Judgment sc-1994-2-123-129

The Judgment of the Court was delivered by B B.P. JEEVAN REDDY, J. In this appeal preferred against the judg- ment of the West Bengal Taxation Tribunal, the question is whether sales " of turmeric powder and pepper powder obtained from whole turmeric and whole pepper are exigible ID sales tax under West Bengal Sales Tax Act, 1954 (1954 Act). The principal Act levying sales tax in the State of West Bengal, of course, is the Bengal Finance (Sales Tax) Act, 1941. By a c Notification No. 885-F.T. dated May 1, 1955, issued under Section 25 of the 1954 Act, the Governor of West Bengal specified and notified certain commodities including turmeric and pepper, wih the result that the said commodities ceased to be governed by the 1941 Act and came within the purview of the 1954 Act. The Notification, in so far as it is relevant, reads D " ) thus: " "No. 385-F.T. -Isl May, 1955. - Whereas the Govenor is of opinion that it would be in the public interest that the commodities men- tioned below, being commodities liable hitherto to taxali_on under E the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act YI of 1941), should be taxed under the West Bengal Sales Tax Act, 1954 (West Bengal Act IV of 1954);

Now, therefore, in exercise of the power conferred by section "'" 25 of the West Bengal Sales Tax Act, 1954 (West Bengal Act IV F of 1954), the Governor is pleased hereby to specify such com- modit.ies under that section. ·• The commodities referred to above:

(1) (Omitted as unnecessary). G (2) black and white pepper, known as go! mirch, that is to say, the berry of the plant "piper Nigrum", whole, broken, ground or pow- "' dered, or of any other form or description whatsoever;

(3) Turmeric, known locally as haridra or halud, that is to say, the H

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A product obtained from the plant "Curcuma Longa", whole, broken, ground or powdered, or any other from or description whatsoever;

(4) (Omitted as unnecessary);

(5) (Omitted as unnecessary)." B By another Notification No.1915-F.T. dated May 10, 1963 issued under Section 4 of the 1954 Act, the Governor of West Bengal notified the rates of tax on several commodities including black and white pepper and turmeric. In so far as it is relevant, it reads thus:

C "No.1915·F.T.-10th May, 1963.-In exercise of the power con- ferred by section 4 of the West Bengal Sales Tax Act, 1954 (West Bengal Act IV of 1954), the Governn1 is pleased hereby to fix in respect of the notified commodities ·: ecifr·J in column 2 of the table below, the rates specified in th·• corresponding entries in D column 3 of the said table as I he rates ·1t which: tax under the said Act shall be paid by a dealer on his tu mover.

Table SI.No. Notified commodity Rate of tax

E 1, 2 (Omitted as unnecessary). &3

4. Betel-nuts, Llack and white Pepper: Turme:ric, Four per Cloves and Cinnaamon or Cassia, as .pecified in ccntum 11otificatio11 No.885- F. T., dated 1st Mai. 1955. F S.No. (5) to (16) - (Omitted as unnece ;sary).

This will take effect from the 10th day of May, 1963."

(Emphasis supplied) G ' It is the common case of the parties before us that under the 1954 Act, the ta.x is a single point tax leviable at the first point of sale.

The appellant says that he purchases whole black pepper and whole turmuic within the State of West Bengal and converts them into pepper H powder and turmeric powder for sale. His contention is that black pepper

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and pepper powder and similarly turmeric and turmeric powder are one and the same goods and inasmuch as whole black pepper and whole turmeric suffered tax when it was sold by the selling dealer to the appellant, the powders derived from them are not exigible to tax when sold by him. For the same reason, he says, he need not register himself as a dealer under the Act. The department, however, took the view that pepper and pepper powder and similarly, tur 1eric and turmeric powd~r are different goods and, therefore, the peppei powder and turmeric powder when sold by the appellant arc exigible to tax. The Tribunal has upheld the contention of the Revenue.

