Holding

"Watery coconut" is an oil seed covered by Entry 5(viii) and is liable to entry tax.

Summary

The Commissioner of Sales Tax, Madhya Pradesh, assessed entry tax on "watery coconut" under Entry 5(viii) of the Schedule to the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976. Popular Trading Co., the assessee, contended that watery coconut is distinct from copra and therefore not liable to tax. The High Court held that watery coconut fell outside the entry and set aside the tax. On appeal, the Supreme Court examined the meaning of the phrase "that is to say" in the entry and the botanical definition of oil seeds, concluding that watery coconut, being an oil‑seed capable of yielding oil, is covered by the entry. Consequently, the Court allowed the appeal, restored the Tribunal's order, and held that entry tax is payable on watery coconut.

Issues considered

Whether "watery coconut" falls within the definition of "coconut (i.e., copra)" under Entry 5(viii) of the Schedule to the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 and is therefore liable to entry tax.

Legislation cited

Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976

Subjects

entry taxoil seedcoconutwatery coconuttaxabilityinterpretation of "that is to say"sales taxMadhya Pradesh

Judgment

COMMISSIONER OF SALES TAX, M.P. A
v.
POPULAR TRADING COMPANY, UJJAIN

APRIL 5, 2000
'[S. RAJENDRA BABU AND S.N. PHUKAN, JJ.]
B

M.P. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976:
Entry 5(viii) Schedule.

Entry Tax-AYs 1978-79 and 1979-80-"Watery coconut"-Taxahility
of-Held: Expression "Oil seeds, that is to say-{viii) Coconut (i.e. Copra
c
excluding tender coconuts) (Cocos Nucifera)" covers "watery coconut" also-
Hence, "watery coconut" is liable to be taxed.

Wonir and Phrases:
D
"That is to say"-Meaning of-In the context of Entry 5(viii) of the
Schedule to the M.P. Sthaniya KshetraMe Mal Ke Pravesh Par Kar Adhiniyam,
1976.

"Watery coconut"-Meaning of
E
Respondent-assessee was a dealer in coconuts and was assessed to
entry tax for the Assessment Years 1978-79 and 1979-80 on "watery coco-
nut" under Entry 5(viii) of the Schedule to the M.P. Sthaniya Kshetra Me
Mal Ke Pravesh Par Kar Adhiniyam, 1976. The assessee claimed in the
appeal that 'copra' and 'coconut' were commercially two different com·
modities and 'watery coconut' was not liable to payment to entry tax. F
However, the appellate authority rejected this claim. The matter was car-
ried in second appeal to the Tribunal unsuccessfully.

The High Court, on appeal, held that ''watery coconut" fell outside
the scope of Entry 5(viii) and also stated that every seed or article which G
could yield oil was not an oil seed and adopted the test as to whether
'coeonut' is 'copra'. Inasmuch as 'watery coconut' could not be classified
as 'copra' High Court held ''watery coconut'' was not liable to be taxed
under the said entry. Hence this appeal.

Allowing the appeal, this Court H
983
984 SUPREME COURT REPORTS [2000] 2 S.C.R.
A HELD : 1. The expression 'that is to say' occurring in Entry 5(viii) ..
to the Schedule to the M.P. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar
Adhiniyam, 1976 is descriptive, enumerative and exhaustive and circum-
scribes to a great extent the scope of the said entry. The said entry pro-
vides for 'Oil seeds, that is to say coconut', which again says, 'i.e. Copra
and coconut including any other commodity'. An oil seed botanically
B
means a seed, which is a flowering plant's unit of reproduction or germ
capable of devefoping into another such plant. Seed, which can yield oil, is
an oil seed. If a seed by reason of application of a scientific method
produces, oil is not necessarily understood to be an 'oil seed' in a common
parlance. If a commodity possesses all the qualities of an oil seed it cannot
c be excluded from the ambit of the expression 'oil seed'. Oil is generally
extracted from dry coconuts, but in some parts of_!ndia it is extracted even
from copra recovered from fresh coconuts._Copr.~ - of 'waterr coconut'
before it dries up may not yield as much oil as dried copra. The oil, which
it yields, may also contain some watery substance, which has to be elimi-
D nated for the purpose of recovering pure coconut oil. At the same time, it
yields sufficient quantity of oil. Thus 'watery coconut' while yielding oil
merely because it yields some watery substance does not cease to be an 'oil
seed' and, therefore, it falls within the entry. [986-A-D]

State ofT.N. v. Pyarelal Malhotra, (1976) 37 STC 311 and Ganpat Lal
E Lakhotia v. State of Rajasthan, [1997] 10 SCC 455, relied on.

