Holding

Petroleum products include furnace oil and, since the entries only exclude specific items, furnace oil is liable to entry tax.

Summary

The appellant, Indian Aluminium Company Ltd., challenged the levy of entry tax on furnace oil brought into Karnataka, arguing that Entry No. 11 (and its amended counterpart Entry No. 67) of the Karnataka Tax on Entry of Goods Act, 1979, did not cover furnace oil. A Single Judge had held in its favour, but the State appealed. While the appeal was pending, the Act was amended in 1992, introducing a new Schedule with Entry No. 67 that listed petroleum products and excluded only specific items. The Division Bench held that both the original and amended entries, by using the phrase “and others,” intended to include all petroleum products not expressly excluded, thereby bringing furnace oil within the tax net. The Court rejected the contention that “and others” qualified only “tar” and emphasized that the specific exclusions (aviation fuel, LPG, kerosene, naphtha) demonstrated legislative intent to tax other petroleum products. Consequently, the appeals were dismissed and the entry tax on furnace oil was upheld.

Issues considered

Whether Entry No. 11 of the original Schedule and Entry No. 67 of the amended Schedule of the Karnataka Tax on Entry of Goods Act, 1979, include furnace oil within the definition of petroleum products for entry tax purposes.
Whether the words “and others” in the entries are exhaustive or allow inclusion of items not specifically listed such as furnace oil.
Whether the 1994 notification specifying a rate for furnace oil can be used to resolve any ambiguity in the statutory entries.
Whether the 1992 amendment to the Act altered the taxability of furnace oil.

Legislation cited

Karnataka Tax on Entry of Goods Act, 1979s. Section 3, s. Section 3(1)

Subjects

entry taxfurnace oilpetroleum productsstatutory interpretationKarnataka Tax on Entry of Goods Actamendment 1992exclusion clauseand otherslegislative intent

Judgment

INDIAN ALUMINIUM COMPANY LTD. A
11.

ASST. COMMISSIONER OF COMMERCIAL
TAXES (APPEALS) & ANR.

JANUARY 17, 200 I
B
[B.N. KIRPAL AND RUMA PAL, JJ.]

Karna/aka Tax on Entry of Goods Act, 1979:

Entry I I First Schedule (as it stood prior to 1992)-Entry 67 First C
Schedule (as amended in 1992)-Petroleum products-Furnace oil-Entry
tax-levy of-Assessee sought to be taxed on the entry of furnace oil which
was brought into the. State-Single Judge held that Entry tax was not
leviable on furnace oil-During the pendency of appeal; Amending Act of
1992 came into force which included furnace oil in Entry 67 in the First D
Schedule-Division Bench held that Entries 11 and 67 contemplated the
inclusion of furnace oil and, therefore, entry tax could be levied thereon-
Correctness of-Held: Petroleum products mean any type of petroleum
product-Entry tax is leviab/e on all petroleum products unless specifically
excluded-Furnace oil, being a petroleum product, and not specifically
excluded, entry tax is /eviable thereon. E
Words and Phrases:

"And others "-Meaning of-In the context of Entry /I of the Karnataka
Tax on Entry of Goods Act, 1979.
F
The appellant was sought to be taxed on the entry of furnace oil, which
was brought into the State by the appellant. The appellant, therefore, filed
a writ petition before the High Court contending that Entry No. 11 in the

- First Schedule to the Karnataka Tax on Entry of Goods Act, 1979 did not
permit levy of entry tax on furnace oil. A Single Judge of the High Court
allowed the writ petition. G

During the pendency of the appeal before the Division Bench the Act
was amended and Entry No. 67, corresponding to the earlier Entry No. 11,
was included in the First Schedule to the Act. The Division Bench allowed
the appeal on the ground that the original Entry No. 11 and the corresponding H
407
408 SUPREME COURT REPORTS [200 I] I S.C.R.

A Entry No. 67 of the First Schedule after amendment contemplated the inclusion·
of furnace oil in the said Entry and, therefore, tax could be levied thereon.
Hence this appeal.

On behalf of the appellant it was contended that Entries Nos. 11 and
B 67 did not mention furnace oil; and that the words "and others" occurring
in the said Entries only qualify the word "tar" which precede the said words
and, therefore, furnace oil could not be brought under the category "and
others".

