Holding

Ornaments and gold articles are not "bullion or specie" and are taxable at the general rate; the classification of GI pipes under "water supply and sanitary fittings" requires factual determination and is remanded.

Summary

The Supreme Court examined whether ornaments and other gold articles purchased by G.S. Pai & Co. for melting qualified as "bullion and specie" under Entry 56 of the Kerala General Sales Tax Act, 1963, and whether the GI pipes sold by the company fell within "water supply and sanitary fittings" under Entry 26A. The Court applied the rule that statutory terms in sales‑tax entries must be given their ordinary, popular‑sense meaning rather than a technical definition. It held that "bullion" means raw gold or silver in mass, such as ingots or bars, and "specie" means metallic coinage, so ornaments and gold articles are neither and are taxable at the general 3% rate. Regarding the GI pipes, the Court noted that "sanitary fittings" refers to pipes used in lavatories, urinals or bathrooms, and that the phrase "water supply and sanitary fittings" must be read together, excluding heavy underground mains. Because the purpose of the pipes was not established, the matter was remanded to the Appellate Assistant Commissioner to determine the correct classification. The appeal was allowed, setting aside the lower courts' orders and directing a re‑examination of the pipe issue.

Issues considered

Whether ornaments and other articles of gold purchased for melting fall within the description of "bullion and specie" under Entry 56 of the Kerala General Sales Tax Act, 1963.
Whether GI pipes sold by the assessee fall within the description of "water supply and sanitary fittings" under Entry 26A of the same Act.

Legislation cited

Kerala General Sales Tax Act, 1963s. 5(1)(ii)

Subjects

sales taxstatutory interpretationbullionspeciesanitary fittingsKerala General Sales Tax Acttax rate classificationremand

Judgment

938

A DEPUTY COMMISSIONER OF SALES TAX (LAW)
BOARD OF REVENUE
• v.
G. S. PAI & CO.

B October 15, 1979
(P. N. BHAGWATI, V. D. TULZAPURKAR & R. S. PATHAK, JJ.]

Kera/a General Sales Tax Act 1963, First Schedule Entries 56 and 26A-
Scope of-Ornaments and articles of gold whether 'bullion and specie'-G.L

C
pipes whether 'water supply and sanitary fittings•.
Words and phrases-'Bullion', 'specie' anti 'sanitary fittings' meaning of---
,
Kerala General Sales Tax Act 1963, First Schedule Entries 56 and 26A.
lnterpreratton of Statutes-Erltries in Sales Tax Legislation-Interpretation·
of-Words used by legislature to be given their popular sense meaning.
Oil the questions ( 1) Wheth~ the ornaments and other articles of gold
purchased by the SBsessee fell within the description of "Bullion and specie"
D given in Entry 56 in thp Frrst S<:hedule of the Kera!" General Sales Tax Act
1956 and (2) the taxability of the turn-over of sales of G.I. Pipes made by
the assessee.
HELD : 1. One cardinal rule of interpretation while inllerpretilig entries in·
Sal\18 Tax legislation is that the words used in the entries must be coostrued·
not in any technical senae nor from the scientific point of view but as under-
E stood in common parlance. The words used by the legislature must be given,
their popul"" sense meaning, "that S(On>e which people conversant with the
subject-matter with which ,the statute is dealing would attribute to it."
[9~ H, 941A]

2. "Buijion" in its popular sense cannot includo ornaments or other articles
of gold. "Bullion" according to its plain ordinary meaning means gold or-
silver in the -mass. It connotes gold Or silver regarded as raw materiBl and
F it maiy be either in the form of raw gold: or silver or ingots or bars of gold'
or silver. [941 Bl
3. Ornament9' and oth'ir articles of gold cannot be regarded as ''bullion',.
because, even if old and antiquated, they are not raw or unwrought gold or
gold in the mass, but they represent manufactured or finished products of·
gold. Nor do they come within the meaning of the ·expression "specie,,. The
G word "specie" means coin, as distinguished from p{lper money". [941 D]
4. The ornaments and other articles of gold! purchased by the assessee do,
not fall within Entry 56 and tltey are, liable to be taxed not at the lesser rate
of 1 per cent applicable to "bullion and speicie" but at the general rate of
3 per cent under S. SA read with S. 5(i) (ii) of the Act. [941 G, 943 El
S. In State •Of Uttar Pradesh v. I~dian Hume Pipe Ltd., 39 STC 355 it has
H lMlet1 held by this Court that 'sanitary fittings' according to the popular sense
of the term means such pipes or materials as are used in lavatories urinals.
or beth-rooms of private houses or public buildings. [942 CJ
c. s. T. v. G. s. PAI & co. (Bhagwati, .J) 939

