Holding

The term 'jewellery' under Section 5(1)(viii) already included ornaments of gold, silver, platinum or other precious metals irrespective of stones, and Explanation 1 was merely clarificatory.

Summary

The Supreme Court examined whether the term "jewellery" in Section 5(1)(viii) of the Wealth Tax Act, 1957, as it stood before the 1971 amendment and the addition of Explanation 1, covered gold ornaments that did not contain precious or semi‑precious stones. The High Court had held that such ornaments were excluded, but the Revenue appealed. The Court considered the ordinary meaning of "jewellery" and the purpose of the Explanation, concluding that the Explanation merely clarified an already existing broad meaning. It held that even before the Explanation, "jewellery" included ornaments made of gold, silver, platinum or other precious metals irrespective of stones. Consequently, the appellant’s appeal was allowed, and the High Court’s decision was set aside.

Issues considered

Whether the word 'jewellery' in Section 5(1)(viii) of the Wealth Tax Act, 1957, prior to the 1971 amendment and Explanation 1, includes gold ornaments without precious or semi‑precious stones.

Legislation cited

Finance Act No. 2 of 1971
Wealth Tax Act, 1957s. 27(1), s. 5(1)(viii)

Subjects

wealth taxjewellerystatutory interpretationretrospective amendmentFinance Act 1971Section 5(1)(viii)exemptiongold ornaments

Judgment

I
COMMISSIONER OF WEALTH TAX, ORISSA, BHUBANESWAR A··
v.
SMT. BINAPANI CHAKRAVARTY

MARCH 28, 1995

[S.C. AGRAWAL, B.L. HANSARIA AND B
SUJATA V. MANOHAR, JJ.]

Wealth Tax Act, 1957:Section S(i)(viii}-Wliether the word jewellery
prior to the amendment of the section and the introduction of the Explanation
/ by the Finance Act (No.2) of 1971 could include jewellery made of silver, C
\ platinum or any other precious metal or alloy without previous or semi-pre-
cious stones embedded on them-Held:Even before coming into force of the
explanation jewellery would include such ornaments.
The Finance Act of 2 of 1971 amended the provisions of Section
5(1) (viii) of the Wealth Tax Act, 1957 with retrospective effect from 1st of D
April, 1963. By the same Finance Act of 1971, the "Explanation, however,
was made effective only prospectively from 1.4.1972.

It has been urged by the assessee that it is on account of Explanation
1 to Section 5(1)(viii) that the term "jewellery" could also include orna- E
ments made only of gold, silver, platinum or any other precious metal or
alloy though no precious stones are. embedded in. them. It further con·
tende<! that in the absence of such an Explanation during the relevant
period, the term ·~ewellery" would cover only ornaments studded with
jewels or precious metal or alloy. The High Court allowed the petition
holding that Explanation I by Finance Act (No.2) of 1971 would not 'take F
in gold ornaments without precious or semi-precious stones embedded in
,.---· them. Against that order, Revenue preferred the present appeals.

Allowing the appeals, this Court

HELD :1. Undoubtedly, under s.5(1) of the Wealth-Tax Act the G
Explanation has been introduced by th."e Finance Act of 1971, partly to
clarify the position. The Explanation provides an extensive definition of
"jewellery". It includes precious ornaments made of gold, silver, platinum
or any other precious metal whether or not containing any precious or
semi-precious stones. It also covers, within the meaning of the term, such H
1183
1184 _$UPREME COURT REPORTS· [1995] 2 S.C.R.

A items whicb may or may not be sewn into any wearing apparel. It also _
includes precious and semi-precious stones whether or not set itrany
furniture, utensils or apparel. The Explanation may have extended the
meaning of ''.jewellery" to cover, for example, precious stones by themselves
or precious stones set in furniture or utensils. But in so far as it includes
ornaments made of gold, silver, platinum or any other precious metal or
B alloy, it is merely clarificatory in nature. Merely because ornaments made
of gold and silver are now expressly included in Explanation 1, it is not
possible to hold that they were earlier excluded from the meaning of the
term ''.jewellery". [1188-B·D]

C Commissioner of Wealth-Tax, Delhi-II v. Smt. Savitri Dev~l40 ITR -~
S2S, affirmed.

Commissioner of Wealth-Tax, Delhi-III v. Rukmani Dev~l42 ITR 41;
Commissioner of Wealth-Tax, West Bengal-I, Calcutta v.Aditya Vikram Birla,
114 ITR 711, over ruled..
D
Commissioner of Wealth-Tax, M.P. v. Smt. Sonal K Amin, 127 ITR
427; Commissioner of Wealth-Tax, Gujarat-I v. Jayantilal Amratla~ 102 ITR
105; Commissioner of Wealth-Tax, Lucknow v. His Highness Maharaja Vib-
huti Narain Singh, 117 ITR 246 and Nandkishore Girdharilal Modi v. Com-
E missioner of Wealth-Tax, M.P., 132 ITR 868, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1206-
1212 of 1977.

