Holding

Whole black and white pepper and pepper powder, as well as turmeric and turmeric powder, are the same goods under the West Bengal Sales Tax Act, 1954.

Summary

The appellant, K.C.D. Pvt. Ltd., bought whole black pepper and whole turmeric in West Bengal, ground them into powder, and sold the powder. It argued that under the West Bengal Sales Tax Act, 1954, the powdered forms are the same goods as the whole forms, already taxed at the first point of sale, and therefore not liable to tax again. The Revenue contended that pepper powder and turmeric powder are distinct commodities, attracting fresh tax, a view upheld by the West Bengal Taxation Tribunal. On appeal, the Supreme Court examined the language of Notifications No. 885‑F.T. (1955) and No. 1915‑F.T. (1963) issued under sections 25 and 4 of the Act, and applied the functional and commercial‑parlance tests. The Court held that whole black and white pepper and pepper powder constitute the same goods, and likewise turmeric and turmeric powder, rejecting the restrictive reading of “that is to say”. Consequently, the appeal was allowed and the Tribunal’s decision set aside.

Issues considered

Whether pepper powder and turmeric powder are the same goods as whole pepper and whole turmeric for purposes of the West Bengal Sales Tax Act, 1954.
Whether the expressions ‘whole, broken, ground or powdered’ in Notification No. 885‑F.T. denote a single commodity.
Whether the phrase ‘that is to say’ in the notifications limits the tax to the unprocessed form of the commodity.

Legislation cited

Bengal Finance (Sales Tax) Act, 1941
West Bengal Sales Tax Act, 1954s. 25, s. 4

Subjects

sales taxcommodity classificationfunctional testsame goods doctrineWest Bengal Sales Tax Actpepperturmericnotification interpretationsingle point tax

Judgment

KRISHAN CHANDER DUTIA (SPICE) PVT. LTD. A
l'.
COMMERCIAL TAX OFFICER AND ORS.

FEBRUARY 23, 1994

[B.P. JEENAN REDDY AND Il.L. HANSARIA, JJ.] B

West Bengal Sa/ex Tax Act, 195.f-Sectio:is 4, 25-Notificatio11s No.
885-F, T. dated 1.5.1955 and No.1915 F. T. dated 10.5.196J-Who/e black and
white pepper powde,--Wl!ole hmneric and tunneric powde1-SIJ/es Tax-l!'I-
ibility of-Held whole black and white pepper and pepper.powder are the same C
['•ads-Because of description of whole t1mneric and tunneiic powder i11 both
notifications in same manner as black and white pepper, whole hmneric and
tunneTic poYider n1ust also be treated as sanze goods.

Words and Phrases-'that is to say'-Occum·ng in clauses (2) and (3)
of Notificatio11 No. 885-F. T. dated 10.5. 1955 issued under s.25 of the West D
Bengal Sales Tax Act, 195.f-lnterpretatio11 of

By notification 11/o. 885-F.T. dated May 1,1955 issued under s.25 of
the West Rengal Sales Tax Act,1954, turmeric and pepper were brought
under the purview of the Act. By another notification No. 1915-F:T. dated E
May 10,1963 isued under s.4 of the Act, the rates of tax on these com-
modities were prescribed. Under the Act, the tax was a single point tax
leviable at the first point of sale. The revenue imposed tax on the sale of
pepper powder and turmeric powder. The appellant, who purchased
whole black pepper and whole turmeric and converted them into pepper
powder and turmeric powder for sale, contended that pepper and pepper
powder and similarly turmeric and turmeric powder, being one and the
same thing, were not exigible to tax since whole pepper and whole turmeric
had suffered tax when they were sord to him. The Revenue rejected the
claim holding that pepper and pepper powder and similarly turmeric and
turmeric powder were two different goods. The West Bengal Taxation G
... Tribunal upheld the view of the Revenue. Theappellantfiled the appeal by
special leave.

Allowing the appeal. this Court

HELD: 1.1 Whole black and white pepper and pepper powder are the H
123
124 SUPREME COURT REPORTS [1994) 2S.C.R.

A same goods, whether applying the functional test or the test of com·
mon/commerdal parlance. The analogy of paddy and rice or of wheat and
wheat powder is not apt. Nobody consumes paddy as it. Similarly, no one
eats whole wheat. They are consumed after milling them into rice or Dour,
as the case may be. But so far as the pep)i>fr is concerned, it is used equally
B in whole as well as powder form. Therefore, the entry in Notification No.
885·T.F. dated 1.5.1955 speaks of 'Black and white pepper ·whole, broken,
ground or powdered or of any other form or description whatsoever'.
Further, the reference of black and white pepper in Notification No. 1915,
'as specified in Notification No. 885' means black and white pepper,
whether whole, powdered, broken or in any other form. [128-B-D)
c
1.2 The position of turmeric and turmeric powder is not identical,
applying the functional test. But inasm~ch as turmeric is also described
in Notification No. 885 in the same man,1er as black and,white pepper and
also because Notification No. 1915 refo1 ·s to it with reference to the said
D earlier Notification, turmeric and t,urmeric powder must also be treated
as same, goods. [128-E)

Rajastlta11 Flour Mills Associatio11 v. State of Rajastha11, [1993) 3
SCALE 600, held inapplicable.