Sri Krishna Coconut Co. v. CTO, (1965) 16 STC 511 AP, referred to.

Sri Siddhi Vinayaka Coconut & Co. v. State of A.P., [1974] 4 SCC 835,
held inapplicable.
F
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 9825-9826
of 1996.

From the Judgment a!ld Ogler dated),J,U.95 of the Madhya Pradesh
High Court in M.C.C. Nos. 301 and 302 of 1986.
G
S.K. Agnihotri and Ms. Madhur Dadlani for the Appellant.

The Judgment of the Court was delivered by

RAJENDRA BABU, J. For the assessment periods 1978-79 and
H 1979-80 the Sales Tax Officer assessed the respondent under the Madhya
COMMR. OF SALES TAX v. POPULAR TRADING CO. [RAJENDRA BABU, J.] 985
Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976, that A
is, an Act to levy a tax on the entry of goods into a local area in Madhya
Pradesh for conswnption, use or sale therein [hereinafter referred to as 'the
Act']. The respondent is a dealer in coconuts. Apart from oil he was assessed
to entry tax on 'watery coconuts' under the Act. The assessee claimed in the
appeal that 'copra' and 'coconut' are commercially two different commodi-
ties and 'watery coconut' is not liable to payment to entry tax. However, the
B
appellate authority rejected this claim. The matter was carried in second
appeal to the Tribunal unsuccessfully. Thereafter, the respondent questioned
the correctness of the orders of the Tribunal and the other authorities before
the High Court. The High Court considered the Entry at item No. 5 which
reads as "Oilseeds, that is to say - (viii) Coconut (i.e.Copra excluding tender c
coconuts)(Cocos Nucifera)". The High Court took the view that 'tender
coconut' is not subject to tax and falls outside the scope of entry referred
to above and does not specifically contain 'watery coconut'; that the word
'copra' clarifies that 'watery coconut' is not shown to be a taxable item. The
High Court relied upon a decision of this Court in Sri Siddhi Vinayaka
D
Coconut & Co. & Ors. v. State of Andhra Pradesh & Ors., (1974] 4 SCC
835, to hold that 'watery coconut' and 'dry coconuts' are two distinct
commodities. The High Court also stated that every seed or article which can
yield oil is not an oil seed and adopted the test as to whether 'coconut' is
'copra'. Inasmuch as 'watery coconut' cannot be classified as 'copra', the
High Court took the view that it is not sufficient to show that 'watery E
coconut' is liable to be taxed but the Department was liable to show that
'watery coconut' was in reality 'copra' and, therefore, liable to tax. The
Tribunal was not justified in holding that 'watery coconut' was not exempt
from payment of entry tax in terms of the aforesaid entry.

The lea.med counsel for the appellant very strenuously contended that F
the High Court had overlooked the essence of the matter, namely, what is
brought to tax under Entry 5 is an 'oil seed' and 'coconut' of all descriptions
except those which are not covered therein. The learned counsel submitted
that 'watery coconut' undergoes a natural process of ripening to a coconut
and thereafter it ceases to be a 'tender coconut' and so includes both G
dehusked coconut or coconut without husk and while dehusked coconut is
known as 'copra', coconut with husk is known as 'watery coconut'. She,
therefore, submitted that 'watery coconut' falls within the scope of Entry 5
to attract tax.