6. The G.I. :Pipes sold by the assessee would fall within the description J11.
of 'sanitary fittings' only if it can b'e shown and the burden of so doing would
be on the Revenue, tb~t they 'vere meant for use in lavatories, urinals or
bathMroow. Th(~ attention of the assessee and the tax authoriti'es was not
• drawn to this aspect of the question and no material was brought on record
which would tluow light on the question as to what was the use for which
the G.I. Pipes \{ere me2.nt. ·-If the G.I. Pipes were heavy and intended to
be faid underground for carrying supply of water from one place to another a
they would obvi,iusly not be 'sanitary fittings'. [942 C-E]

7. The tategc1ry of goods in Entry 26A is not described as 'water Supply
pipes, but as 'water supply and sanitary fittings'. The words 'water supply ...
fittings~ do not occur ini isolation but they are in juxtaposition of the \Vords
·sanitary :fittings'. The.· entire express.ion 'water supply and sanitary fittings'
is one single ·expression and the words 'water supply ... fittings' must receive C
colour from the immediately follo\ving words 'sanitary fittings'. The expres-
sion· 'water supply . .... fittings' in the context in which it occurs means- such
pipes or materia:.s as are meant for use for supply of water to or in lavora-
tories, urinals or bath-room~ of private houses of public buildings and they
do not include heavy pipes which are laid underground as mains for carrying
water supply from one area or place to another. [942 G, 943 A-Bl
8. f\s far a• G.I. Pipes sold by the assessee are concerned the case re-
manded to the Appellate Assistant Commissioner for the purpose of deciding
on. tM basis of the existing material aS also such further material as may be
adduced, whether G.I. Pipes sold by the assessee fall within the de9Cription
nwater supply a::id sanitary fittings" so as to be exigible to sales tax at ilie
higber rate of 7 per cent under Entry 26A. [943 F]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2422 of &.
1978.
Appeal by Special Leave from the Judgment and Order dated
13-2-1978 of 1he Kerala High Court in TRC No. 63/76.
M. M. Abdul Khader, V. J. Francis and M. A. Firoz for the
Appellant. -,.
The Judgment of the Court was delivered by
. BHAGWATI, J. The questions of law which arise for determina-
tion in this appeal lie in a very narrow compass and do not present
~ny difficulty in answering them. They are the usual type of ques-
tion~ that arise under the Sales Tax legislation, namely, whether a G'
t particular commodity sold or purchased by the assessee falls within
one entry or another. The assessee always c~ntends that it falls within
an entry which attracts lesser rate of tax while the Revenue invariably
seeks to bring it within the entry attracting a larger rate of tax.
Two ques~ions arise here for consideration. One question is ff'
whether certat~ orna_ments and _other articles of gold purchased by
the assessee with a view to melting them and making new ornaments
840 SUPREME COURT REPORTS [1980) 1 s.c.11..

or o!her articles out of the melted gold fall within Entry 56 in the
First Schedule of the Kerala General Sales Tax Act, 1963 (herein-
after referred to as "the Act") which reads "Bullion and Specie". If
the ornaments and other articles of gold purchased by the assessee
fall within this Entry, the tum-over of purchases of these goods would
be liable to be taxed at the rate of 1 per cent, while it would have
B to suffer tax at the rate of 3 per cent if these goods do not fall within
the Entry and .are taxable under section SA read with sec. 5 (1) (ii)
of the Act. The other question relates to taxation of the turnover
of sales of G.I. Pipes effected' by the assessee and it raises the point
whether G.I. Pipes sold. by the assessee fall within Entry 26A in the
First Schedule to the Act which reads "Water Supply and Sanitary
Fittings". If they do not fall within this Entry, the tum-over of their
sales would be liable to be taxed at the rate of 3 per cent under
sertion 5 ( 1)(ii) of the Act, but if they do, then the rate of tax
would be 7 per cent. The Sales Tax Officer, and in appeal the
Appellate Assistant Commissioner decided both the questions against
the assessee and taxed the turn-over of purchases of ornaments and
other articles of ~old at the rate of 3 per cent and . the turn-over
of sales of G.I. Pipes at the rate of 7 per cent. The Tribunal, on
further appeal by the assessee, disagreed with the view taken by .the
tax authorities and holding that the ornaments and other articles of
gold purchased by the assessee were "Bullion and specie" within the
meaning of Entry 56 and G.I. Pipes sold by the assessee were not "
covered by the expression "water supply and sanitary fittings" in
Entry 26A, taxed the assessee at the lesser rates as claimed by him.
The Revenue thereupon took the matter by way of revision to the
High Court, but the High Court also took the same view and affirmed
the judgment of the. Tribunal. This decision of the High Court is
assailed in the present appeal preferred by the Revenue after Obtaining
special leave from this Court.

