Triveni Glass Limited REP. Vs Commissioner of Trade Tax (Supreme Court of India)
Supreme Court held that ‘tinted glass sheets’ is liable to be tax as ‘goods or ware made of glass’ covered within entry no. 4 of notification no. 5784 dated 07.09.1981 and hence the same is taxable.
Facts- The issue involved here is whether “tinted glass sheets” manufactured by the appellants is liable to be taxed as “goods or wares made of glass” under the Notification No.5784 dated 07.09.198 1 being Entry No.IV or as unclassified item.
Conclusion- The contention of appellant that “plain glass panes” would include ‘tinted glass sheet’ is examined, same has to be rejected as the general meaning of “glassware” could not have been attached to ‘tinted glass’ sheet or the exclusion would have been specific in Entry (IV) itself. In our considered opinion, the expression “all the goods and wares made of glass” occurring in Notification dated:07.09.1981 must be taken to refer to all articles of glass except those specifically excluded in the entry itself.
Held that neither the dictionary meaning nor the common parlance theory would come to the rescue of the appellant. The arguments canvassed with regard to flat transparent sheet glass as indicated in the Indian Standards Specification has also received the attention of the High Court and has been dealt with under the impugned order and distinguished it on facts in favour of the revenue, and rightly so, for the reasons indicated thereunder which we are of the considered view is in tune with the settled principles of law noted hereinabove and thereby impugned order does not call for our interference.
It was thus held by the Bench of Justice S Ravindra Bhat and Justice Aravind Kumar that, “we are of the considered view that the impugned judgments would not call for interference and accordingly the appeals are dismissed.”
There is no vagueness in the notification dated 07.09.1981 and the entry No. 4 is clear and unambiguous namely it has brought within the sweep “all goods and wares made of glass” exigible to tax but not including “plain glass panes” and the exemption being the creation of the statute itself, it has to be construed strictly and even if there is any vagueness in the exemption clause must go to the benefit of the revenue.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. The point that arises for our consideration is whether “tinted glass sheets” manufactured by the appellants is liable to be taxed as “goods or wares made of glass” under the Notification No.5784 dated 07.09.1981 being Entry No.IV or as unclassified item.
2. In all these appeals, the above common question of law arises for our consideration. The facts in brief which are common in Civil Appeal No.3773 of 2011 relates to the tax assessment years 1996-97, Civil Appeal No.5914 of 2023 relates to the notice issued for reassessment for the tax assessment years 1992-93 to 1996-97 and whereas Civil Appeal Nos.5965-66 of 2023 relates to the tax assessment years 1998-99 and 2003-04 respectively.
3. The appellant deals with manufacturing and sale of sheet glass, tinted glass, coloured glass, figured glass, void glass, wired glass, float glass and neutral glass. After taking note of the books of accounts tendered during the course of the assessment proceedings the assessing officer opined after enquiry that tinted glass has been manufactured by assessee in a separate unit and the process adopted for its manufacture is different from manufacture of sheet glass. Assessing Officer has further opined in his order that raw materials used in manufacture of tinted coloured glass are cobalt oxide, carbon oxide, iron oxide etc. besides those used in the manufacture of sheet glass. Assessing Officer has further held that the transparency and density of tinted coloured glass is different from the simple glass surface as also solar radiation on the absorption capacity of tinted coloured glass being more than that of the simple sheet glass. He further concludes in his assessment orders that in the ordinary and common parlance the tinted glass is not recognised or understood as sheet glass.