Dr. Shanker Ghosh, learned counsel for the appellant relied upon the decisions of this court in Alladi Venkateshwarlu v. State of Andhm Pradesh, 41 S.T.C. 394 and Commissioner of Sales Tax, Lucknow v. D.S. Bisr & 01!., (1980] 1 S.C.R. 593 in support of his submission that pepper and peppe1 powder and turmeric and turmeric powder are one and the same goods. He submitted that pepper is sometimes used in its original form and sometimes in its powdered form. Similarly, turmeric is also used ~ sc,metimes in its original form and sometimes after converting it into powder. According to learned counsel, pepper powder is but a form of pepper and similarly turmeric powder is but only a form of turmeric. They are not diferent goods. Counsel submitted that just as parched rice and puffed rice are different forms of rice (A//adi Venkateshwarlu), so is the pepper powder a form of pepper and turmeric powder a form of turmeric.

The learned counsel for the State of West Bengal, on the other hand, submitted that pepper and pepper powder and similarly turmeric ... and turmeric powder are two different goods just as wheat and wheat-flour are different goods. The learned counsel relied upon the recent decision of this court in Rajasthan Flour Mills Association v. State of Rajastilan, (1993] 3 SCALE 600 in support of his submission. He also relied. upon the decisions of this court in Ganesh Trading Company, Kamal v, State of Haryana, :>2 S.T.C. 623 and State of Kamataka v. Rag/Juram S/Jetty, 47 G S.T.C. 369. In the latter case, learned counsel pointed out, it has been held that when wheat is ground into flour, wheat is consumed in the manufac- ture of wheat-flour and a different product emerges and similarly, when wheat-flour is baked as a bread,thereemerges yet another different goods. Learned counsel, therefore, submitted that on the same analogy when H

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A pepper and turmeric are ground iullo powder, they change their shape and emerge as different goods.

We are of the opinion that so far as whole black and "''.:;te pepper and pepper powder is concerned, they are the same goods, whether applying the functional test or the: test of common parlance/commercial B parlance. The analogy of paddy arid rice or of wheat and wheat powder is not apt. Nobody consumes paddy. as it is. Similarly, no one eats whole wheat. They are consumed afier milling them into rice or flour, as the case may be. But so far as the pepper i.s concerned, it is used equally in whole as well as well powdered form. It is for this reason perhaps that the c entry in Notification No.885-F.T. dated May 1, 1955 speaks of "Black and white pepper-whole, broken, ground or powdered or of any other form or description whatsoever'. It is equally significant that the Notification No.1915-F.T. dated May 10, 1%3 refers to these commodities "as specified in Notijicatio11 No.885-F.T. dated 1st May, 1955". Black and white pepper D "as specified in Notification No.885" means black and white pepper, whether whole, powdered, broken or in any other form.

So far as turmeric and turmleric powder is concerned, the position is not identical, applying the functional test. But inasmuch as turmeric is also E described in Notification No.885 in the same manner as black and white pepper and also because Notification No.1915 refers to it with reference to the said earlier Notification, we are inclined to say that turmeric and turmeric powder must also be treated as same goods.

Sri Santosh,Hegde, learne:d counsel for the State of West Bengal F submitted that the use of the words "that is to say" in items (2) and (3) in Notification No. 885-F.T. serve to indicate that broken, ground or pow- dered pepper is different from pepper. Support is sought to be derived from the decision of this court i10 Rajastha11 Flout Mills Association where the meaning of the said words was dealt with reference to Section 14(i) of G the Central Sales Tax Act. It was held in the said decision that the said words had the effect of limiting, the operation of Section 14 to the goods specifically mentioned thereunder and not to their products. In other words, it was held that when Section 14(i) (iii) mentioned wheat, it meant wheat alone and not the products of wheat like flour, maida and suji. We H do not see how the said decision assists the argument of the learned

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counsel. In items (2) and (3) of Notification No.885-F.T., the words "that A is to say" seem to refer to the botanical expression following the said words. Be that as it may, the said words cannot, by any stretch of imagination, be taken to indicate that broken, powdered or any other form of pepper are different goods from pepper.

The appeals are allowed lccordingly. The judgment of the West B Bengal Taxation Tribunal is set ' side. There shall be no order as to costs.

R.P. Appeals allowed.