# ADVANCE BRICKS COMPANY v. ASSESSING AUTHORITY, ROHTAK & ANR

- **Citation:** [1988] 1 S.C.R. 272
- **Court:** Supreme Court of India
- **Decided:** 1987-09-22
- **Case number:** Civil Writ Petition No. 2479 of 1984
- **Bench:** Ranganath Misra, Murari Muhon Dutt
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/advance-bricks-company-v-assessing-authority-rohtak-anr-9721
- **Pages:** 7

## Headnote

Haryana General Sales Tax Act, 1973: ss. 15 & 18---State
Government Notification of 1973-'Sun dried bricks'-Whether
'bricks'-Whetherexigible to sales tax.,
The Notification dated 5th May, 1973, issued by the State
Government under s. 18 of the Haryana General Sales Tax Act
authorised levy of tax under s. 15 of the Act at the fll'St point in
respect of the named goods, of which brick was one. The appellant, a
registered dealer claimed deduction of a certain sum out of the gross
D turnover in respect of assessment of sales-tax for the accounting
period 1981-82, on the ground that be bad purchased sun-dried
bricks on payment of sales tax under the Act and that amount represented the sales price of such tax paid bricks, and that a second
set of tax in the bands of the dealer was not exigible. The claim was
E rejected by the authorities.
The appellant filed writ petition before the High Court, which
rejected bis claim on the ground that raw bricks did not come within
the purview of the notification.
F
Allowing the appeal in part,
G
HELD: The notification dated May 5, 1973 issued by the State ,
Government under s. 18 of the Haryana General Sales Tax Act, 1973
applied to the sun-dried bricks. [274E]
'Brick' is a generic term in which both the sun-dried and ovenbaked varities of brick are included. Sun-dried bricks are, however,
required to undergo a further treatment, namely, the burning ~ro
cess to become bricks proper. They are thus an intermediate stage of
bricks as understood in comllton parlance and are goods in the ordiH nary sense of the term being a commercial commodity. [276G-H; CJ
272
'
ADVANCE BRICKS CO. v. ASSESSING AUTHORITY
273
Lilavati Bai v. The State of Bombay, [1957] SCR 721; Gu/raj A
Singh v. Mota Singh, [19M] 7 SCR 205; Dy. Commissioner, Sales
Tax, v. PIO Food Packed, [1980] 3 SCR 1271 and Indian Carbon
Ltd. v. Superintendent of Taxes, Gauhati, [1972] 1 SCR 316, referred to.
When sun-dried brick is purchased on payment of s:iies-tax and B
purchasing dealer burns the same and sells the same for a higher
price, sales tax should be Ieviable on the sale price of such bricks.
The amount of sales-tax p)lid when sun-dried bricks were purchased,
on production of appropriate declaration can be deducted from the
total amount of tax. This would not prejudice the revenue of the
State nor would it bring about any additional liability unwarranted C
by law so far as the dealer is concerned. [277C·E]
In the instant case the bricks which had been purchased as sundried bricks were burnt by the appellant. He had thus further
treated the sun-dried bricks and produced goods of added value. It D
would not be proper to extend the benefit of total exemption for the
turnover of sale of bricks from tax, but it would be appropriate to
allow set off of the tax paid at the time of the purchase of the sundried bricks, out of the tax exigible on the taxable turnover of burnt
bricks. (277F-G]
If it is found that the appellant had paid sales tax on the sundried bricks, the amount of tax then paid should be given credit and
the balance should be recovered from him. The Taxing Officer to
hear parties and come to his conclusion afresh. [277H; 274G]
The interest of the State would be properly protected if the
impugned notification is changed and so far as brick is concerned
necessary modification is made. Until that is done, the State should
adopt the modality indicated. [277G·H]
E
F
CIVIL
APPELLATE
JURISDICTION:
Civil
G
Appeal
No. 2375(NT) of 1987.
From the Judgment and Order dated 4.9.1984 of the Punjab
and Haryana High Court in Civil Writ Petition No. 2479 of 1984.
H
A
B
274
SUPREME COURT REPORTS
(1988] I S.C.R.
Anil B. Diwan and M.R. Ramachandranfor the Appellant.
S.C. Mahanta, V.K. Mehta, C.V.S. Rao and Mahabir Singh
for the Respondents.