From the Judgment and Order dated 26.9.1975 of the Orissa High
F Court in S.J.C.Nos. 87-93 of 1974.
J. Ramamurthy and Ms. A. Subhashini for the Appellant.
--r---
The following Judgement of the Court was delivered by

MRS. SUJATA V. MANOHAR, J. These appeals by special leave
'G
arise from a common judgment of the High Court of Orissa in seven
~ef~rence Applications before it under Section 27(1) of the Wealth Tax
. :A'.ct, 1957. The High Court was required to consider the following ques-
tion:-

H "Whether the word 'jewellery' in sectiod 5(1)(viii) of the "'.ealth-
C. OFWELTHTAXv. SMT. B. CHAKRAVARTY [MRS. S.V. MANOHARJ.J 1185
Tax Act, 1957 prior to the amendment of the section and the A
introduction of the Explanation by the Finance Act (No. 2) of 1971
could take in gold ornaments without precious or semi -precious
stones embedded on them?"

The High Court has answered the question thus:-

"The word 'jewellery' in section 5(1)(viii) of the Wealth Tax Act
of 1957 prior to amendment of the provision and introduction of
Explanation I by the Finance Act (No. 2) of 1971 would not take
in gold ornaments without precious or semi-precious stones em-
;r bedded on them."
c
' The Commissioner of Wealth Tax has filed the present appeals from the
above decision.

The relevant assessment years are 1965-66 to 1971-72. The relevant
valuation dates are 31st of March of each of the years in question. We are, D
therefore, required to consider the provisions of Section 5(1)(viii) of the
Wealth Tax Act, 1957 as in force during the relevant period. Section 5 of
the Wealth Tax Act, 1957 deals with exemptions from wealth tax granted
in respect of certain assets. Section 5(1)(viii), prior to its amendment by
/ the Finance Act 2 of 1971, was as follows:-
E
"5(1): Subject to the provisions of sub-section (lA) wealth-tax shall
not be payable by an assessee in respect of the following assets,
and such assets shall not be included in the net wealth of the
assessee --

I (1) x x x x x x F

x x x x x x

(viii) furniture, household utensils, wearing apparel, provisions and
other articles intended for the personal or household use of the G
assessee."

Section 5(1)(viii) was interpreted in the context of the provisions of Section
5(1)(xiii) and 5(1)(xv) by this Court in the case of Commissioner of Wealth-
Tax, Gujarat v. Arundhati Ballaishna, 77 ITR 505. The Court said that
jewellery intended for the personal use of the assessee would come within H
. 1186 .. SUPREME COURT REPORTS [1995] 2 S.C.R.

A the scope of the exemption granted under Section 5(1)(viii)-being "other
articles inte~ded for the personal.. ..... use of the assessee". As a conse-
quence, t~~ Finance Act 2 of 1971 amended the provisions of Section c
5(1)(vii~) ·with retrospective effect from 1st of April, 1963, to read as
follo'Vs:-

B I "5(1)(viii): furniture, household utensils, wearing apparel,
·provisions anci other articles intended for the personal or
household use of the assessee, but not including jewellery. "

{underlining ~s)

C .By the same Finance Act of 1971, Explanation 1 was also added to Section
5{1){viii). The Explanation, however, was made effective only prospective-
ly, with effect from 1.4.1972. Explanation 1 is as follows :-

"Explanation 1 : For the purposes of this clause and clause (xiii),
D 'jewellery' includes -

(a) ornaments made of gold, silver, platinum or any other predous
metal or any alloy containing one or more of such precious metals,
whether or not containing any precious or semi- precious stone,
<,
and whether or not worked or sewn into any wearing apparel.:
E.
(b) precious or semi-precious stones, whether or not set in any
furniture, utensil or other article or worked or sewn into any
wearing apparel. n

In the present appeals we are concerned with the period during
F which the retrospectively amended Section 5{1){viii) was in operation but
without Explanation! (which came into effect from 1st of April, 1972). We I
----..._
have to consider what is excluded from the benefit of the exemption
granted under Section 5(1)(viii), Is it only those items of jewellery which
are studdt<d with precious or semi-precious stones 'or whether all orna- --,.,.--
1
G ments and jewellery made out of precious metals (such a5 gold, silver or
piatinum or alloys with precious metals) are excluded .from the exemption,
although they may not be studded with precious or semi-precious stones?

It has been urged before us by the assessee that it is on account of
Explanation 1 to Section 5(1)(viii) that .the term "jewellery" would also
H include ornaments made only of gold, silver, platinum or any other precious
C. OF WELTHTAX v. SMf. B. CHAKRAVARTY [MRS. S.V. MANOHARJ.J 1187

metal or alloy containing such precious metal, even though no precious A
stones are embedded in them. It is submitted that in the absence of such .
an Explanation during the relevant period, the term "jewellery" would cover
only ornaments studded with jewels or precious stones. It would not cover
in its ambit ornaments made only of gold, silver, platinum or any other
precious metal or alloy.
B
To interpret the word "jewellery" as such without the benefit of
Explanation 1, we must first consider how the term "jewellery" is ordinarily
understood. In the New Shorter Oxford Dictionary, "jewellery" is defined
as:
c
"gems or ornaments made or sold by jewellers, especially precious
stones in mountings; jewels collectively or as a form of adornment."

