# 'J ~65 MARTAND DAIRY & FARM v. THE UNION OF INDIA & ORS

- **Citation:** [1975] Supp. 1 S.C.R. 265
- **Court:** Supreme Court of India
- **Decided:** 1975-04-23
- **Case number:** Writ Petition No. 55 and 56 of 1970
- **Bench:** R. Krishna Iyer, R. S. Sarkaria, A. C. Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/j-65-martand-dairy-farm-v-the-union-of-india-ors-6516
- **Pages:** 5

## Headnote

B
Ceniral Sales Tax Act 1956-"Sealed Container"-Meaning of.
A notification i"'ued under the Central Sales Tax Act, 1956 allowed ex·
emption to, among others, cream but excluding "products sold in sealod OOBtainers". The appellant sends cream to Calcutta in sealed containers. The
"Sales tax authorities held that the sales were of cream, that they "Were inter~
C
.state Sales but that the exemption extended by the notification could not be
.enjoyed by the Msessee since he fell within the area of exclusion contained in
, the exemption notification.
. . The High Court rejected the writ petition of the appellant On . appeal
to this Court it was contended that the containers were used for bulk tranomission, that sealing was for 'preventing abuse on the way or to avoid pilferas;e
D
,and that the emphasis should be on the "cream" and- the container bad no
relevance in the context.
Dismissing the appeal,
HEID : It is not for the Court to launch on ob6cure fiscal astroloa but
merely to conStrue what
has been expressed in plain words. _ "Sealed container" merely means a container which is "so closed that access to the
:cootents
is
impossible
without
breaking
the
fastening.
The
eXJ>reo- . , E
sion seal in this context does not involve affixture of the seal of -the
ooller such as impressing a signet in wax etc., as evidence or guarantee of
authenticity.
An article may be regarded as put in sealed conta'iners if it is
·Closed
securely in any vessel or container by any kind of fastening or covering that must be broken before access can be obtained to what i• packed
in.side. This is the popular, perhaps the lit.eral, meaning of the expretlllliom:
1l8ed in the notification.
Maybe the State though\ . that .sealed containen
would be used only by big manufacturers who were able to bear the burden . - F
-Of tax ; maybe administrative conveniellce in assessing quantities sold in- ·
<luced this step. [269B·DJ
·
Con1inissioner qf Sales Tax, U.P., v. G. G. Industries; 21 S.T.C. 63 follow-
.ed.
.
Govindram Ramprasad v. Assessing Auhority (Sales Tax) 8 S.T.C. 407,
theld inapplicable.
G
ClvIL APPELLATE JurusosCTION : Civil Appeals Nos .. 1623 and
1624 of 1971.
From the Judgment aitrl Order dated the 13th bctober, 1970 of
the Allahabad High Court in O.M. Writ Petition No. 55 and 56 of
1970.
. S. T. Desai, Naunit Lal and Miss Lalita Kohli for the appellant.
'
.
. G. L. Sanghi, .Girish Chandra and E. N. Sachthey for respondoot
~1.
.
.
S. C. Manchanda and 0. P. Rana for Respondents Nos. 2-4.:
H
r--
.,
266
.A
_,._
~ ~;
[1975] SUPP· $.C.R.
rl~~)f
SUPll.EME COURT REPORTS