The fqllowing Order of the Court was delivered:
ORDER
Special leave granted.
The appellant is a registered dealer under the Haryana
C General Sales Tax Act, 1973 ('Act' for short) and is also a licencee
under t

## Text

A
B
c
ADVANCE BRICKS COMPANY
v.
ASSESSING AUTHORITY, ROHTAK & ANR.
SEPTEMBER 22, 1987
[RANGANATH MISRA AND MURARI MUHON DUTT, JJ.)
Haryana General Sales Tax Act, 1973: ss. 15 & 18---State
Government Notification of 1973-'Sun dried bricks'-Whether
'bricks'-Whetherexigible to sales tax.,
The Notification dated 5th May, 1973, issued by the State
Government under s. 18 of the Haryana General Sales Tax Act
authorised levy of tax under s. 15 of the Act at the fll'St point in
respect of the named goods, of which brick was one. The appellant, a
registered dealer claimed deduction of a certain sum out of the gross
D turnover in respect of assessment of sales-tax for the accounting
period 1981-82, on the ground that be bad purchased sun-dried
bricks on payment of sales tax under the Act and that amount represented the sales price of such tax paid bricks, and that a second
set of tax in the bands of the dealer was not exigible. The claim was
E rejected by the authorities.
The appellant filed writ petition before the High Court, which
rejected bis claim on the ground that raw bricks did not come within
the purview of the notification.
F
Allowing the appeal in part,
G
HELD: The notification dated May 5, 1973 issued by the State ,
Government under s. 18 of the Haryana General Sales Tax Act, 1973
applied to the sun-dried bricks. [274E]
'Brick' is a generic term in which both the sun-dried and ovenbaked varities of brick are included. Sun-dried bricks are, however,
required to undergo a further treatment, namely, the burning ~ro
cess to become bricks proper. They are thus an intermediate stage of
bricks as understood in comllton parlance and are goods in the ordiH nary sense of the term being a commercial commodity. [276G-H; CJ
272
'
ADVANCE BRICKS CO. v. ASSESSING AUTHORITY
273
Lilavati Bai v. The State of Bombay, [1957] SCR 721; Gu/raj A
Singh v. Mota Singh, [19M] 7 SCR 205; Dy. Commissioner, Sales
Tax, v. PIO Food Packed, [1980] 3 SCR 1271 and Indian Carbon
Ltd. v. Superintendent of Taxes, Gauhati, [1972] 1 SCR 316, referred to.
When sun-dried brick is purchased on payment of s:iies-tax and B
purchasing dealer burns the same and sells the same for a higher
price, sales tax should be Ieviable on the sale price of such bricks.
The amount of sales-tax p)lid when sun-dried bricks were purchased,
on production of appropriate declaration can be deducted from the
total amount of tax. This would not prejudice the revenue of the
State nor would it bring about any additional liability unwarranted C
by law so far as the dealer is concerned. [277C·E]
In the instant case the bricks which had been purchased as sundried bricks were burnt by the appellant. He had thus further
treated the sun-dried bricks and produced goods of added value. It D
would not be proper to extend the benefit of total exemption for the
turnover of sale of bricks from tax, but it would be appropriate to
allow set off of the tax paid at the time of the purchase of the sundried bricks, out of the tax exigible on the taxable turnover of burnt
bricks. (277F-G]
If it is found that the appellant had paid sales tax on the sundried bricks, the amount of tax then paid should be given credit and
the balance should be recovered from him. The Taxing Officer to
hear parties and come to his conclusion afresh. [277H; 274G]
The interest of the State would be properly protected if the
impugned notification is changed and so far as brick is concerned
necessary modification is made. Until that is done, the State should
adopt the modality indicated. [277G·H]
E
F
CIVIL
APPELLATE
JURISDICTION:
Civil
G
Appeal
No. 2375(NT) of 1987.
From the Judgment and Order dated 4.9.1984 of the Punjab
and Haryana High Court in Civil Writ Petition No. 2479 of 1984.
H
A
B
274
SUPREME COURT REPORTS
(1988] I S.C.R.
Anil B. Diwan and M.R. Ramachandranfor the Appellant.
S.C. Mahanta, V.K. Mehta, C.V.S. Rao and Mahabir Singh
for the Respondents.