We will first consider the question whether the ornaments and
other articles of gold purchased by the assessee fall within the des-
cription of "Bullion and specie" given in Entry 56. There are . two
expressions in this Entry which require consideration; one is "bullion"
and the other is "specie". Now there is one cardinal rule of inter-
pretation which has alwfys to be borne in mind while interpreting
entries in Sales Tax legislation and it is that the words used in the
entries must be construed not in any technical sense nor from the
scientific point of view but as understood in common parlance. We
must give the words nsed by the legislature their popular-sense mean-
ing "that sense .which people conversant with the subject-matter with
C. :;. T. v. G. S. PAI & CO. (Blzagwati, .J) 941

which the statute is dealing would attribute to it". The word A.
"bullion" must, therefore, be interpreted according to ordinary
parlance and mm t be given a meaning wbich people conversant with
this commodity would ascribe to it. Now it is obvious that "bullion"
in its popular sense cannot include ornaments or other articles of
gold. "Bullion'" according to its plain ordinary meaning means gold
or silver in the mass. It connotes gold or silver regarded as raw B
material and it may be either in the form of raw gold or silver or
ingots or bars of ,gold or silver. The Shorter Oxford Dictionary gives
the meaning of "bullion" as "gold or silver in the lump; also applied
to coined or manufactured gold or silver considered as raw material.''
.. So also in Jowitt's Dictionary of English Law and Wharton's Law
Lexicon we find that the following meaning is given for the word
·'bullion", "uncoined gold and silver in the mass. These metals are
called so, either when melted from the native ore and not perfectly
• •
refined, or where they are perfectly refined, but melted down into
bars or ingots, or into any unwrought body, of any degree of fine-
ness". It would, therefore, be seen that ornaments and other articles
of gold cannot be regarded as "bullion" because, even if old and
antiquated, they are not raw or umvrought gold or gold in the mass,
but they represem manufactured or finished products of gold. Nor
do they come within the meaning of the expression "specie". The
word ·"specie" has a recognised meaning and according to Webster's
Mew World Dictionary, it means "coin, as distinguished from paper E·.
money". The Law Dictionaries also give the same meaning.
Wharton's Law u'xicon and Jowitt's Dictionary of English Law state
the meaning of "~ pecie" as "metallic money" and in Black's Law
Dictionary, it is described as "coin of the precious metals, of a certain
weight and fineness, and bearing the stamp of the Government,
F·
denoting its value as currency" while "Words and Phrases-Penna•
nent Edition-Vol. 39A" also gives the same meaning. Therefore,
according to common parlance, the word "specie" means any metallic

.- coin which is used as currency and if that be the true meaning, it is·
· obvious that ornaments and other articles of gold cannot be described
as "specie''. It would thus seem clear that the ornaments. and other G.
articles of gold purchased by the assessee do not fall within Entry 56
and they are, accordingly, liable to be taxed not at the lesser rate of
• I l per cent applicable to "bullion and specie" but at the general rate
of. 3 per cent under section SA read with Section 5(1) (ii) of the
Aot.
That takes us to the second question in regard to taxability of the
liwrnover of sales O'f G.I. Pipes made by the assessee. The Revenue
942 SUPREME COURT REPORTS [1980] 1 S.C.R.