E Alladi Venkateshwar/11 v. State of A11dhra Pradesh, 41 S.T.C. 394;
Commissioner of Sales Tax, Lucknow v, D.S.Bist & Ors., [1980) 1 S.C.R.
593, Ganesh Trading Compa11y, Kamal v. State of Haryana, 32 S.T.C. 623
and State of Kamataka v. Raghuram Shetty, 47 S.T.C. 369, referred to.

F 2. In items (2) and (3) of Notification No. 885-F.T., the words 'that
is to say' seem to refer to the botanical e1,presslon followhog the said words,
and they cannot, by any stretch of ima1;ination, be taken to indicate that
broken, powdered or any other form of pepper are different goods from
pepper. [129-A)

G CIVIL APPELLATE JURISDICrION: Civil Appeal Nos. 1211-13
of 1992.

From the Judgment and Order elated 15.5.91 of the West Bengal
Taxation Tribunal, Calcutta, in Case No. R.N. 207(T), 608(T),609(T) of
H 1988.
K.C.D. PVT. LID. v. COMMR. TAX OFFICER [JEEVAN REDDY,J.] 125

Dr. Shankar Ghosh, Gopal Chakravarthi, K.P. Ghosh and Ms. Kum A
·~
Kum Sen for the Appellant.

Santosh Hegde, Dilip Singh and J .R. Das for M/s. Sinha and Das for
the Respondents.
The Judgment of the Court was delivered by
B
B.P. JEEVAN REDDY, J. In this appeal preferred against the judg-
ment of the West Bengal Taxation Tribunal, the question is whether sales
" of turmeric powder and pepper powder obtained from whole turmeric and
whole pepper are exigible ID sales tax under West Bengal Sales Tax Act,
1954 (1954 Act). The principal Act levying sales tax in the State of West
Bengal, of course, is the Bengal Finance (Sales Tax) Act, 1941. By a
c
Notification No. 885-F.T. dated May 1, 1955, issued under Section 25 of
the 1954 Act, the Governor of West Bengal specified and notified certain
commodities including turmeric and pepper, wih the result that the said
commodities ceased to be governed by the 1941 Act and came within the
purview of the 1954 Act. The Notification, in so far as it is relevant, reads D
" )
thus:
"
"No. 385-F.T. -Isl May, 1955. - Whereas the Govenor is of opinion
that it would be in the public interest that the commodities men-
tioned below, being commodities liable hitherto to taxali_on under E
the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act YI of 1941),
should be taxed under the West Bengal Sales Tax Act, 1954 (West
Bengal Act IV of 1954);

Now, therefore, in exercise of the power conferred by section
"'" 25 of the West Bengal Sales Tax Act, 1954 (West Bengal Act IV F
of 1954), the Governor is pleased hereby to specify such com-
modit.ies under that section.
·•
The commodities referred to above:

(1) (Omitted as unnecessary). G
(2) black and white pepper, known as go! mirch, that is to say, the
berry of the plant "piper Nigrum", whole, broken, ground or pow-
"' dered, or of any other form or description whatsoever;

(3) Turmeric, known locally as haridra or halud, that is to say, the H
126 SUPREME COURT REPORTS [1994] 2 S.C.R.

A product obtained from the plant "Curcuma Longa", whole, broken,
ground or powdered, or any other from or description whatsoever;

(4) (Omitted as unnecessary);

(5) (Omitted as unnecessary)."
B
By another Notification No.1915-F.T. dated May 10, 1963 issued
under Section 4 of the 1954 Act, the Governor of West Bengal notified the
rates of tax on several commodities including black and white pepper and
turmeric. In so far as it is relevant, it reads thus:

C "No.1915·F.T.-10th May, 1963.-In exercise of the power con-
ferred by section 4 of the West Bengal Sales Tax Act, 1954 (West
Bengal Act IV of 1954), the Governn1 is pleased hereby to fix in
respect of the notified commodities ·: ecifr·J in column 2 of the
table below, the rates specified in th·• corresponding entries in
D column 3 of the said table as I he rates ·1t which: tax under the said
Act shall be paid by a dealer on his tu mover.

Table
SI.No. Notified commodity Rate of tax

E 1, 2 (Omitted as unnecessary).
&3
4. Betel-nuts, Llack and white Pepper: Turme:ric,
Four per
Cloves and Cinnaamon or Cassia, as .pecified in
ccntum
11otificatio11 No.885- F. T., dated 1st Mai. 1955.
F S.No. (5) to (16) - (Omitted as unnece ;sary).

This will take effect from the 10th day of May, 1963."

(Emphasis supplied)
G '
It is the common case of the parties before us that under the 1954
Act, the ta.x is a single point tax leviable at the first point of sale.