4. Hence, the assessing officer imposed tax @15% on the sale of the goods by holding that said goods cannot be included in the category of plain glass but under the category of “all goods and wares made of glass” as reflected in the Notification No.5784 dated 07.09.1981. The appeals filed against the said assessment orders came to be dismissed and the imposition of tax @15% came to be upheld. The appellate authority also relied on the meaning of the word “goods” as reflected in circular dated 28.09.1993 for arriving at a conclusion that only plain glass sheet has been taken as unclassified item and not the goods in question. The assessee was unsuccessful before the Trade Tax Tribunal. The contentions raised and grounds urged contrary to the findings recorded by the assessing officer and the appellate authority also did not find favour by the tribunal. In other words, the orders of the authorities came to be affirmed by the tribunal. The assessee pursued its grievance before the High Court by filing a revision petition contending that plain glass panes which are commercially known as sheet glass includes sheet glass both in tinted and non-tinted forms and the entry “plain glass panes” cannot be interpreted to exclude the tinted glass from its purview. The contention of the appellant that manufacturing of tinted/coloured glass is the same as that of uncoloured glass also did not find waiver by the tribunal. Hence, the revision application/petition came to be dismissed.
5. The assessment orders which related to the tax assessment years 1996-97, 1998-99 and 2003-04 were the subject matter of the appeals and revision as noticed hereinabove. However, for the tax assessment years 1992-93 to 1996-97 notices under Section 21(2) came to be issued stating thereunder that said goods were liable to be taxed @15% while tax @10% inclusive of surcharge had been deposited. Hence, appellant was called upon to showcase as to why sales tax @15% should not be levied on the sale of the said goods. The notice issued for the tax assessment year 1996-97 came to be adjudicated and an assessment order came to be passed on 12.9.2002 which is the subject matter of Civil Appeal No. 3773 of 2011. The notices demanding tax @15% for the tax assessment years 1992-93 to 1996-97 came to be challenged in Writ Petition No. 283 of 2001 before the High Court of judicature at Allahabad which writ petition came to be dismissed in the light of said issue having already been laid to rest in appellant’s case itself, in the light of assessment order for the tax assessment year 1996-97 having been passed by rejecting the similar contentions. Hence, in all these appeals the common question of law has arisen and as such they are taken up together for consideration, adjudication and determination thereof.
6. We have heard the arguments of Shri S.K. Bagaria, learned senior counsel appearing on behalf of the appellant and Shri R.K. Raizada, learned senior counsel appearing for the respondent.
7. Shri S.K. Bagaria, learned senior counsel appearing for the appellant-assessee has contended that tinted glass is also sheet glass and as such attracts 10% tax and not 15% as claimed by the revenue. He would contend that the only difference between both the glasses is He would urge that tinted glass and simple glass are same commodities and both do not fall under the category of “goods and wares made of glass”. By placing reliance on several judgments noted hereinbelow he would submit that tinted glass is glass in its primary sense and no material difference in the manufacturing process of tinted sheet glass and plain glass exists. He would elaborate his submissions by contending that tinted glass is liable to be excluded as it is nothing but “plain glass panes” and he drew our attention to the dictionary meaning of the word “plain” and “panes” to contend that there is no distinction between these two commodities. He submits that adding of colour will not take away the tinted glass sheet out of the ambit of exclusion clause of Entry No. 4 of Notification No.5784 dated 07.09.198 1.
8. He would rely upon the description of the expression “glass” and “glass sheet” given in Indian Standard Specification for Flat Transparent Sheet Glass (Third Revision) March, 1988 to substantiate his contention. He would also submit that the revenue has failed in its attempt to discharge the burden and demonstrate that a particular item falls in a particular entry. He would submit that in the earlier assessment year the assessing authority itself had treated the “tinted glass sheet” as plain glass sheet and as such for the assessment year in question it should be accordingly treated.