contended that G.I. Pipes fall within the description "water supply
and sanitary fittings" in Entry 26A so as to be exigible to tax at the )..
higher rate of 7 per cent while the assessee oootended that they are •
not covered by this expression and are, therefore, taxable only i1t the
lesser rate of 3% under. sec .. 5(1) (ii) of the Act. The determination
of this question turns on the true_interpretation of the words "water
'B ·supply and sanitary fittings". So far as t]\e expression "sanitary
fittings" is concerned, it has received judicial interpretation by this
Court in State of Uttar Pradesh v. Indian Hume Pipe Ltd.(') where
it has been laid down that "sanitary fittings" according to the popular
sense of the tenn mean such pipes or materials as are used in lava-
tories, urinals or bath-rooms of private houses of public buildings.
The G .I. Pipes sold by the assessee would, therellore, fall within the
description of "sanitary fittings" only if it can be shown and .the
burden of so doing would be on the Revenue, that they were meant
for usQ in lavatories, urinals or bath-rooms. It does not appear that
the attention of the assessee and the tax authorities was drawn to
this aspect of the question and hence no material was brought on
record which would throw light on the question as ·to what was the
m;e for which· the G.I. Pipes were meant. If the G.I. Pipes were
heavy and intended to . be laid underground for carrying supply of
water from one place to another, they would obviously not be "sani-
tary fittings". This is, however, a question which has not beea COllSi-
;i; dered by the Revenue authorities and the case would, therefore, have
to be remanded to the Appellate Assistant Commissioner for the
pnrpose of determining whether having regard to the meaning; which
this Court has placed on the expression "sani~ary fittings", the GJ.
Pipes sold by the assessee fall whhin that description.

But the Revenue contended that even if the G.I. Pipes are not
"sanitary fittings" within the meanin·g of that expression, they would
still full Within the description "water supply ...... fittings". Now, it
must be remembered that the category of goods in Entry 26A is not
descn'bed as "water supply pipes" but as "water supply and sanitary
fittings". The use of tl1e word "fittings" suggests that the expression
is intended to refer to articles or things whlch are fitted or fixed to
the floor or walls of a building and they may in a given case include
even articles or materials fitted or fixed outside, provided they can
be considered as attached or auxiliary to the building or part of, .it,
:n such as, for example, a pipe carrying faecal matter from the commode
to the sceptic tank, but they cannot include pipes laid underground
(I~ tJ li\.T.C. 355.
c. s, T, v. G, s. PAI & CO, (Bhagwati, .J) 94 3

ffor carying water supply, Moreover, the words "water supply .... A
fittings" do not occur iu isolation, but they are used in juxtaposition
of the words "sanitary fittings". The entire, expression "water supply
,,and sanitary fittings" is one single expression and the words "water
:supply. , .... fittings" mnst receive colour from the Immediately fol-
lowi"ng '~ords "sanitary fittings". We aN, therefore, of the view that
B
the expression "water supply. , . , . fittings" in the context in which
,it occurs means such pipes or materials as are meant for use for
,~upply of water to or in lavatories, urinals or bath-rooms of private
houses or public buildings and they do not include heavy pipes which
are laid underground as mains for carrying water supply from one,,area
-0r plaee to another, Therefore, even for the purpose of determining c
,whether G.I. Pipes sold by the assess~e are "water supply ......... .
fittings", it would have to be found as to what is the purpose for
'Which they were meant to be used and since the question , has not
ibeen approached from this point of view, we think it desirable that
•' the case be seut back to the Appellate Assistant Coinmissioner for the
'purpose of determining whether, in the light of this meaning placed D
by us on the words "water supply ..... fittings", the G.I. Pipes sold
by the assessee could be said to be "water suply ...... fittings,''

We, therefore, allow the appeal, set aside the orders made by the
High Court, the Tribunal and the Appellate Assistant Commissioner
and bold that so far as the ornaments and other articles of gold E
,purchased by the assessee are concerned, they were liable to be
'taxed at' the general rate of 3 per cent under section SA read with
section 5(1) (ii) of the Act and so far as G.I. Pipes sold by the
asiessee are concerned, we remand the case to the Appellate Assis-
-tant Commissioner for the purpose of deciding on the basi~ of the
&i8ting material as also such further material as may be adduced, F
w'llether G.I. Pipes sold by the assessee fell within the description
"watec snpply and sanitary fittings" so as to .be exigible to sales tax
:at !'he higher rate of 7 per cent under Entry 26A .
..- There will be no order as to costs of the appeal.
t G

:N.V.K. Appeal allowed.
•