The appellant says that he purchases whole black pepper and whole
turmuic within the State of West Bengal and converts them into pepper
H powder and turmeric powder for sale. His contention is that black pepper
KC.D. PVT. LID. v. COMMR. TAX OFHCER [JEEVAN REDDY, J.] 127

and pepper powder and similarly turmeric and turmeric powder are one A
and the same goods and inasmuch as whole black pepper and whole
turmeric suffered tax when it was sold by the selling dealer to the appellant,
the powders derived from them are not exigible to tax when sold by him.
For the same reason, he says, he need not register himself as a dealer under
the Act. The department, however, took the view that pepper and pepper B
powder and similarly, tur 1eric and turmeric powd~r are different goods
and, therefore, the peppei powder and turmeric powder when sold by the
appellant arc exigible to tax. The Tribunal has upheld the contention of
the Revenue.

Dr. Shanker Ghosh, learned counsel for the appellant relied upon C
the decisions of this court in Alladi Venkateshwarlu v. State of Andhm
Pradesh, 41 S.T.C. 394 and Commissioner of Sales Tax, Lucknow v. D.S.
Bisr & 01!., (1980] 1 S.C.R. 593 in support of his submission that pepper
and peppe1 powder and turmeric and turmeric powder are one and the
same goods. He submitted that pepper is sometimes used in its original D
form and sometimes in its powdered form. Similarly, turmeric is also used
~ sc,metimes in its original form and sometimes after converting it into
powder. According to learned counsel, pepper powder is but a form of
pepper and similarly turmeric powder is but only a form of turmeric. They
are not diferent goods. Counsel submitted that just as parched rice and E
puffed rice are different forms of rice (A//adi Venkateshwarlu), so is the
pepper powder a form of pepper and turmeric powder a form of turmeric.

The learned counsel for the State of West Bengal, on the other
hand, submitted that pepper and pepper powder and similarly turmeric
... and turmeric powder are two different goods just as wheat and wheat-flour F
are different goods. The learned counsel relied upon the recent decision
of this court in Rajasthan Flour Mills Association v. State of Rajastilan,
(1993] 3 SCALE 600 in support of his submission. He also relied. upon the
decisions of this court in Ganesh Trading Company, Kamal v, State of
Haryana, :>2 S.T.C. 623 and State of Kamataka v. Rag/Juram S/Jetty, 47 G
S.T.C. 369. In the latter case, learned counsel pointed out, it has been held
that when wheat is ground into flour, wheat is consumed in the manufac-
ture of wheat-flour and a different product emerges and similarly, when
wheat-flour is baked as a bread,thereemerges yet another different goods.
Learned counsel, therefore, submitted that on the same analogy when H
128 SUPREME COURT REPORTS [1994] 2 S.C.R.

A pepper and turmeric are ground iullo powder, they change their shape and
emerge as different goods.

We are of the opinion that so far as whole black and "''.:;te pepper
and pepper powder is concerned, they are the same goods, whether
applying the functional test or the: test of common parlance/commercial
B
parlance. The analogy of paddy arid rice or of wheat and wheat powder
is not apt. Nobody consumes paddy. as it is. Similarly, no one eats whole
wheat. They are consumed afier milling them into rice or flour, as the case
may be. But so far as the pepper i.s concerned, it is used equally in whole
as well as well powdered form. It is for this reason perhaps that the
c entry in Notification No.885-F.T. dated May 1, 1955 speaks of "Black and
white pepper-whole, broken, ground or powdered or of any other form or
description whatsoever'. It is equally significant that the Notification
No.1915-F.T. dated May 10, 1%3 refers to these commodities "as specified
in Notijicatio11 No.885-F.T. dated 1st May, 1955". Black and white pepper
D "as specified in Notification No.885" means black and white pepper,
whether whole, powdered, broken or in any other form.

So far as turmeric and turmleric powder is concerned, the position is
not identical, applying the functional test. But inasmuch as turmeric is also
E described in Notification No.885 in the same manner as black and white
pepper and also because Notification No.1915 refers to it with reference
to the said earlier Notification, we are inclined to say that turmeric and
turmeric powder must also be treated as same goods.

Sri Santosh,Hegde, learne:d counsel for the State of West Bengal
F submitted that the use of the words "that is to say" in items (2) and (3) in
Notification No. 885-F.T. serve to indicate that broken, ground or pow-
dered pepper is different from pepper. Support is sought to be derived
from the decision of this court i10 Rajastha11 Flout Mills Association where
the meaning of the said words was dealt with reference to Section 14(i) of
G the Central Sales Tax Act. It was held in the said decision that the said
words had the effect of limiting, the operation of Section 14 to the goods
specifically mentioned thereunder and not to their products. In other
words, it was held that when Section 14(i) (iii) mentioned wheat, it meant
wheat alone and not the products of wheat like flour, maida and suji. We
H do not see how the said decision assists the argument of the learned
K.C.D. PVT.LTD. v. COMMR. TAX OFFICER [JEEVAN REDDY, J.] 129

counsel. In items (2) and (3) of Notification No.885-F.T., the words "that A
is to say" seem to refer to the botanical expression following the said words.
Be that as it may, the said words cannot, by any stretch of imagination, be
taken to indicate that broken, powdered or any other form of pepper are
different goods from pepper.

The appeals are allowed lccordingly. The judgment of the West B
Bengal Taxation Tribunal is set ' side. There shall be no order as to costs.

R.P. Appeals allowed.