Full Judgment
P.C. Naik, J.
1. This is an application by the Revenue under Section 24(2)(b) of the Orissa Sales Tax Act, 1947, requiring the Tribunal to refer to the High Court for its opinion on the following question of law.
'Whether the honourable Sales Tax Tribunal is justified to treat 'denatured spirit' as unspecified item ?'
2. The facts in brief are that the petitioner is a dealer of paints, varnish, turpentine oil, denatured spirit and the like products. In response to a notice under Section 12(4) of the Orissa Sales Tax Act, 1947 (in short, 'the Act'), the proprietor had produced purchase accounts for the period 1990-91. Admittedly no sale or stock account was maintained by him and on the basis of purchase account he paid tax by adding 5 per cent margin of profit over the purchase. In the circumstances, best judgment assessment was made by the assessing officer and gross turnover was estimated at Rs. 5,71,225.25 and taxable turnover was determined at Rs. 3,04,414.04. It was found that the dealer had paid tax at 8 per cent on sale turnover of denatured spirit for the period from April 1, 1990 to June 30, 1990 and at 12 per cent for the period July 1, 1990 to March 31, 1991. In the opinion of the assessing officer tax was paid at a lesser rate and accordingly he levied tax at 12 per cent for the period from April 1, 1990 to June 30, 1990 and 16 per cent from July 1, 1990 to March 31, 1991. Being aggrieved, the petitioner preferred an appeal in which the levy of tax was upheld which led to filing of a second appeal by the dealer before the Tribunal. The Tribunal being of the opinion that as denatured spirit was not specified under serial No. 66 of the taxable Schedule as it stood then it was to be treated as an unspecified goods and has to be taxed as such under the residuary entry. Accordingly, the levy of tax at 12 per cent and at 16 per cent for different period under Sl. No. 66 was set aside. Aggrieved therewith the Revenue moved an application under Section 24(1) of the Act requiring the Tribunal to refer a question to the High Court for its opinion. Rejection of the said application has given rise to the present proceedings.
3. Before proceeding further it will be appropriate to refer to the relevant serial Nos. 66 and 101 as these stood at the relevant time which read thus :
'66. Paints and varnishes, acids, dyes, lacquers, enamels, glue paints, turpentine oil, duplicating ink, polish and boot polish.'
'101. All other articles'.
4. To begin with it may be stated that 'denatured spirit' is not an item included in serial No. 66 of the taxable Schedule nor is it found included in any other entry. However, it appears that the assessing officer as also the first appellate forum included denatured spirit in the said entry probably because of the decision of this Court in State of Orissa v. New Orissa Paints and Dyes [1976] 37 STC 475 in which it was observed that denatured spirit in ordinary parlance is a commodity used for the purpose of varnishing, painting or colouring and in that analogy, it is to be placed on the footing of articles like paints, colours and varnish. That, however, was a matter in which the question for determination was whether denatured spirit was liquor and as such tax-free and the finding was that it was not liquor and as such denatured spirit was not tax-free. It appears that the observations of the court in the said judgment have been understood out of context.
5. It is a settled position of law that a taxing statute is to be strictly construed and the words used are to be given their natural meaning. It is also the settled position that entries in the Schedule are to be interpreted in their popular sense unless they are expressly defined in the enactment. In other words, they are to be construed according to the common commercial understanding of the term and in the sense in which it is sold by the dealer and purchased by the consumer. In common parlance paints, varnish, turpentine oil and spirit have a definite meaning and each of them is a separate well-known commercial commodity. If one were to go to a dealer to purchase, let us say, varnish he would not accept turpentine oil and likewise if he wanted to purchase denatured spirit, he would not accept varnish or turpentine oil. Denatured spirit may go into the making of fine varnish and is an important ingredient for preparing wood polish but it is neither paint nor a varnish nor turpentine oil. It has a distinct identity in the commercial world and in common parlance. Admittedly, denatured spirit is not included in the entry in question which for ready reference has been quoted above and it cannot be included therein by fiction merely because it may go into the making of varnish of fine polish. Since it does not fall in the entry in question nor is there any other entry in which it has been specifically included, it follows that it will fall under the residuary entry, which according to the taxing statute covers all other articles unless expressly provided to be tax-free. Accordingly, we do not find any error to have been committed by the Tribunal in coming to the conclusion it did.
The tax revision, therefore, fails and is dismissed.
There shall, however, be no order as to cost.
P.K. Patra, J.
6. I agree.