(Appeal by special leave from the judgment and order, dated September 26, 1975, of the Orissa High Court in SJ.C. Nos. 87 to 93 of 1974).

Wealth tax---

----Exemption---Meaning of "jewellery "---Effect of insertion of Explanation 1 to S.5(1)(viii) by Finance (No.2) Act, 1971---Jewellery included gold ornaments even prior to the addition of the Explanation---Indian Wealth' Tax Act, 1957, S.5(1)(viii).--[CWT v. Sonal K. Amin. (Smt.) (1981) 127 ITR 427 (MP) and CWT v. Aditya Vikram Birla (1978) 114 ITR 711 (Cal.) overruled and CWT v. Binapani Chakraborty (1978) 114 ITR 82 reversed].

The term "jewellery" is not confined in ordinary parlance to only those ornaments which have precious stones embedded in them: It covers all articles of value used for adornment. Explanation 1 to section 5(1)(viii) of the Wealth Tax Act, 1957, has been introduced by the Finance (No.2) Act, 1971, partly to clarify this position. The Explanation provides an extensive definition of "jewellery". It includes ornaments made of gold, silver, platinum or any other precious metal whether or not containing any precious or semi-precious stones. It covers such items which may or may, not be sewn into any wearing apparel. It also includes precious and semi-precious stones whether or not set in any furniture, utensils or other article, or worked or sewn into any wearing apparel. The Explanation may have extended the meaning of "jewellery" to cover, for example, precious stones by themselves or precious stones set in furniture or utensils. But in so far as it includes ornaments made of gold, silver, platinum of any other precious metal or alloy, it is merely clari ficatory in nature. Merely because ornaments made of gold and silver are now expressly included in Explanation 1, it is not possible to hold that they were earlier excluded from the meaning of the term "jewellery". Hence, jewellery, even before the coming into force of Explanation 1, would include gold ornaments.

CWT v. Rukmani Devi (1983) 142 ITR 41 (Delhi); CWT v. Jayantilal Amratlal (1976) 102 ITR (Guj.); CWT v. (His Highness Maharaja) Vibhuti Narain Singh (1979) 117 ITR 246 (All.); Nandkishore Girdharilal Modi v. CWT (1981) 132 ITR 868 (MP) and CWT v. Savitri Devi (Smt.) (1983) 140 ITR 525 (Delhi) approved.

CWT v. Sonal K. Amin (Sort.) (1981) 127 ITR 427 (MP) and CWT v. Aditya Vikram Birla (1978) 114 ITR 711 (Cal.) overruled.

CWT v. Binapani Chakraborty (1987) 114 ITR 82 revered.

CWT v. Arundhati Balkrishna (1970) 77 ITR 505 (SC) ref.

J. Ramamurthy and Ms. A. Subhashini for Appellant.

JUDGMENT

MRS. SUJATA V. MANOHAR, J.---These appeals by special leave arise from a common judgment of the High Court of Orissa (see (1978) 114 ITR -82) in seven reference applications before it under section 27(1) of the Wealth Tax Act, 1957. The High Court was required to consider the following question (at page 82):

"Whether the word "jewellery" in section 5(1)(viii) of the Wealth Tax Act, 1957, prior to the amendment of the section and the introduction of the Explanation by the Finance (No.2) Act of 1971, could take in gold ornaments without precious or semi-precious stones embedded on them?"

The High Court has answered the question thug (at page 85):

"The word 'jewellery', in section 5(1)(viii) of the Wealth Tax Act of 1957, prior to amendment of the provision and the introduction of the Explanation 1 by the Finance (No.2) Act of 1971, would not take in gold ornaments without precious or semi-precious stones embedded on them. "

The Commissioner of Wealth Tax has filed the present appeals from the above decision.

The relevant assessment years are 1965-66 to 1971-72. The relevant valuation dates are 31st March of each of the years in question. We are, therefore, required to consider the provisions of section 5(1)(viii) of the Wealth Tax Act, 1957, as in force during the relevant period. Section 5 of the Wealth Tax Act, 1957 deals with exemptions from wealth tax granted in respect of certain assets. Section 5(1)(viii), prior to its amendment by the Finance (No.2) Act of 1971, was as follows:

"5.--(1) Subject to the provisions of subsection (1-A), wealth tax shall not be

payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of assessee.

(viii) furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessee. "

Section 5(1)(viii) was interpreted in the context of the provisions of !ions 5(1)(xiii) and 5(1)(xv) by this Court in the case of CWT v. Arundhatikrishna (1970 ) 77 ITR 505. The Court said that jewellery intended for the ;oval use of the assessee would come within the scope of the exemption anted under section 5(1)(viii) being "other articles- intended for the Personal .....use of the assessee". As a consequence, the Finance (No.2) Act of , I amended the provisions of section 5(1)(viii) with retrospective effect from April 1, 1963 to read as follows:

"5. (-1)(viii) furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessee, but not including Jewellery." (Underlining ours).

By the same Finance (No.2) Act of 1971, Explanation 1 was also added section 5(l)(viii). The Explanation, however, was made effective only prospectively, with effect from April 1, 1972. Explanation 1 is as follows:

"Explanation 1.---For the purposes of this clause and clause (xiii), Jewellery' includes---

(a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel;

(b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel."