Dismissing the appeal, the Court
c HELD : I. Both Entries Nos. 11 and 67 in the First Schedule to the
Karnataka Tax on Entry of Goods Act, 1979 mention "petroleum products:
Whereas in Entry No. 11 the first words are "All petroleum products", the
word "All" is missing in the new Entry No. 67. This, however, will not make
any material difference because petroleum products would clearly mean any
D type of petroleum product. The use of the words "and others" would, refer
to petroleum products other than those which are specifically mentioned
therein. What is, however, important is that the said entries specifically
exclude aviation fuel, liquid petroleum gas, kerosene and naphtha for use in
the manufacture of fertilizers. If the contention of the appel!ant is correct
E that the words "and others" would not enable the inclusion of furnace oil in
the said entries, then on the same parity of reasoning aviation fuel, liquid
petroleum gas, kerosene and naphtha would also have to be regarded as not
being included in the said entries and if this were so there was no need for
their specific exclusion. The very fact that there is an exclusion clause,
means that but for the said exclusion, aviation fuel, LPG, etc. would be
F included in the said entries and as they are not specifically mentioned they
would be covered by reason of the words "and others".(411-G-H; 412-A-BI

2. Entries Nos. 11 and 67 further show that the legislature never
intended to exclude furnace oil from the levy of entry tax. Had the intention
G of the legislature been to exclude furnace oil, which admittedly is a petroleum
product, then such an exclusion would have been indicated in the said entry
itse!r har been done in the case of aviation fuel, LPG, kerosene and naphtha
for use in the manufacture of fertilizers. The aforesaid entries are clear and
unambiguous and clearly indicate the taxability of any type of petroleum
product except those, which are specifically excluded by the said entries.
H 1412-C-DI
INDIAN ALUMI. CO. LTD. ''·ASST. COMM. OF COMR. TAXES [K!RPAL, l] 409

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1896- A
1899 of 1997 Etc. Etc.

From the Judgment and Order dated 12.1.96 of the Karnataka High Court
in W.A. No. 1565-1568of1992.

With B
Civil Appeal Nos. 1900-1903 of 1997.

With

C.A. No. 3697 of2000. c
With

C.A. No. 3696 of2000.

Gopal Subramanium, Joseph Vellapally, K. P. Kumar, K. T. Ananthararnan, D
Dhruv Agarwal, R.V. Prasad, Praveen Kumar, Udai Singh, Sanjay R. Hegde and
Satya Mitra, for the appearing parties.

The Judgment of the Court was delivered by

KIRPAL, J. The common question which arises for consideration in E
these cases relates to the interpretation of an entry. in the Karnataka Tax on
Entry of Goods Act, 1979 (for short "the Act") in so far it relates to furnace
oil.

In the three sets of cases, there are different periods of assessment
which are involved. In the case of Indian Aluminium Company Ltd. (Civil F
Appeal Nos. 1896-1899/1997 and 1900-1903/1997), the two periods in question
are 1982-85 and 1986-1989. In the case ofM/s. Vikrant Tyres Limited (Civil
Appeal No. 3697/2000), the period involved is 1992-93. In case ofM/s. Graphite
India Limited (Civil Appeal No. 3696/2000), we are concerned with the period
post-1998. G

Under Section 3 of the aforesaid Act, tax on entry of goods specified
in the First Schedule into a local area for consumption, use or sale therein can
be levied at the rates specified by the State Government by notification. It is
common ground that prior to amendment of the Act in 1992, there was one
Schedule which specified the various items on which entry tax could be H
~
I

410 SUPREME COURT REPORTS [2001] l S.C.R.

A levied. Entry No. 11 of the said Schedule was as follows:
"All petroleum products, that is to say, petrol, diesel, crude oil,
lubricating oil, transformer oil, brake clutch fluid, bitumin (asphalt) tar
and others but excluding LP kerosene and naphtha for use in the
manufacture of fertilizers."
B
When tax was sought to be levied on Mis. Indian Aluminium Company
Ltd. on entry of furnace oil, a writ petition was filed in the Karnataka High
Court in which it was, inter a/ia, contended that the aforesaid entry did not
permit levy of tax on furnace oil which was brought into Karnataka by the
said assessee. The State of Karnataka took the stand before the Single Judge
C that furnace oil was lubricating oil and, therefore, covered by Entry No. 11.

By order dated 28th January, 1992, the learned Single Judge came to the
conclusion that furnace oil was not lubricating oil and, therefore, no tax could
be levied on the said furnace oil which was brought into Karnataka.

D An appeal was filed against the aforesaid decision before the Division
Bench but during the pendency of the same by an Amendment Act of 1992,
the Act was amended. Instead of one Schedule, the Amending Act provided
for two Schedules. The First Schedule contained I02 items on which entry tax
could be levied under Section 3(1 ). Item No. I03 in the First Schedule was a
E residuary item which enabled the imposition of tax on "goods other than
those specified in any of the entries in this Schedule, but excluding those
specified in the Second Schedule." The Second Schedule which was inserted
by virtue of the said Amending Act contained a list of items on which tax
was not leviable. In the First Schedule, Entry No. 67, corresponding to the
earlier Entry No. 11, reads as follows :
F "Petroleum products; that is to say; petrol, diesel, crude oil,
lubricating oil, transformer oil, brake or clutch fluid, bitumen (asphalt),
Tar and others, but excluding aviation fuel, liquid petroleum gas (LPG),
kerosene and naphtha for use in the manufacture of fertilizers."