## Text

'J
~65
MARTAND DAIRY & FARM
v.
THE UNION OF INDIA & ORS .
April 23, 1975
[V, .R. KRISHNA IYER, R. S. SARKARIA AND A. C. GUPTA, JJ.J.
B
Ceniral Sales Tax Act 1956-"Sealed Container"-Meaning of.
A notification i"'ued under the Central Sales Tax Act, 1956 allowed ex·
emption to, among others, cream but excluding "products sold in sealod OOBtainers". The appellant sends cream to Calcutta in sealed containers. The
"Sales tax authorities held that the sales were of cream, that they "Were inter~
C
.state Sales but that the exemption extended by the notification could not be
.enjoyed by the Msessee since he fell within the area of exclusion contained in
, the exemption notification.
. . The High Court rejected the writ petition of the appellant On . appeal
to this Court it was contended that the containers were used for bulk tranomission, that sealing was for 'preventing abuse on the way or to avoid pilferas;e
D
,and that the emphasis should be on the "cream" and- the container bad no
relevance in the context.
Dismissing the appeal,
HEID : It is not for the Court to launch on ob6cure fiscal astroloa but
merely to conStrue what
has been expressed in plain words. _ "Sealed container" merely means a container which is "so closed that access to the
:cootents
is
impossible
without
breaking
the
fastening.
The
eXJ>reo- . , E
sion seal in this context does not involve affixture of the seal of -the
ooller such as impressing a signet in wax etc., as evidence or guarantee of
authenticity.
An article may be regarded as put in sealed conta'iners if it is
·Closed
securely in any vessel or container by any kind of fastening or covering that must be broken before access can be obtained to what i• packed
in.side. This is the popular, perhaps the lit.eral, meaning of the expretlllliom:
1l8ed in the notification.
Maybe the State though\ . that .sealed containen
would be used only by big manufacturers who were able to bear the burden . - F
-Of tax ; maybe administrative conveniellce in assessing quantities sold in- ·
<luced this step. [269B·DJ
·
Con1inissioner qf Sales Tax, U.P., v. G. G. Industries; 21 S.T.C. 63 follow-
.ed.
.
Govindram Ramprasad v. Assessing Auhority (Sales Tax) 8 S.T.C. 407,
theld inapplicable.
G
ClvIL APPELLATE JurusosCTION : Civil Appeals Nos .. 1623 and
1624 of 1971.
From the Judgment aitrl Order dated the 13th bctober, 1970 of
the Allahabad High Court in O.M. Writ Petition No. 55 and 56 of
1970.
. S. T. Desai, Naunit Lal and Miss Lalita Kohli for the appellant.
'
.
. G. L. Sanghi, .Girish Chandra and E. N. Sachthey for respondoot
~1.
.
.
S. C. Manchanda and 0. P. Rana for Respondents Nos. 2-4.:
H
r--
.,
266
.A
_,._
~ ~;
[1975] SUPP· $.C.R.
rl~~)f
SUPll.EME COURT REPORTS
The Judgment of the Court was delivered by :
..
')'I''
KRISHNA IYER, J.-Mr. s. T. Desai, counsel for the appellants
. ....,~
in both the appeals, correctly assured us that the facts are not in
B
dispute, although the legal inference bearing on taxability is very
much in controversy.
The appellant, who has atTived in this Court by certificate under
Art. 133(1) (a) of the Constitution, urges before us that he is not
liable to sales tax under the Central Sales Tax Act, 1956 (LXX!V
of 1956) {for short, the Act) sought to be levied from him. Admittedly the appellant is a leading dairy of Benaras anid has been
· sending cream to Calcutta for being converted into butter or ghee.
C The long journey involved and the considerable quantities despatched
necessarily called for protective receptacles during transport. So the
cream used to be carefully sent in canisters whose lids were sealed
. by the seller. The Calcutta buyers received the cream and paid for
it on the basis of the ghee/butter recovered from the cream supplied.
Although there was some controversy even on the facts, counsel on
D both sides proceeded on the factual findings recorded by the Judge
(Revisions) who held that the sales were of cream, that they were
inter-State sales and that the exemption extended by Government
notification under the Act for cream could not he enjoyed by the
assessee as he fell with.in the area of exclusion contained in the exemption notification. It is appropriate at th.is stage to reproduce the
E notification, dated May 10, 1956, under
which the exemption is
claimed. It reads :
F
"No. ST-3506/X
D/10-5-56
Exemption has been allowed to :
Milk and Milk products such as Chhena, Dahl, kha,
Butter and Cream but excluding (i) products sold in sealed
containers (ii) sweet-meats and (iii) ghee."
Th.is in general tenns cream is exempted from payment of Central
Sales Tax by virtue of this notification but it carves out an exception
to the exemption. If the cream were 'sold in sealed containers' the
seller could not come within Jhe exemption notification. We need
G not go into the technique of sealing adopted in this case since it is
common ground now that the cream is put in containers whose lids
are properly soldered. The short question is whether cream sold in
soldered containers in. the circumstances set out above can be described