"Jewel" is defined as :

"An article of value used for (personal) adornment, especially one D
made of gold, silver, or precious stones...... a precious stone, a gem;
especially one worn as an ornament."

The terms "jewel" and "jewellery", therefore, refer to articles of value used
for adornment, especially those made from gold, silver or precious stones.
The terms are, therefore, wide enough to cover not merely precious stones E
or articles of adornment made with the use of precious stones, but also
other articles of value made from gold, silver, platinum or precious metals.
Ordinarily speaking, when a person talks about jewellery, he includes
ornaments which are made of gold, silver or any other precious metal also
irrespective of whether these articles have precious stones embedded in F
them or not.

The difference which is sought to be made out between ornaments
which contain precious stones, and ornaments of gold, silver and platinum
which do not have precious stones embedded in them, appears to be
artificial. The term "jewellery" is not confined in ordinary parlance to only G
those ornaments which have precious stone embedded in them. It covers
all articles of value used for adornment. A jewellery shop normally sells
., not just precious stones or articles made of precious stones; it certainly
sells ornaments of gold and silver. It may be that in our local languages,
different kinds of bangles, necklaces and other ornaments carry different H
1188 SUPREME COBR'f-REPORTS . [1995) 2 S.C.R.

. ..:\- arid specific names depending upon their design and craftsmanship. But
these are all covered by the generic term "jewdlery".

Undoubtly, the Explanation has been introduced by the Finance Act
of 1971, partly to clarify this position. The Explanation provides an exten-
sive definition of "jewellery". It includes ornament made of gold, silver,
B platinum or any other precious metal whether or not containing any
precious or semi-precious stones. It also covers, within the meaning of the
term, such items which may or may not be sewn into any wearing apparel.
It also includes precious and semi-precious stones whether or not set in
any furniture, utensils or other article, or worked or sewn into any wearing
C apparel. The Explanation may have extended the meaning of "jewellery" to
cover, for example, precious stones by themselves or precious stones set
in furniture or utensils. But insofar as it includes ornaments made of gold;
silver, platinum or any other precious metal or alloy, it is merely
clarificatory in nature. Merely because ornaments made of gold and silver
D are now expressly included.in Explanation 1, it is.not possible to hold that
they were earlier excluded from the meaning of the term "jewellery").

In the case of Commissioner of Wealth-Tax, Delhi-II v. Smt. Savitri
Dev~ 140 ITR 525, a Division Bench of the Delhi High Court held that the
word "jewellery" as set out in the dictionaries arid as understood in common
E paralance, includes gold ornaments made for personal use. These are
_ atmost always a jeweller's job and cannot be made by anyone. The Delhi
High Court has held that the Explanation cannot take away the ordinary
meaning of the word "jewellery''. The artificially enlarged meaning as given
by the definition in Explanation 1 also includes, by way cif abundant
-p caution, the natural meaning of the term. Hence jewellery, even before
coming into force of the Explanation 1, would include gold ornaments. We
agree with the reasoning of the Delhi High Court. This vie~ is reiterate,d
in Commissioner of Wealth-Tax, Delhi-Ill v. Rukmani Devi,142 ITR 41.

G
I ~

A Similar view has been taken l:>y the Gujarat High Court in the case
of Commissioner of Wealth-Tax, Gujarat-Iv. Jayantilal Amratlal, 102 ITR
----
1

105; by the Alahabad High Cort in the case of Commissioner of Wealth-Tax,
Lucknow v. His Highness Maharaja Vibhuti Narain Singh, 117 ITR 246, and
by the Madhya Pradesh High Court in the case of Nandkishore Girdharilal
v.
Modi Commissioner of Wealth-Tax, M.P., 132 ITR 868. Another Bench
H of the Madhya Pradesh High Court in the case of Commissioner of Wealth-
. .
C. OFWELTHTAXv. SMT. B. CHAKRAVARTY [MRS. S.V. MANOHARJ.) 1189
Tax, M.P. v. Smt. Sona/ K. Amin, 127 ITR 427 has, however taken a A
contrary view. The Caicutta High Court has also taken a contrary view in
the case of Commissioner of Wealth-Tax, West Bengal-I, Calcutta v. Aditya
Vikram Bir/a 114 ITR 7ll. For the reasons which we have set out above,
we do not agree with the contrary view expressed by the Calcutta High
Court in Aditya Vikram. Birla's case (supra) and by the Madhya Pradesh B
High Court in Sonat K.Amin's case (supra). The Calcutta High Court has
placed some emphasis on different vernacular terms used for different
types of ornaments. In our view, this is not, in any manner, conclusive of
the question whether the term "jewellery" includes ornaments made of
1 precious metals such as gold or silver. The contrary decisions are, there-
fore, overruled. C
In the premises, the appeals are allowed with costs.

KS.D . Appeals allowed.

. _.,.._- -