9. In these factual circumstances the recourse to tax by treating the commodity in question as falling within the residuary entry has to be resorted to is also his contention. In support of his submissions, he has relied upon the following judgments:
(i) Atul Glass industries (Pvt.) Ltd vs Collector of Central Excise And Hindustan Safety Glass Works Ltd. Vs Union of India & Ors. (1986) 3 SCC 480
(ii) Gujarat Steel Tubes Ltd. And Ors. VS State of Kerala and Ors. (1989) 3 SCC 127
(iii) Geep Flashlight Industries Ltd. Vs Union of India & Ors. (2002) 9 SCC 545
(iv) Brindavan Bangle Stores and Ors vs Asstt. Commissioner of Commercial Taxes and Another. (2000) 1 SCC 674
(v) State of Jharkhand and others Vs LA Opala G. Limited. (2014) 15 SCC 136
(vi) M/s. Indo International Industries Vs Commissioner of Sales Tax. Uttar Pradesh. (1981) 2 SCC 528
(vii) Commissioner of Sales Tax, Madhya Pradesh Vs Triveni Sheet Glass Works Ltd. And Others (1989) SCC Online MP 346: (1990) 76 STC 308 (FB)
(viii) Commissioner of Sales Tax. Delhi Administration. Vikas Bhawan, New Delhi Vs Baluja Glass Company 1979 SCC Online Del 300: (1980) 46 STC 17
(ix) Commissioner of Sales Tax Vs Mohd. Ayub & Sons 1981 SCC Online All 971: (1982) 50 STC 187
(x) HPL CHEMICALS LTD. Vs Commissioner of Central Excise, Chandigarh (1997) 2 SCC 677
(xi) U.P. Glass Works Ltd. Vs Commissioner, Sales Tax. UP, Lucknow. 1973 SCC Online All 422: (1973) 32 STC 252 : 1973 Tax LR 2589
(xii) Sales Tax, U.P. Lucknow Vs Banaras Bead Manufacturing Co., Varanasi 1968 SCC Online All 380: (1970) 25 STC 100
(xiii) Jalal Plastic Industries And Ors. vs Union of India And Ors. 1981 (8) ELT 653
(xiv) Commissioner Of Sales Tax vs Dawoodbhoy Tayabally (1975) 36 STC 291
(xv) Nirlex Spares (P) Ltd. Vs Commissioner of Central Excise (2008) 2 SCC 628
(xvi) State of Uttar Pradesh & Others vs. Aryaverth Chawal Udyog & Others (2015) 17 SCC 324
(xvii) Commissioner of Customs (Import), Mumbai vs. Dilip Kumar & Company & Ors. (2018) 9 SCC 1
10. Per contra, Shri R.K. Raizada, learned senior counsel appearing for the respondent state would support the orders passed by the authorities and the High Court and prays for dismissal of the appeals.
FINDINGS RECORDED BY THE HIGH COURT
11. The learned High Court before whom grounds as urged by Shri S.K. Bagaria, learned senior advocate, appearing for the assessee had been urged was of the opinion that six (6) questions were required to be answered and accordingly framed the following six (6) questions:
(i) Whether the entry “All goods and wares made of glass”. excludes plain glass panes and treated the same as unclassified item, the Trade Tax Tribunal and lower authorities were justified to tax tinted/plaint glass panes as declared commodity?
(ii) Whether in view of common parlance as well as user of the tinted/coloured glass panes and plain glass panes are identical, in spite of that the tax has been imposed on the coloured / tinted glass panes as declared commodity instead of unclassified item?
(iii) Whether plain glass panes does not cover tinted/ coloured glass panes?
(iv) Whether once the entry plain glass panes is specifically excluded from the entry “All goods and wares made of glass” the authorities were not justified in imposing tax on plain glass panes (coloured and tinted glass panes) as goods made of glass wares/
(v) Whether in view of the fact that by mixing inch of colours no new commercial commodity comes into existence as tinted/coloured glass panes is a plain glass panes, still the tax can be imposed as declared commodity instead of unclassified item?
(vi) Whether in any view of the matter, the order passed by the Trade Tax Tribunal is justified?
12. The High Court has noted that authorities had taken note of the fact that during survey conducted through Special Investigation Branch Unit, Allahabad, it was noticed that manufacturing process adopted for manufacturing of tinted sheet was different or distinct from the manufacturing process adopted for manufacture of glass sheet and it was also noticed that the tinted glass sheet was manufactured in a separate unit. The High Court also noted that authorities had noted that density and transparency of the tinted colour sheet glass is different from that of ordinary sheet glass and the solar absorption power of tinted coloured glass sheet is much more than plain sheet glass and in the market or in the common parlance ‘tinted glass sheet’ is not treated as plain sheet glass.
