non-ferrous metals including Aluminum and products thereof’, then it would have been arguable that it covered Aluminum extrusions as well. However, the word here used is ‘etc.’ and it is used soon after the words “sheets, rods” and, therefore, will include only a similar kind of product i.e. like sheets and rods. Aluminum extrusions, the pictures of which are readily available on the net, and which were viewed in the Court in the presence of the counsel, are distinct and different from ‘sheets and rods.’ 17. For all of the aforementioned reasons, the Court is of the view that Aluminum extrusions brought into Odisha from outside Odisha by the Petitioner is not exigible to entry tax @ 1% since it is not covered by Entry-11 of Part-I of the Schedule to the OET Act. 18. Question (i) is accordingly answered in the negative i.e. in favour of the Assessee and against the Department. 19. In view of the answer to Question (i), Question (ii) is answered in the negative by holding that the Tribunal was not justified in upholding the levy of penalty under Section 7 (5) of the OET Act. 20. The impugned order of the Tribunal and the corresponding orders of the STO and the ACST are hereby set aside. The petition is disposed of in the above terms.