Holding

The word 'mentioned' in Entry 24‑B means 'described' or 'set forth', so the concessional 2% rate applies to all refined vegetable oils obtained from the non‑refined oils described in Entry 24‑A, regardless of tax paid on the non‑refined oil.

Summary

The Andhra Pradesh government issued circulars interpreting Entry 24‑B of the Andhra Pradesh General Sales Tax Act, 1957 to limit the concessional 2% tax rate on refined vegetable oils only to those obtained from non‑refined oils that had already been taxed under Entry 24‑A, imposing a 10% rate otherwise. The High Court struck down the circulars but held that the 2% rate applied only when the non‑refined oil had suffered tax. L.T.C. Agro Tech Ltd. challenged this interpretation before the Supreme Court. The Court examined the meaning of the word "mentioned" in Entry 24‑B and concluded that it merely means "described" or "set forth", not "that has suffered tax". Consequently, the 2% rate applies to all refined vegetable oils obtained from the non‑refined oils listed in Entry 24‑A, irrespective of whether tax was paid on the non‑refined oil. The assessments based on the State's interpretation were set aside and the State was ordered to refund the amounts deposited by the appellants.

Issues considered

Whether the word 'mentioned' in Entry 24‑B of the First Schedule of the Andhra Pradesh General Sales Tax Act, 1957 limits the concessional tax rate to refined oils obtained from non‑refined oils that have suffered tax under Entry 24‑A.
Whether the State's circulars correctly interpreted Entry 24‑B for the purpose of levy of sales tax.

Legislation cited

Andhra Pradesh General Sales Tax Act, 1957s. First Schedule Entry 24‑A, s. First Schedule Entry 24‑B

Subjects

Statutory interpretationSales taxAndhra Pradesh General Sales Tax ActEntry 24‑BWord 'mentioned'Concessional tax rateRefined vegetable oilNon‑refined oilCircularsRefund

Judgment

A l.T.C. AGRO TECH LTD.
V.

COMMERCIAL TAX OFFICER AND ORS.

JULY 25, 2001

B [S.P. BHARUCHA, Y.K. SABHARWAL AND BRIJESH KUMAR, JJ.]

Sales Tax:

Andhra Pradesh General Sales Tax Act, 1957-First Schedule-Entries
C 24-A and 24-B-Refined oil and non-refined oil-Refined oil obtained from
non-refined oil mentioned in Entry 24-A-Meaning of-Held, it means non-
refined oil described or set-forth under the Entry and does not mean non-
refined oil subjected to tax under the Entry.

Words and Phrases :
D
'Mentioned'-Meaning in the context of an Entry in a Schedule to Sales
Tax laws.

Entry 24-A of the First Schedule to the Andhra Pradesh General Sales
E Tax Act, 1957 deal with non-refined vegetable oil and Entry 24-8 deal with
refined vegetable oil obtained from non-refined oil mentioned in Entry 24-A.
Respondent-State issued Circulars under the Act clarifying Entry 24-8. The
Circulars stated that the concessional rate of 2% sales tax under Entry 24-8
is available only to those refined oils, which are obtained from non-refined
oils that had suffered tax under Entry 24-A and that imposed refined oils,
F which have not suffered tax under Entry 24-A, are taxable at a higher rate
of 10% under the Seventh Schedule to the Act. Appellants filed Writ Petitions
before High Court challenging the Circulars issued by the respondent-State.
The High Court quashed the Circulars but, however, interpreted Entry 24-8
by holding that only those refined vegetable oils are taxable which have
G suffered tax in the non refined capacity under Entry 24-A. "---
In appeals to this Court, the appellants contended that the word
'mentioned' used in Entry 24-8 applied to all vegetable refined oils that were
obtained from non-refined oil of the kind described in Entry 24-A; that the
word 'mentioned' does not mean the words 'that has suffered tax' under
H Entry 24-A; that where the intention was to apply an Entry only to articles
18
l.T.C. AGRO TECH LTD. v. COMMERCIAL TAX OFFICER 19
that had suffered tax under the Act, the Entry specifically stated so; and that A
Entry 24, before amendment, used the words 'if it had met the tax under the
Act' and these words are not mentioned in the amended Entries 24-A and
24-B.

Allowing the appeals, the Court
B
HELD : 1.1. The words used in Entry 24-B of the First Schedule to the
Andhra Pradesh General Sales Tax Act, 1957 plainly indicate that it is
applicable to all vegetable oil (refined) that is obtained from the kinds of non-
refined oil that are described in Entry 24-A. The word 'mentioned' only means
'described' or 'set forth' and no more. There was, therefore, no justification
for the conclusion that only vegetable oil (refined) obtained from non-refined C
oil that had been subjected to tax under Entry 24-A of the Schedule could be
taxed at the rate of2%. Further, where the Schedule intended to refer to goods
which were made from inputs that had suffered tax under the Act, the
Schedule so stated. The fact that, before its amendment, Entry 24 had used
the words 'if ;t had met tax under the Act' and these words were omitted D
after the amendment would show that the construction now placed by this
Court upon Entry 24-B is correct [20-A; 21-F-H)

1.2. The orders of assessment made on the basis of the interpretation
placed by the State on Entry 24-B are set aside. The State shall refund to the
appellants the sums deposited by them as a condition of stay. [22-A, BJ E
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6362 of
1998.

