The Supreme Court in a case relating to the U.P. Trade Tax Act, 1948 has held that the “tinted glass sheets” is liable to be taxed as “goods or wares made of glass” under Entry No. IV of the Notification No. 5784.

The Court was dealing with a batch of civil appeals whereby the point that arose for consideration was 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 September 7, 1981 being Entry No. IV or as unclassified item.

The two-Judge Bench comprising Justice S. Ravindra Bhat and Justice Aravind Kumar observed, “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.”

The Bench relied upon the judgment in the case of M/s. Indo International Industries v. Commissioner of Sales Tax, Uttar Pradesh (1981) 2 SCC 528 consisting of almost similar issue namely whether hypodermic clinical syringes could be regarded as “glass ware” under Entry 39 of First Schedule of UP Sales Tax Act, 1948 and the court negatived the plea of the assessee by holding that in taxing statues, words and phrases must be construed as understood in popular or commercial parlance, and not technically.

Senior Advocate S.K. Bagaria appeared on behalf of the appellant while Senior Advocate R.K. Raizada appeared on behalf of the respondent.

Brief Facts -

The appellant dealt in 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 assessment proceedings, the assessing officer opined after enquiry that tinted glass was manufactured by the assessee in a separate unit and the process adopted for its manufacture was different from manufacture of sheet glass. He concluded in his assessment orders that in the ordinary and common parlance, the tinted glass was not recognised or understood as sheet glass. Hence, the assessing officer imposed a tax @15% on the sale of the goods by holding that the 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. The appeals filed against the said assessment orders were dismissed and the imposition of tax @15% was upheld.

The appellate authority also relied on the meaning of the word “goods” as reflected in a circular for arriving at a conclusion that only plain glass sheet was taken as unclassified item and not the goods in question. The assessee was unsuccessful before the Trade Tax Tribunal and therefore, pursued its grievance before the High Court by filing a revision petition but the same was dismissed. Thereafter, the notices demanding tax @15% for the tax assessment years 1992-93 to 1996-97 came to be challenged before the High Court but the plea was dismissed. Hence, in all the appeals, the common question of law arose and they were taken up together for consideration, adjudication, and determination thereof by the Apex Court.

The Supreme Court in view of the facts and circumstances of the case noted, “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.”

The Court said that neither the dictionary meaning nor the common parlance theory would come to the rescue of the appellant.

“The arguments canvassed by the learned senior counsel 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”, further added the Court.

Accordingly, the Apex Court dismissed the appeals and refused to interfere in the impugned judgments.

Cause Title- M/s. Triveni Glass Limited v. Commissioner of Trade Tax, U.P. (Neutral Citation: 2023INSC892)

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