OUR FINDINGS
13. The tug of war between the assesses and the revenue in these appeals revolves around the plea of assessee that tinted glasses manufactured by it falls under clause (c) of sub-section (1) of Section 3A namely residuary clause and as such tax is to be levied @ 10%; whereas revenue is contending that it would fall under Entry No.4 of the notification No.5784 dated 07.09.1981 which Notification has been issued in exercise of the power conferred under clause(d) of Sub-section (1) of Section 3A of the Act. It is in this background, the rival contentions requires to be examined and it would be apt and appropriate to extract Section 3A of U.P. Trade Tax Act, 1948. It reads as under:
“Section 3-A: Rates of tax
(1) Except as provided in Section 3-D, the tax payable by a dealer under this Act shall be levied:–
(a) on the turnover in respect of “declared goods”, at the point of sale to the consumer at the maximum rate for the time being specified in Section 15 of the Central Sales Tax Act, 1956, or where the State Government, by notification, declares any other single point or a lesser rate, at such other point or at such lesser rate;
(b) the turnover in respect of such goods), other than the goods referred to in clause (a), at such point and at such rate, not exceeding fifty per cent, as the State Government may, by notification, declare, and different points and different rates may be declared in respect of different goods
(c) on the turnover in respect of goods, other than those referred to in clause (a) or clause (b), at the point of sale by manufacturer or importer at the rate of ten percent.
(2) Every notification made under this section shall, as soon as may be after it is made, be laid before each House of the State Legislature, while it is in session, for a total period of not less than fourteen days, extending in its one session or more than one successive sessions; and shall, unless some later date is appointed, take effect from the date of its publication in the Gazette subject to such modifications or annulments as the two Houses of the Legislature may during the said period agree to make, so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done thereunder except that any imposition, assessment, levy or collection of tax or penalty shall be subject to the said modification or annulment.
(3) Where the State Government has declared any point or rate at which the tax payable by a dealer under the Act be levied under clause (b), clause (c), clause (c-1), clause (d) or clause (e) of sub-section (1) as existed immediately before the commencement of the Uttar Pradesh Trade Tax (Second Amendment) Act, 2000 and such declaration in force on such commencement, such rate or point of tax shall continue to be in force after such commencement, until modified or rescinded.”
14. A perusal of sub-section (1) of Section 3-A would indicate that the tax payable by the dealer under the Act shall be levied under clause (a) on the turnover in respect of “declared goods”, at the point of sale to the consumer at the maximum rate for the time being specified in Section 15 of the Central Sales Tax Act, 1956, or where the State Government, by notification, declares any other single point or a lesser rate, at such other point or at such lesser rate; under clause (b) on the turnover in respect of such goods, other than the goods referred to in clause (a), at such point and at such rate, not exceeding fifty per cent, as the State Government may, by notification, declare, and different points and different rates may be declared in respect of different goods; under clause (c) on the turnover in respect of goods, other than those referred to in clause (a) or clause (b), at the point of sale by manufacturer or importer @10 percent.
15. The Notification No. ST-2-5784/X-10(1)-80 dated 7/9/1981 issued in exercise of the power conferred under clause(d) of Sub-section (1) of Section 3A of the Act specifies that under Entry No. 4 reads as under:
“4. All goods and glass wares made of glass but not including plain glass panes optical lenses, hurricane lantern, chimneys bottles and phials, glass beads, clinical syringes, Therma Meters and scientific apparatus and instruments made of glass.”
Thus, on a plain reading of the above entry it would leave no manner of doubt that all goods and wares made of glass would fall within the definition of the said entry or in other words, all goods and wares made of glass would fall within Entry No.IV of the aforesaid notification and thus attract a duty @15 %. The exclusion of plain glass panes, optical lens as indicated therein would fall within the residuary clause attracting 10 % tax.
16. In the aforesaid background, it requires to be examined in the facts that has unfolded in the present case as to whether the tinted glass sheet is to be treated as equivalent to plain glass sheets/panes or
17. Tracing the history of the entry can be noticed as under:
