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V.N.M.S. Ayyachami Nadar and Bros. Vs. the Board of Revenue (Commercial Taxes) - Court Judgment

SooperKanoon Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberT.C. Nos. 87 to 92 of 1975 (Appeal Nos. 1 to 6 of 1975)
Judge
Reported in[1979]43STC278(Mad)
AppellantV.N.M.S. Ayyachami Nadar and Bros.
RespondentThe Board of Revenue (Commercial Taxes)
Appellant Advocate A. Kamala Devi, Adv.
Respondent Advocate K. Venkataswami, the Additional Government Pleader
DispositionAppeal allowed
Excerpt:
- - it is stated that under normal conditions 'masi' keeps well for over a year. if special precautions are taken to ward off insects and if the product is occasionally resmoked and redried, it will keep well for 3 to 4 years. there is no qualification like that in the notification......over a period of about 3 to 4 weeks is involved. on the other hand, in the process of producing dried fish, the fish is cut and merely salted and dried. in the case of cheaper varieties of dried fish, they are not even cut before salting and drying. the 'masi' has a longer shelf life and fetches considerable higher price. the process of boiling and smoking makes 'masi' a product entirely different from dried fish. just because in the chain of different stages of processing, drying is involved, it cannot be claimed that 'masi' is also a variety of dried fish. both are commercially distinct and different. the reasons that no chemical is used in the process and it is not canned or tinned, are not relevant. in g. o. press no. 1764, revenue, dated 5th april, 1960, only sale of fish is.....
Judgment:

Govindan Nair, C.J.

1. The short question arising in these appeals turns on the interpretation of the notification, which reads as follows :

G. O. No. 1764, Revenue, dated 5th April, 1960, as amended by G. O. No. 5274, Revenue, dated 22nd December, 1960, with retrospective effect and Notification III No. 384 of 1964 dated 18th September, 1964.-'In exercise...the Governor of Madras hereby exempts with effect from the 1st April, 1960, all sales of vegetables other than dried and dehydrated vegetables, fresh fruits, betel and plantain leaves, flowers, eggs, meat and fish (other than canned meat and fish) and the purchases of potatoes from the tax payable under the said Act.

2. The said Act is the Tamil Nadu General Sales Tax Act. The commodity with which we are concerned has been termed as 'masi'. The method by which 'masi' is prepared has been elaborately dealt with in paragraph 6 of the Board's order. It is as follows :

I have carefully examined the objections in the reply and the arguments of the learned counsel with reference to the connected records. To decide the issue, it is necessary to go into the process employed in producing 'masi'. The process as described in the letter of the Director, Central Institute of Fisheries Technology, Ernakulam, a copy of which was filed by the counsel, is briefly given below:

Masi is prepared from tune fish. The heads and guts of the fresh tune fish are removed and the fish is cut lengthwise into fillets. They are washed and each strip is wound in cocoanut leaves to prevent the meat from breaking away into pieces during further processing. A mixture of sea water and fresh water in 3 : 1 ratio is boiled and the strips are transferred into the boiling water. The boiling is continued for about an hour. It is allowed to cool for about 6 to 8 hours. The boiled fish strips are then taken out and spread on an iron grill placed over a smoking oven. The smoking is continued for about 3 to 4 hours. After smoking, the cocoanut leaves covering the fish are removed and the fish strips are spread out in the sun for drying. The process of smoking and drying is repeated 3 or 4 times till the meat strips are hard and dark brown in colour. The fish is then placed in a closed dealwood box or barrel or in a dark room covered with gunny for about 2 to 3 weeks. This improves the flavour and enhances the keeping quality of the product. It is stated that under normal conditions 'masi' keeps well for over a year. If special precautions are taken to ward off insects and if the product is occasionally resmoked and redried, it will keep well for 3 to 4 years.From the procedure outlined by the Institute, it is quite evident that an elaborate process of boiling, smoking, drying and promoting the growth of grey fungus spread over a period of about 3 to 4 weeks is involved. On the other hand, in the process of producing dried fish, the fish is cut and merely salted and dried. In the case of cheaper varieties of dried fish, they are not even cut before salting and drying. The 'masi' has a longer shelf life and fetches considerable higher price. The process of boiling and smoking makes 'masi' a product entirely different from dried fish. Just because in the chain of different stages of processing, drying is involved, it cannot be claimed that 'masi' is also a variety of dried fish. Both are commercially distinct and different. The reasons that no chemical is used in the process and it is not canned or tinned, are not relevant. In G. O. Press No. 1764, Revenue, dated 5th April, 1960, only sale of fish is exempt. Fish as understood commonly will refer only to fresh fish. Subsequently, in Government Memo No. 25439 M2 60-'l, Revenue, dated 21st April, 1960, it was clarified that dried and salted fish is also exempt. As 'masi' is not merely dried fish, it is not covered by the exemption granted by the Government. The Appellate Assistant Commissioner has also relied on the reply given to the Accountant-General in Board's Reference No. A2/3634/70 dated 27th August, 1970. This reference relates to dressed fowls. The Accountant-General was informed that 'meat' includes dressed fowls also. The Board's reference has no bearing on the issue. The orders of the Appellate Assistant Commissioner of Tirunelveli, treating 'masi' as fish or dried fish and allowing exemption, are not correct.

3. The crucial sentence in the aforesaid paragraph on the basis of which the assessee lost its case by the intervention of the Board in mo motu revision as against the conclusion reached by the Appellate Assistant Commissioner who had held that the exemption under the notification, which we have extracted, would apply, turns on the following sentence in the aforesaid paragraph, which we have extracted :

Fish as understood commonly will refer only to fresh fish.

4. If that is so, one wonders whether one would be able to say that 'fish' would apply to 'dried fish' but not to dead fish, or fish would apply to boiled fish. There is no qualification like that in the notification. All fish are excluded excepting canned fish. There is no case that the fish 'masi' with which we are concerned is canned fish. Excepting canned fish, fish in any other form is exempt by the notification. There is no justification whatever to reopen the assessments that have been made for the years 1966-67 to 1971-72.

5. We, therefore, allow these appeals, set aside the order of the Board of Revenue and hold that the turnover relating to 'masi' is not liable to be taxed. We have disposed of these six tax cases by a common judgment because the matter has been disposed of by a similar order of the Board of Revenue, Commercial Taxes, and the same question arises on the same facts. The appellant in these cases will have costs-one set, including counsel's fee Rs. 500.


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