From the Judgment and Order dated 13.11.98 of the Andhra Pradesh
High Court in W.P. No. 4752 of 1998. F
WITH

C.A. Nos. 6363-73/98, 1862, 3683, 4049-4052, 4615-4620, 4584-4586/
99, 4664 and 4665 of 200 I.

..- F.S. Nariman, S. Ganesh and T.L.V. Iyer, Subhash Sharma, K. Kiran, G
N. Ganpathy, Rajan Narain, Aruneshwar Gupta, C.R. Sridharan, Ms. Sushma
Sharma, Ms. Kumud Singh for M/s. Law Consults for Mis. JBD and Co., Ms.
T. Anamika, G. Prabhakar, Anil Kumar Tandale and K. Ram Kumar for the
appearing parties.

The Judgment of the Court was delivered by H
20 SUPREME COURT REPORTS [2001] SUPP. 1 S.C.R.

A BHARUCHA, J. Leave granted in the special leave petitions.

These appeals call for the interpretation of Entry 24-B of the First
Schedule t<! the Andhra Pradesh General Sales Tax Act, 1957.

The controversy would be clearer if both Entries 24-A and 24-B are
B reproduced. They read thus:

SI. Description of Goods Point of Rate of Effective
No. Levy Tax from

c 24-A Vegetable oils (non-refined)
including groundnut, palm oil,
At the
point of
2 Paise 16.8.95
in rupee
sunflower oil, soya bean oil, first sale
mustard oil, kusum oil, tobacco in the
seed oil, castor oil, washed cotton State
seed oil other than rice bran oil
D and coconut oil (1204)

24-B Vegetable oil (refined) obtained -do- -do- 16.8.95
from non-refined oil mentioned
in item 24-A other than rice bran
oil (1205)
E
The Government of Andhra Pradesh issued a circular on 16th September,
1997 in regard to Entry 248. It said: "Since there is a specific mention of the
non refined oils which are linked to refined oils in item 24-B the only
interpretation that can be offered is that the concessional rate of 2% is
applicable only to those oils which are obtained from non refined oils subject
F to tax under Entry 24-A of I st Schedule. Imported refined oils are, therefore,
taxable at 10% under VII Schedule." The same interpretation was reiterated
on 10th November, 1997 by the office of the Commissioner of Commercial
Taxes.

The two circulars aforementioned and assessments on that basis were
G impugned in writ petitions filed before the High Court of Andhra Pradesh.
The two circulars were struck down, and there is no challenge to that part of
the order. However, the High Court went on to interpret Entries 24-A and 24-
B and said, "Item 24-B lays down that all refined vegetable oils obtained
from non-refined oil mentioned in item 24-A other than rice bran oil are
H subject to tax at the rate of 2% So, there is a condition laid down that only
l.T.C. AGRO TECH LTD. v. COMMERCIAL TAX OFFICER [BHARUCHA, .I.] 2J

those refined vegetable oils are taxable at 2% which have suffered tax in the A
non refined capacity under item 24-A. Those refined vegetable oils which
have not suffered tax under item 24-A have been excluded from the application
of 24-B." This interpretation of Entry 24-B of the High Court is impugned
in the appeals before us.

Learned counsel for the appellants stressed the word 'mentioned' used B
in Entry 24-B and submitted that it only signified that Entry 24-B applied to
all vegetable oil (refined) that were obtained from non-refined oil of the kind
described in Entry 24-A. The word 'mentioned' could not be equated with the
words 'that has suffered tax' under Entry 24-A. Our attention was drawn to
the fact that where the intention was to apply an entry in the Schedule only C
to articles that had suffered tax under" the Act, the entry so stated: as for
example. Entry 158, which read. "Betel-nut powder obtained from arecanut
that has met tax under this Act"~ It was also pointed out that the very Entry
24, before it was amended, had. used the words 'if it had met tax under the
Act' and these words did not occur in the amended Entries 24-A and 24-B.
D
Learned counsel for the State supported the decision of the High Court
and submitted that, given the words of Entry 24-B, only that vegetable oil
(refined) which was obtained from non-refined oil that had suffered tax under
Entry 24-A could be taxed at the rate of two per cent. Vegetable oil (refined)
obtained from non- retained oil which had not suffered tax under Entry 24- E
A fell within the residuary entry of the Schedule and was liable to tax at the
rate of ten per cent.

In our view, the words used in Entry 24-B plainly indicate that it is
applicable to all vegetable oil (refined) that is obtained from the kinds of
non-refined oil that are described in Entry 24-A, that is, from non-refined oil F
other than rice bran oil. The word 'mentioned' only means" described'' or
"set forth" and no more. There was, therefore, no justification for the
conclusion that only vegetable oil (refined) obtained from non-refined oil
that had been subjected to tax under Entry 24-A could be taxed at the rate
of 2 paise. Further, where the Schedule intended to refer to goods which were G
made from inputs that had suffered tax under the Act, the Schedule so stated.
Yet again, the fact that before its amendment, Entry 24 had used the words
'if it had met tax under the Act' and these words were omitted after the
amendment shows that the construction that we have placed upon Entry 24
-8 is correct.
H
22 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A In this view of the matter, the civif appeals are allowed. The judgments
and orders under challenge are set aside. The orders of assessment made on
the basis of the interpretation placed by the ·state on Entry 24-B are set aside.

Having regard to the relief so granted, the State shall refund to the
appellants the sums deposited by them as a condition of stay. This shall be
B done within twelve weeks.

The respondents shall pay to the appellants the costs of the appeals.

B.S. Appeals allowed.