The fqllowing Order of the Court was delivered:
ORDER
Special leave granted.
The appellant is a registered dealer under the Haryana
C General Sales Tax Act, 1973 ('Act' for short) and is also a licencee
under the Haryana Control of Brick Supply Order, 1972 ('Order'
for short). In respect of assessment of sales-tax for the accounting
period 1981-82, it claimed deduction of a sum of Rs.1,49,600.92 out
of the gross turnover on the ground that it had purchased sun-dried
D bricks from one Sardool Singh, a registered dealer on payment of
sales-tax under the Act and that amount represented the sale price
of such tax-paid bricks. The claim was rejected by the authorities
under the Act. In the writ petition before the High Court the claim
was rejected on the ground that raw bricks (i.e. unburnt bricks) did
B not come within the purview of the notification of 5th May, 1973,
issued by the State Government in exercisf: of power vested under
Section 18 of the Act prescribing levy of tax at the first point in
reslJect of the named goods of which brick was one.
Two questions have been placed for our consideration: (i)
F whether as a fact the appellant has paid sales-tax on the purchase of
sun-baked bricks from the seller as claimed and the appropriate
declaration has been produced in the assessment proceedings; and
(ii) whether bricks used in the notification of 1973 covered sundried bricks.
G
So far as the first question is concerned it is one of fact and
both parties have agreed that we may direct the Taxing Officer to
.~·
hear parties and come to his conclusion afresh. That situation would
)-
arise if we accept the contention of the assessee on the other score.
We shall, therefore, proceed to examine the correctness of the
H other contention.
. .J..
ADVANCE BRICKS CO. v. ASSESSING AUTHORITY
275
The term 'Brick' has not been defined in the Act. The High A
Court has adopted the definition given in the Order, where it has
been defined as 'piece of burnt clay having geometrical shape fixed
in a kiln'. It is not disputed that the Order has nothing to do with
the Act. In the absence of a statutory definition of the term 'Brick',
the common parlance meaning of the word as found in dictionaries
has to be accepted. (See Lilawati Bai' s case 1957 SCR 721 and B
Gajraj Singh's case [1964] 7 SCR 205. Counsel for the appellant also
relied upon the decisions of this Court in the cases of Dy. Commissioner, Sales Tax. v. PIO Food Packed, [1980] 3 SCR 1271 and
Indian Carbon Ltd. v. Superintendent of Taxes, Gauhati, [ 1972] 1
SCR 316 in support of his submissions. According to Collins English
Dictionary 'brick' means 'a rectangular block of clay mixed with C
sand and fired in a kiln or baked by the sun.. used in building
construction'. New Webster's Dictionary carries the meaning of the
word as: 'a block of clay usually rectangular, hardened by the sun or
by burning in a kiln and used for building, paving etc.' According to
the Oxford English Dictionary 'brick' means 'a substance formed of D
clay, kneaded, moulded, and hardened by baking with fire, or in
warm countries and ancient times by drying in the sun'. Encyclopaedia Britannica indicates that 'after the bricks are formed, they
must be dried to remove as much free water as possible. Drying,
apart from sun-drying, is done in drier kiln with controlled, draft E
and humidity'.
We have on record the Schedule of Rates of the Haryana
Public Works Department of the contemporaneous time which
shows that while the rate per thousand of sun-dried bricks was
1 Rs.15, oven-burnt bricks of that quantity of the first class cost Rs.75
F
··""""Jive times more. The sun-dried bricks, though a form of brick are
~··
not indeed the same as burnt bricks. As seen above though they
have many things common with baked bricks, they are not a complete substitute thereof. A customer in the market would not ordinarily be prepared to accept the sub-dried bricks to meet his G
requirement of bricks for house construction. As was rightly
pointed out by appellant's counsel sun-dried brick is goods of an
intermediate stage.
We are satisfied that the High Court went in wrong placing
full reliance on the definition of the term 'Brick' in the Order and. H
276
SUPREME COURT REPORTS
[ 1988] 1 S. C.R.