On 30th March, 1994, in exercise of the powers conferred by sub-
G
section (I) of Section 3, the Government of Karnataka by a notification
specified different rates of tax in respect of entry of goods into Karnataka.
Items 4 and 5, which are relevant in the present cases, which were inserted
by reason of the said Notification were as follows :

H "4. Petroleum products, that is to say Petrol, Diesel, Crude Oil,
INDIAN ALUM!. CO. LTD. ,. ASST. COMM. OF COMR. TAXES [KIRPAL, J.] 411

Lubricating Oil, Transformer Oil, Brake or Clutch fluid, Bitumen A
(asphalt), Tar and others but excluding Liquid Petroleum Gas
(LPG), Kerosene and Naphtha for use in the manufacture of
fertilisers. ... 2 per cent
5. Furnace oil. ... 2 per cent"
B
On 28th June, 1996, the Division Bench of the Karnataka High Gourt
allowed the appeal of the State and set aside the decision of the Single Judge.
The Division Bench came to the conclusion that the aforesaid original Entry
No. 11 and the corresponding Entry No. 67 of the First Schedule after
amendment in 1992 contemplated the inclusion of furnace oil in the said Entry
and, therefore, tax could be levied thereon. In these appeals, the challenge is C
to the said decision.

Learned counsel for the appellants have contended that use of the
words "that is to say" both in original Entry No. 11 and in the new Entry No.
67 clearly indicated that the items mentioned therein were exhaustive. They
further submit that neither of these entries mentioned furnace oil. It is contended D
by them that the words "and others" occurring in the said entries only qualify
the word "tar" which precedes the said words and, therefore, furnace oil could
not be brought under the category of "and others". Reliance is also placed
on the Notification dated 30th March, 1994 whereby in the Table providing
for the rates of tax a specified entry of furnace oil was inserted. It was E
contended that in the case of ambiguity it is possible for the Court to look
at the subsequent legislation in order to find out the legislative intent.

There can be no doubt that these entries, namely, original Entry No. 11
and the new Entry No. 67 were exhaustive. Learned counsel for the appellants
are, therefore, right in contending as such. We, however, do not find any F
ambiguity in interpreting the said entries and, therefore, for this purpose it is
not necessary for the Court to be influenced by the Notification of 30th
March, 1994, the issuance of which can be easily explained.

Both these entries (Nos. 11 and 67) mention "petroleum products" : G
Whereas in Entry No. 11 the first words are "All petroleum products", the
word "All" is missing in the new Entry No. 67. This, however, will not make
any material difference because petroleum products would clearly mean any
type of petroleum product. The use of the words "and others" would, in our
opinion, refers to petroleum products other than those which are specifically
mentioned therein. What is, however, important is that the said entries H
~

~

412 SUPREME COURT REPORTS [200 I) I S.C.R.

A specifically exclude aviation fuel, liquid petroleum gas, kerosene and Naphtha
for use in the manufacture of fertilizers. If the contention of the learned ~
counsel for the appellants is correct that the words "and others" would not
enable the inclusion of furnace oil .in the said entries, then on the same parity
of reasoning aviation fuel, liquid petroleum gas, kerosene and naphtha would
also have to be regarded as not being included in the said entries and if this
B is so there was no need for their specific exclusion. The very fact that there
is an exclusion clause, means that but for the said exclusion, aviation fuel,
LPG, etc., would be included in the said entries and as they are not specifically
mentioned they would be covered by reason of the words "and others."
\=

The said entries further show that the legislature never intended to
c exclude furnace oil from the levy of entry tax. Had the intention of the
legislature been to exclude furnace oil, which admittedly is a petroleum product,
then such an exclusion would have been indicated in the said entry itself as
has been done in the case of aviation fuel, LPG, kerosene and naphtha for
use in the manufacture of fertilizers. The aforesaid entries are clear and
D unambiguous and clearly indicate the taxability of any type of petroleum
product except those which are specifically excluded by the said entries.

Coming to the Notification of 30th March, 1994, it is quite obvious that
'"
as on that day the judgment of the Single Judge in Indian Aluminium Co.'s
case held the field and as a result thereof the State was unable to impose
•
E entry tax on the import of furnace oil into the State. The only way by which
this could have been done, pending the outcome of the letters patent appeal,
was to make a specific provision which it did by the said Notification of 30th
March, 1994. The entries being clear, the subsequent Notification of 30th
March, 1994, cannot be invoked for the purpose of creating ambiguity where
F none exists.

For the aforesaid reasons, we are of the opinion that there is no merit
in these appeals. The same are, accordingly, dismissed.

V.S.S. Appeals dismissed. •