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M/S. MOTIPUR ZAMINDARY CO. (PRIVATE) LTD V. STATE OF BIHAR

M/s. Motipur Zamindary Co. (Private) Ltd. v. State of Bihar, AIR 1962 SC 660

ISSUE:

  • Whether sugarcane falls within the term “green vegetables” and is therefore exempt from sales tax under section 6 of the Bihar Sales Tax Act, 1947?
  • Whether the appellant, being a producer of sugar cane, was not a “dealer” within the meaning of the Act?

RULE:

  • The word “vegetable” in taxing statutes is to be understood as in common parlance, i.e., denoting a class of vegetables that are grown in a kitchen garden or on a farm and are used for the table.

FACTS:

  • The Government issued a notification under section 6 of the Bihar Sales Tax Act, 1947, exempting certain goods from the payment of sales tax, including “green vegetables other than potatoes, except when sold in sealed containers.”
  • The Appellant, who was a producer of sugarcane, was assessed to sales tax. He contended that sugarcane was a green vegetable and was exempted from tax and that he was not a dealer as defined in section 2(c) of the Act and could not be assessed to sales tax.
  • It was held that sugarcane was not a green vegetable and was not exempted under the notification.
  • The case later went to Supreme court under Special Leave Petition.

HELD:

  • The Court held that sugarcane was not a green vegetable and was not exempted under the notification.
  • The word “vegetables” in taxing statutes was to be understood as in common parlance, i.e., denoting a class of vegetables that were grown in a kitchen garden or on a farm and were used for the table.
  • In Webster’s dictionary “sugar cane” has been defined as “a grass extensively grown in tropical and warm regions for its sugar” and in Oxford dictionary it is defined as “a tall perennial grass cultivated in tropical and sub-tropical countries and forming the chief source of unmanufactured sugar”. Therefore, sugarcane cannot falls within the definition of the words “green vegetables”.
  • The Court relied on Ramavtar Budhaiprasad v. Assistant Sales Tax Officer, Akola, in which, under an almost identical entry it was held that “betel leaves” is not included in the term “vegetables”.
  • Further, the Court referred to the definition of dealer as given in section 2(c) of the Act and held that the words of this subsection are very wide and cover the case of the appellant and in accordance with the said provision, the appellant would be considered a “dealer”.
  • Therefore, according to the Supreme Court, the appeals and the petitions under Art. 32 were without merit and were therefore dismissed with costs.