A therefore, the proper perspective of the issue for determination has
been lost sight of. For brick making, clean~:d clay and sand mixed in
desired proportion are put into sized frames and after the extra substance is removed, the raw brick is taken out of the frame and is laid
on the field to dry up and become hard. If it intended to make hard
13
bricks, the same are stacked into a kiln and adequately heated up by
fire. There are various methods of burning the bricks. If not b!!fllt,
the sun-dried bricks are not hard enough to take good load. Sundried bricks are thus an intermediate stage of bricks as understood
c
in common parlance and are goods in the ordinary sense of the term
being a commercial commodity.
Section 18 of the Act authorises the State Government by
notification to direct that in respect of named goods, tax under
Section 15 of the Act may· be levied at the first stage of sale thereof
and on the issue of such a notification, tax on such goods shall be
levied accordingly. 'Brick' under the notification is taxed at the first
D point of sale. The dealer claimed deduction on the basis of the
notification by maintaining that he had purchased the bricks from
the manufacturer and at that point had paid the tax. Thus a second
set of tax in the hands of the dealer was not exigible. The reasoning
given by the taxing authorities as also the High Court cannot be
E sustained. As the counsel for the appellant pointed that 'brick' is a
generic term; as per the meaning of the term in common parlance
and dictionaries sun-dried bricks are bricks of a class and both varieties of bricks can to a considerable extent be used for the same
purpose as substitute of one another. As the term 'Brick' covers
both sun-dried and oven-baked bricks, and there is no definition in
\
f
the Act, the contention of the appellant that sun-dried bricks are a )..
class of 'brick' to which the notification under Section 18 applies
cannot be thrown out as wrong.
We have already pointed out that though both the varieties of
G brick are included in the generic term 'brick', the use to which these
are put is not the same. We have also pointed out that there is a
considerable difference in the price. Sun-dried bricks are required
to undergo a further treatment, namely, the burning process to
become bricks proper, when burnt, bricks are: sold at a substantially
higher price to meet different demands in the market. The appellant
H after purchasing sun-dried bricks has burnt them and sold the same ,
'""'
I
•
(
'"
'
ADVANCE BRICKS CO. v. ASSESSING AUTHORITY
277
for higher consideration.
A
Learned counsel for the State rightly contended that if sundried brick is accepted as 'brick' within the meaning of the notification, on the basis of the provision for taxing at the first point in
regard to sale of bricks, by paying tax on the low consideration of
sun-dried bricks, the dealer would escape liability of sales-tax on B
the tum-over of baked bricks. Undoubtedly this would be the position. We accordingly suggested to counsel for the State that this
situation should be appropriately met and the interest of the State
would be properly protected if the notification in questions changed
and so far as brick is concerned, necessary modification is made.
Where sun-burnt brick is purchased on payment of sales-tax and the C
purchasing dealer (whose assessment is in issue) bums the same and
sells the same for a higher price, sales-tax should be leviable on the
sale price of such bricks. The amount of sales-tax paid when sundried bricks were purchased on production of appropriate declaration can be deducted from the total amount of tax. This would not D
prejudice the revenue of the State nor would it bring about any
additional liability unwarranted by law so far as the dealer is
concerned. The impugned notification would not serve the purpose
indicated and would require amendment. It is up to the State to
take the requisite steps.
E
Now what remains for consideration is: whether the appellant
would succeed in the claim for deductions. It is not disputed by
appellant's counsel that the sale price of bricks which had been
purchased as sun-dried bricks and sold for the price of
Rs.1,49,600.92 were burnt by the appellant. On the finding that the F
appellant had further treated the sun-dried bricks and produced
goods of added value, we do not think it would be proper to extend
the benefit of total exemption for the tum-over of sale of bricks
from tax. The notification of the State Government is somewhat
misleading; it would thus be appropriate to allow set-off of the tax G
paid at the time of the purchase of the sun-dried bricks out of the
tax exigible on the taxable tum-over of burnt bricks. While setting
aside the judgment of the High Court we would direct that until
appropriate amendment to the notification is made, the State
should adopt the modality indicated above-. In the instant case' if it is
found that appellant had paid sales-tax to Sardool Singh, the
H
278
SUPREME COURT REPORTS
[1988] 1 S.C.R.
A amount of tax then paid should be given credit and the balance
~
B
should be recovered.
The appeal is allowed to the extent indicated above. Parties
shall bear their respective costs.
P.S.S.
Appeal allowed.