In the present appeals, we are concerned with the period during which retrospectively amended section 5(l)(viii) was in operation but without, explanation 1 (which came into effect from April 1, 1972). We have to consider at is excluded from the benefit of the exemption granted under section 5(1)(viii). Is it only those items of jewellery which are studded with precious or semi-precious stones or whether all ornaments and jewellery made 11 of precious metals (such as gold, silver or platinum or alloy with precious metals) that are excluded from the exemption, although they may not be studded with precious or semi-precious stones"

It has been urged before us by the assessee that it is on account of Explanation 1 to section 5(1)(viii) that the term "jewellery" would also include Laments made only of gold, silver, platinum or any other precious metal or containing such precious metal, even though no precious . stones are embedded in them. It is submitted that in the absence of such an Explanation during the relevant period, the term "jewellery" would cover only ornaments studded with jewels or precious stones. It would not cover in its ambit ornaments made only of gold, silver, platinum or any other precious metal or alloy.

To interpret the word "jewellery" as such without the benefit of Explanation 1, we must first consider how the term "jewellery" is ordinarily understood. In the New Shorter Oxford Dictionary, "jewellery" is defined as: "gems or ornaments made or sold by jewelers, especially precious stones in mountings; jewels collectively or as a form of adornment."

"Jewel" is defined as:

"An article of value used for (personal) adornment, especially one made of gold, silver, or precious stones ....a precious stone, a gem; especially one worn as an ornament. "

The terms "jewel" and "jewellery", therefore, refer to articles of value used for adornment, especially those made from gold, silver or precious stones. The terms are, therefore, wide enough to cover not merely precious stones or articles of adornment made with the use of precious stones, but also other articles of value made from gold, silver, platinum or precious metals. Ordinarily speaking, when a person talks about jewellery, he includes ornaments which are made of gold, silver or any other precious metal also irrespective of. whether these articles have precious stones embedded in them or not.

The difference which is sought to be made out between ornaments which contain precious stones, and ornaments of gold, silver and platinum which do not have precious stones embedded. in them, appears to be artificial. The term "jewellery" is not confined in ordinary parlance to only those ornaments which have precious stones embedded in them. It covers all articles of value used for adornment. A jewellery shop normally sells not just precious stones or articles made of precious stones; it certainly sells ornaments of gold and silver. It may be that in our local languages,. different kinds of bangles, necklaces and other ornaments carry different and specific names depending upon their design p' and craftsmanship. But these are all covered by the generic term jewellery".

Undoubtedly, the Explanation has been introduced by the Finance (No.2) Act of 1971, partly to-clarify this position. The Explanation provides an extensive definition of "jewellery". It includes ornaments made of gold, silver, platinum or any other precious metal whether or not containing any precious or semi-precious stones. It also covers, within the meaning of the term, such items which may or may not be sewn into any wearing apparel. It also includes precious and semi-Precious stones whether or not set in any furniture, utensils or other article, or worked or sewn into any wearing apparel. The Explanation may have extended the meaning of "jewellery" to cover, for example, precious stones by themselves or precious stones set in furniture or utensils. But in so far as it includes ornaments tirade of gold, silver, platinum or any other precious metal or alloy, it is merely clari ficatory in nature. Merely because ornaments made of gold and silver are now expressly included in Explanation 1, it is not possible to hold that they were earlier excluded from the meaning of the tot "jewellery".

In the case of CWT v. Smt. Savitri Devi (1983) 140 ITR 525, a Division Bench of the Delhi High Court held that the word "jewellery" as set out in the dictionaries and as understood in common parlance, includes gold ornaments made for personal use. These are almost always a jeweller's job and cannot be made by anyone. The Delhi High Court has held that the Explanation cannot take away the ordinary meaning of the word "jewellery". The artificially enlarged meaning as given by the definition in Explanation 1 also includes by way of abundant caution the natural meaning of the term. Hence, jewellery, even before the coming into force of the Explanation 1, would include gold ornaments. We agree with the reasoning of the Delhi High Court. This view is reiterated in CWT v. Rukmani Devi (1983) 142 ITR 41 (Delhi).

A similar view has been taken by the Gujarat High Court in the case in CWT v. Jayantilat Amratlal (1976) 102 ITR 105; by the Allahabad High Court of the case of CWT v. His Highness Maharaja Vibhuti Narain Singh (1979) 117 ITR 246, and by the Madhya Pradesh High Court in the case of Nandkishore Girdharilal Modi v. CWT (1981) 132 ITR 868. Another Bench of the Madhya Pradesh High Court in the case of CWT v. Sint. Sonal K. Amin (1981) 127 ITR 427, has, however, taken a contrary view. The Calcutta High Court has also taken a contrary view in the case of CWT v. Aditya Vikram Birla (1978) 114 ITR 711. For the reasons which we have set out above, we do not agree with the contrary vie" expressed by the Calcutta High Court in Aditya Vikram Birla's case (1978) 114 ITR 711 and by the Madhya Pradesh High Court in Sonal K. Amin's case (1981) 127 ITR 427. The Calcutta High Court has placed some emphasis on different vernacular terms used for different types of ornaments. In our view, this is not, in any manner, conclusive of the question whether the term "jewellery" includes ornaments made of precious metals such as gold or silver The contrary decisions are, therefore, overruled.

In the premises, the appeals are allowed with costs

M.B.A./1090/FC Appeals allowed