MESSRS WORLD TRADE CORPORATION VS THE EXCISE & SALES TAX, APPELLATE TRIBUNAL (LAHORE BENCH), LAHORE
1999 P T D 1179
[Supreme Court of Pakistan]
Present: Irshad Hasan Khan, Munir A. Sheikh andWajihuddin Ahmed, JJ
Messrs WORLD TRADE CORPORATION
Versus
THE EXCISE & SALES TAX, APPELLATE TRIBUNAL (LAHORE BENCH), LAHORE and 2 others
Civil Petition No. 2001-L of 1998, decided on 17/12/1998.
(On appeal from the judgment dated 30-9-1998 of the Lahore High Court in C.A. No.69 of 1998).
(a) Sales Tax Act (VII of 1990)_
----S. 13 & 6th Sched., S. No.3(ii)---Unprocessed foodstuff for human consumption---Exemption---Word "unprocessed "---Connotation---Only such foodstuffs as are unprocessed, would qualify for exemption from sales tax---
Tamarind with seeds being not an unprocessed foodstuff was not qualified for exemption.
All kinds of foodstuff(s) exempted from sales tax under Serial No.3 of the Sixth Schedule of which, currently, there subsist as many as eleven sub-entries, are qualified by the word "unprocessed". To put the matter more explicitly, it is only such foodstuff(s) as are "unprocessed", which would qualify for the exemption. Tamarind with seeds was not in an unprocessed form. Thus, the same did not qualify for exemption.
The normal rule is that words in a statute, unless the context otherwise warrants or the Legislature exhibits a different intention are to be accorded their ordinary natural meanings. Sixth Schedule, Item No.3 (ii) of Sales Tax Act, 1990, in relation to the word "unprocessed" has resorted to both these devices. As a result, ordinarily literal meanings shall have to be ascribed to the word except when in a given context, the Legislature, cognisant of attending exigencies, has either expanded or curtailed its connotations. Thus, whereas the controlling words of the entry remain constant, some of the aspects of processing, though not all, are exemplified by sub-item (ii) itself, when such pointedly exclude from the exempted category "fruits; fruit juices and vegetables, bottled, canned or packaged". Now, according to ordinary dictionary meanings, the word "process" used as a verb, inter alia, equals "to prepare (agricultural produce) for marketing e.g. by canning, bottling or treating it chemically". Therefore, while packaging s, additionally illustrated in the sub-heading, there is nothing to suggest that other normal forms of processing, manual, mechanical or chemical, have thereby been excluded. Indeed, there are items in the heading e.g. 3(iv) where packing is not treated as processing, such as freezing or otherwise preserving, is not taken as processing under the item in hand viz. 3(ii). The position, therefore, remains that only such of the foodstuffs stand exempted from sales tax, as be in the generic unprocessed form, the Legislature explicitly exercising its own option to deviation, wherever, in relation to a given sub-item, it deems fit. The only categories excluded from the circumstance of processing in Serial No.3(ii) of the Sixth Schedule are freezing or otherwise preserving, normally falling within the element of processing. No occasion arises for further limiting the ambit of the qualifying word "processed" occurring in the entry.
In the present case, Tamarind has been imported not in its natural form but as Tamarind pods. The word "pods", used as a noun, in its ordinary significance, signifies usually "a long thin case containing seeds that develop from the flowers of various plants, especially peas and beans". This, in turn, would suggest a situation where Tamarind pods had been separated from Tamarind for the purposes of marketing and sale, implying the use of a process, manual or mechanical, causing a difference in substance and thus taking away the produce from the category of exemption.
(b) Interpretation of statutes---
---- Meaning of words in a statute---Words in a statute, unless the context otherwise warrants or the Legislature exhibits a different intention, are to be accorded their ordinary meanings.
(c) Words and phrases---
"Unprocessed" ---Word "unprocessed "---Connotation.
Izharul Haque, Advocate Supreme Court and Tanvir Ahmed, Advocate-on-Record for Petitioner.
Nemo for Respondents.
Date of hearing: 17th December, 1998.
