# AVADH SUGAR MILLS LTD v. THE SALES TAX OFF1CER, SITAPUR & ANOTHER

- **Citation:** [1973] 3 S.C.R. 546
- **Court:** Supreme Court of India
- **Decided:** 1973
- **Case number:** CivHAppeal No. 1352 of 1970
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/avadh-sugar-mills-ltd-v-the-sales-tax-off1cer-sitapur-another-5899
- **Pages:** 2

## Headnote

AVADH SUGAR MILLS LTD.
v.
THE SALES TAX OFF1CER, SITAPUR & ANOTHER
February 22. 1973
.[K. S. HEGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ:]
U. P. Sales Tax Act 1948-Purchase tax
on
oilseeds-Groundnuts
.whether oilseeds.
The petitioner appellant purchased groundnuts mostly from cultiva·
tors for the m""1facture of oil.
~lying on decisions of the Madhya
Pradesh and Punjab High Court he coo.tended that
grc>undnuts
were
.not oilseeds and thus not liable .to be subjected to purchase-tax under
the UJ'. Sales Tax Act. The Allahabad High Court rejected the contention. In appeal by certificate,
HELD : In fipding out the tru~ meaning of term 'oilseeds' found in
·the Sales·T'llX law in question the Co.urt must refer not to tl\i! dictionary
meaning but the meaning ascribed to the term in commercial parlance.
1bere can hardly be any doubt that in commercia.1 circles groun<tnut is
d,ealt with as oilseed. The commercial journals refer to groundnuts as
a species of oilseeds. [5470-F!
Commissioner of Sales Tax, Mcdhya Pradesh, Indore v. laswant Singh
·Cluzran Singh, ( 19 S.T.C. 469), relied on.
A seed is one which germinates. It is not disputed that the groundnut germinates. Hence it is undoubtedly seed. It is mostly used for
the ·manufacture of groundnut oil which is an edible oil. The decision
relied OP by the appelhlllt mu•t accordingly be held to be wrong and
1he appeal must be dismissed. [547F-G]
Commissioner of Sal.es Tax, Madhya Pradesh, Indore v. Bakhat Rai
cl Co.
(18 S.T .. C. 285) and Hans Rai Choudhri v. l. S. Rajyana,
Excise and Taxation Officer, (19 S.T.C. 489), disapproved.

## Text

AVADH SUGAR MILLS LTD.
v.
THE SALES TAX OFF1CER, SITAPUR & ANOTHER
February 22. 1973
.[K. S. HEGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ:]
U. P. Sales Tax Act 1948-Purchase tax
on
oilseeds-Groundnuts
.whether oilseeds.
The petitioner appellant purchased groundnuts mostly from cultiva·
tors for the m""1facture of oil.
~lying on decisions of the Madhya
Pradesh and Punjab High Court he coo.tended that
grc>undnuts
were
.not oilseeds and thus not liable .to be subjected to purchase-tax under
the UJ'. Sales Tax Act. The Allahabad High Court rejected the contention. In appeal by certificate,
HELD : In fipding out the tru~ meaning of term 'oilseeds' found in
·the Sales·T'llX law in question the Co.urt must refer not to tl\i! dictionary
meaning but the meaning ascribed to the term in commercial parlance.
1bere can hardly be any doubt that in commercia.1 circles groun<tnut is
d,ealt with as oilseed. The commercial journals refer to groundnuts as
a species of oilseeds. [5470-F!
Commissioner of Sales Tax, Mcdhya Pradesh, Indore v. laswant Singh
·Cluzran Singh, ( 19 S.T.C. 469), relied on.
A seed is one which germinates. It is not disputed that the groundnut germinates. Hence it is undoubtedly seed. It is mostly used for
the ·manufacture of groundnut oil which is an edible oil. The decision
relied OP by the appelhlllt mu•t accordingly be held to be wrong and
1he appeal must be dismissed. [547F-G]
Commissioner of Sal.es Tax, Madhya Pradesh, Indore v. Bakhat Rai
cl Co.
(18 S.T .. C. 285) and Hans Rai Choudhri v. l. S. Rajyana,
Excise and Taxation Officer, (19 S.T.C. 489), disapproved.
CIVIL APPELLATE JURISDICTION : CivHAppeal No. 1352 of
1970.
Appeal by certificate from the judgment and order dated 7th
day of August 1967·of the.Allaliabad High Court in Special Appeal
No. 94 of 1967.
·
.
M. C. Chag/a, Suresh Sethi, Ji. K. Maheshwari, Maya Krirhan
and B. P. Maheshwari, for the appellant.
N. D. Karkhanis ;ind 0. P. Rana, for the respondents.
The Judgment of the Court was delivered by
HEGDE, J ...... This is an appeal by certificate. The only question that arises for decision is whether groundnut is oilseed. The
High Court has come to the conclusion that the groundnut is oilseed.
The question is to the nature of groundnut came up for
consideration !n connection with the levy of purchase-tax on the
purchase of oilseed. The assessee in-this case is a manufacturer
of oil and the assessee appears to have purchased groundnuts in
A
B
c
D
,
E
F
G
H
AVADH SUGAR MILLS V. S.T.O., SITAPUR (Hegde, /.)
547
A
large quantity for the manufacture of oil. He contended before
the assessing authorities as well as before the High Court, unsuccessfully, that groundnut is not oilseed.
In support of that
contention, he relied on the decision of the Madhya Pradesh High
Court in Commissioner of Sales Tax, Madhya Pradesh, Indore v.
Bakhat Rai & Co. (18 S.T.C. 285) and the decision of a single
B
Judge of Punjab & Haryana High Court in Ha~ Raj .Choudhri
v. J. S. Rajyana, Excise and Taxation Officer (19 S.T.C. 489).
These two decisions undoubtedly support his c\)ntention.
The
learned Judge of the Allahabad High Court have not ,accepted
those decisions as laying down the law correctly and we are in
agreement with the view taken by the learned Judges of the
c
Allahabad High Court.
D
E
.F
G
The petitioner in his Writ Petition has definitely ,stated that
he purchased groundnuts mostly from cultivators for the manufacture of oil. Hence there is no doubt that he purchased groundnut for the purpose of manufacturing oil.
We shall now proceed to consider whether groundnuts are
seeds and further whether they are oilseeds. In finding out the
true meianing of term "oilseeds" found in the Sales-tax law in
question, we are not to refer to dictionaries. We are to find out
the meaning ascribed to that term in commercial parlance. See
the decision of this Court in Commissioner of Sales Tax, Madhya
Pradesh, Indore v. Jaswant Singh Charan Singh (19 S.T.C. 469) ..
There can hardly be any doubt that in commercial circles growljfnut is dealt with as oilseed. The commercial journals and newspapers while quoting the market price of oilseeds list groundnuts
'as one of the species ol oilseeds. From this, it is clear that in
rommercial circles groundnut is treated ·as oilseed.
A seed is one which germinates. It is not disputed that the
groundnut germinates. Hence it is undoubtedly seed. The next
question .is whether it is generally used for manufacture of -oil.
Here agam, there can hardly be any doubt that groundnut is mostly
used for 1the manufacture of groundnut oil which is used in the
~anufacture of Dalda and other cooking media. · Groundnut
ts one of the items which is mostly used in this country for the
manufacture of cooking media.
In '?ur opinion, bolh; the Madhy:a Pradesh High Court and
ithe Pun1ab & Haryana High Court were wrong in holding that
groundnut is not oilseed.
·
For the reasons mentioned above, this appeal iS dismissed with
B
costs •
.G.C.
Appeal dismiued.