The view taken by the High Court in this case has lost sight of the H
986 SUPREME COURT REPORTS [2000] 2 S.C.R.
A expression in the opening clause of the entry 'Oilseeds, that is to say'. The
phrase 'that is to say' has been the subject matter of interpretation by this
Court in State of Tamil Nadu v. Pyarelal Malhotra, (1976) 37 STC 311. The
expression 'that is to say' is descriptive, enumerative and exhaustive and
circumscribes to a great extent the scope of the entry. The entry provides for
'Oil seeds, that is to say coconut', which again says, 'i.e. Copra and coconut
B
including any other commodity.' An oil seed botanically means a seed which
is a flowering plants' unit of reproduction or germ capable of developing into
another such plant. Seed which can yield oil is an oil seed. If a seed by reason
of application of a scientific method produces oil is not necessarily understood
to be an 'oil seed' in a common parlance. If a commodity possesses all the
c
--
qualities of an oil seed it cannot be excluded from the ambit of the expression
v
'oil seed'. Oil is generally extracted from dry coconuts, but in some parts of
India it is extracted even from copra recovered from fresh coconuts. Copra of
watery coconut before it dries up may not yield as much oil as dried copra.
'I
The oil which it yields may also contain some watery substance which have
to be eliminated for the p-µrpose of recovering pure coconut oil. At the same
..
D
time, it yields sufficient quantity of oil. Thus 'watery coconut' while yielding -11
oil merely because it yields some watery substance does not cease to be an
'oil seed' and, therefore, it falls within the entry.

In this context, it is necessary for us to refer to the decision of this Court
E in Sri Siddhi Vinayaka Coconut & Co. & Ors. v. State of Andhra Pradesh &
Ors. (supra) on which strong reliance has been placed by the High Court. In
that case this Court was concerned with the entry as contained in the Andhra
Pradesh General Sales Tax Act. The entry therein merely contained 'coconuts'
in the Third Schedule and 'tender coconuts' in the Fourth Schedule which are
useful only for drying purposes which was exempt from tax. An Explanation
F
was added to the Third Schedule to state that the expression 'coconuts' would
mean fresh or dried coconuts, shelled or unshelled including copra, but
excluding tender coconuts. Again by _another amendment another Explanation
was added to state that the expression 'coconuts' in the Schedule would mean
dried coconuts, shelled or unshelled, including copra but excluding tender
,
G coconuts. Thus this Court was concerned in that case with two sets of entries
- one contained irr the Central Sales Tax Act. which is similar to the provisions
with which we are concerned in the present case, and the other as stated in
the Third and Fourth Schedule to the Andhra Pradesh General Sales Tax Act.
In that context, this Court had to consider whether a 'watery coconut' could
H be taxed within the permissible restrictions as also 'dried coconut' that
I,

COMMR. OF SALES TAX v. POPULAR TRADING CO. [RAJENDRA BABU, J.] 987
resulted from the drying of the same watery coconut. It was contended that A
-- under the State statute though 'watery coconut' and 'dried coconut' were
treated separately there is a provision for refund when 'watery coconut' had
suffered tax became 'dried coconut'. In that context that decision was
rendered and we are concerned with different kind of entry for tax.
.• ·!

This Court in Canpat Lal Lakhotia v. State ofRajasthan & Ors., [1997] B
10 SCC 455, quoted with approval what was stated in Sri Krishna Coconut
Co. v. CTO, (1965) 16 STC 511 (AP), wherein it was stated as follows :-

"In a tender coconut, the kernel is hardly formed or is only in the
initial stages of formation. In a dried coconut the kernel has formed
and fully developed and further the water inside the coconut has dried
c
up leading to the drying of the kernel also. But a fully grown coconut
with a well-developed kernel which contains water cannot be called
either a tender or a dried coconut. This is the well-known variety of
coconuts used for culinary purposes and on auspicious occasions and
as part of the offerings in temple. I do not think it is correct or D
reasonable to describe this class of coconuts as either dried or tender."

It was noticed therein that a 'watery coconut' in due course becomes
'dried coconut' or 'copra' and, therefore, it could not be stated that 'watery
coconuts' are outside the scope of the entry. If for purpose of the benefit
arising under Section 14 of the Central Sales Tax Act, which was the subject E
matter of consideration before this Court, it has taken the view that the 'wate1y

- coconuts' are not outside the scope of the said provision.

There is no reason to state that the 'watery coconuts' in the present cases
fall outside the scope of the A<;t. In the light of this analysis, we are of the
F
view that the High Court was not justified in holding that 'watery coconut'
is not taxable ~der the relevant entry of the Act. In the result, we set aside
the order made by the High Court and restore that of the Tribunal. However,
in the circumstances of the case, there shall be no orders as to costs.

The appeals are allowed accordingly. G
v.s.s. Appeals allowed.