ORDER
WARHUDDIN AHMED, J.---The petitioner imported a consignment, describing the same as tamarind with seeds, the import being from Bangkok, Thailand. The Customs Examination and Appraisal staff, after examination, said that exemption in the payment of sales tax at the rate of 12-1/2 per cent was not admissible to the goods in question because the same were in processed form. On appeal before the Collector (Appeals), the appellate forum recorded the contentions and the position taken before him by the importer in the under noted words:---
"On the next date fixed for hearing on 13-4-1998 Sheikh AbdulHafeez, Proprietor of the appellants firm appeared and again stated forcefully that the consignment of Tamarind with seeds was not chargeable to sales tax. When asked if the sample drawn at the time of physical examination be sent for laboratory test with a view to determining the fact as to whether the goods were in unprocessed form or were processed he stated that he did not want any laboratory test nor he contested the plea of the department that the goods were in processed form. He further stated that even if the goods be in processed shape he did not want to contest it. His point of view was that the goods in question were not imported in bottled, canned or packaged shape, hence the exemption envisaged in Sixth Schedule of the Sales Tax Act, 1990 was available. "
The Collector rejected the petitioner's plea for exemption of sales tax, recording his conclusion as below:---
"I have given due consideration to the version of both the parties. I am of considered view that the exemption from sales tax as envisaged in Sixth Schedule of the Sales Tax Act, 1990 (serial No.3-II) is available to unprocessed foodstuff only including fruits. Tamarind has been classified as one of the fruits under P.C.T. heating 0813-4010 but no exemption can be claimed if it has not been imported in its natural form. The goods imported by the appellant have been found as having been obtained from Tamarind pods by way of mechanical process and not in their natural unprocessed form. "
A further appeal taken before the Customs, Excise and Sales Tax Appellate Tribunal (Lahore Bench) was dismissed on 4-6-1998, such Tribunal recording its conclusion as below:---
"The entry at Serial No.3(ii) of the Sixth Schedule of the Sales Tax Act, 1990 pertains to unprocessed foodstuff which has not undergone any transformation through manual or mechanical process etc. As to the goods-in-question, it is an admitted fact that these were subjected to mechanical process through tamarind pods. As a result thereof, these fall outside the purview of the generic entry of unprocessed foodstuff referred to above. The stand of the appellants that only those vegetables, fruits, and fruits juices can be excluded from the generic entry which are bottled, canned or packaged has no nexus with The phraseology used therein and appears to be more of a figment of their imagination and not in the context of any legal parlance."
In consequence, the importer preferred C.A.69 of 1998 before the Lahore High Court, but a Division Bench of that Court on 30-9-1998 declined to interfere and dismissed it, giving rise to the present leave petition.
The petitioner claims exemption under section 13(1) of the Sales Tax Act, 1990 read with the entry at Serial No.3(ii) of the Sixth Schedule appended with the said Act. These provisions read:
Section 13(1) of the Sales Tax Act, 1990
"13. Exemption.---(1) Notwithstanding the provisions of section 3,
supply of goods or import of goods specified in the Sixth Schedule
shall, subject to such conditions as may be specified by the Board,
be exempt from tax under this Act. "
Entry at serial No.3(ii) of the Sixth Schedule to the Sales Tax Act,
1990.
| Sr. No. | Description | Heading Nos. of the First Schedule to the Customs Act,1969 (IV of 1969) |
| (1) | (2) | (3) |
| 1. | | |
| 2. | ............ | |
| 3. | Unprocessed food stuff for human consumption which shall mean :- (i) .. (ii) all vegetables, fruits and fruit juices whether fresh, frozen or otherwise preserved [e.g., in cold storage'} But excluding fruits, fruit-juices and vegetables bottled, canned or packaged;" | Respective headings |
In the first place, all kinds of "foodstuff(s) exempted from sales tax under serial No. 3 of the Sixth Schedule of which, currently, there subsist as many as eleven sub-entries, are qualified by the word "unprocessed". To put the matter mote explicitly, it is only such foodstuff(s) as are "unprocessed", which would qualify for the exemption, aforementioned. Admittedly, as recorded by the Collector, the foodstuff in question was not in an unprocessed form. Thus, the same did not qualify for exemption.
The normal rule is that words in a statute, unless the context otherwise warrants or the Legislature exhibits a different intention are to be accorded their ordinary natural meanings. The instant legislation in relation to the word "unprocessed" has resorted to both these devices. As a result, ordinarily literal meanings shall have to be ascribed to the word except when in a given context, the Legislature, cognisant of attending exigencies, has either expanded or curtailed its connotations. Thus, whereas the controlling words of the entry remain constant, some of the aspects of processing, though not all, are exemplified by sub-item (ii) itself when such pointedly excludes from the exempted category "fruits, fruit juices and vegetables, bottled, canned or packaged". Now, according to ordinary dictionary meanings, the word "process" used as a verb, inter alia, equals "to prepare (agricultural produce) for marketing e.g. by canning, bottling or treating it chemically". Therefore, while packaging is, additionally illustrated in the 8 sub-heading, there is nothing to suggest that other normal forms of processing, manual, mechanical or chemical have thereby been excluded. Indeed, there are items in the heading e.g. 3(iv) where packing is not treated as processing, such as freezing or otherwise preserving, is not taken as processing under the item in hand viz. 3(ii). The position, therefore, remains that only such of the foodstuffs stand exempted from sales tax, as be in the generic unprocessed form, the Legislature explicitly exercising its own option to deviation, wherever, in relation to a given sub-item, it deems fit. The only categories excluded from the circumstance of processing in serial No.3(ii) of the Sixth Schedule are freezing or otherwise preserving, normally falling within the element of processing. No occasion arises for further limiting the ambit of the qualifying word "processed" occurring in the entry.
The above conclusion is strengthened by the fact that tamarind has been imported not in its natural form but as tamarind pods. The word "pods", used as a noun, in its ordinary significance, signifies usually "a long thin case containing seeds that develops from the flowers of various plants, especially peas and beans". This, in turn, would suggest a situation where tamarind pods had been separated from Tamarind for the purposes of marketing and sales, implying the use of a process, manual or mechanical, causing a difference in substance and, thus, taking away the produce from the category of exemption.
Our conclusion, therefore, is that the orders impugned in this leave petition are unexceptionable and do not call for any interference. The petition is dismissed and leave declined.
M.B.A./W-29/SCPetition dismissed.