appropriately as 'products sold in sealed containers'.
Fascinated we were by the imaginative and realistic pictnrisation
H of the expression 'products sold in sealed containers' projected by
Shri S. T. Desai, counsel for the assessee-appellant but, on further
reflection, we veered round to the view presented by Sri Sanghi, for
tl·e State, that after all law is not always logic and taxation considera-.
tions may stem from administrative experience and other factors of
life and not artistic 1isualisation or neat logic and so the literal, though
pedestrian, interpretation must prevail.
-
. 41
•
i
.
. . :MARTANI) PAIRY ANI) :FARM v •. UNJON (l(rishna Iyer, J.)
267
}1)e High Co11rt has negatived 'the plea of the assessee anQ since
-"'.
wf ai:e jnclined U1 agtee with its reasoning, we express out grounds
o;nly · priefly, althQugh we may, . in passing, make reference to two
decisions cjted, before us, viz., Govindram l?.amprasad v. Assessing
Authority (Sales Tax)(') and Commissioner of Sales T!JX, U.P. v,
G. ·t;. Industries('). Govindram(l ).:_a decision of the Madhya Pradesl\' }ligh Court-'-is not germane to the qljestion \ve are dealing with
B
and therefore we need not discuss it. The latter-The Commissioner
of Sales Tax, U.P. ( 2)-we shall discuss as it in some measure, governs
thC issue before us.
The assessce's main contention is that cream solt! in sealed containhs must bear a 'markel' meaning, if we may say' so, and not be
taken literally. What Shri Desai urges is that there are many articles
which th.c consumers buy on the strength of the image projected before
them in their packed st.ate. For instance, a well-secured box of chocolates, carton of dried fruits or a tin of coffee put out with well-known
mar'kings, a sealed bottle of whisky sold in such manner that its
quality, quantity and genuineness are easily acceptable-these, going by
the consumers' habit of looking for articles properly packed or tinned
an.d acquiripg a special value as a unit of consumer commodity, may
legitimately be described as items 'sold in sealed ,containe~'. If we consult our housewives or our village vendor$, there' is no doubt that there.
ill11strations may be blJme out as apt and may even be supplemented
hy .other like instances. A thing is bought loose for a price by, a
buyer on certai11 assumptions. But a securely packed or properly
sealed commodity sold by a well-known manufacturer is· ptlrchased by
the consumer based on a sort of flavoured considerations. The assessee's case is that here no cream in sealed containers as a unit with
an individuality is sold. On the other hand cream qua cream is bargained for and despatched. The canister is used because, ex necessilae
large quantities of cream cannot be transported over distances without being put in some container and its leakage and spoilage can be
prevented only by soldering or sealing. Hems sold in containers are
usually .so sold for two reasons : (i) for easy consumption by the
retail consumer who, by mere sight, is able to distinguish the particular patented brand, and picks it off the counter ; (ii) to prevent
adulteration or mixing wit.h spurious stuff. In the instant case the containers used are for bulk transmission--like tea chests-and sealing is
fgr preventing abuse on the way or pilferage. And soldering is a sure
mctho4. of sealing. Further, if the item were not a liquid like cream,
but a solid, it could be transported even in gunny bags-merely stitched and without any seal. If this view be sound, certainly the Benaras
cream dealer is out of the liability zone. We do not examine the impact <?11. taxability had the receptacles. been returned by the buyer
since it
1
~oes not arise on the evidence.
.
Shri Desai further drew our attention to the fact that the containers
had no particular design nor did they·bear any special marks. or ba_ve
a uniforin size.: Tbus:.the sealed container had np connection with
(' J; & l).T.C. 407 •.
·(') 21 S.T.C .. 63.
c
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I{
268
liliPREMli COURT i!.BPOllTS
[1975] SUPP·· $.C.R.
Athe bargain or the stuff sold. The emphasis was on the cream and the
container had no pertinence in the context. In this connection, he also
referred to s. 8 of the Act which refers to containers and packing ·
material. There is force in the argument, certainly. But, as earlier ·
indicated, judicial adventure
in interpretation-particularly ill taX
matters,-is sever!y circumscribed, Mr. De.sai posed the question whe- ·
B
ther sale in loose quantities and unsealed containers (in this very case,
cream also been sold in milk cans which were not sealed and had
been granted tax exemption) made any difference from similar salu
in old kerosene tins, the soldering being no sin which attached taX
guilt. Not that we are oblivious to the force of this argument, but
we are influenced by the words whose normal meaning should ordinarily
C guide interpretation. All that the notification states is that products
sold in sealed containers must sail out of the harbour of exemption.
The simple question is this : Was the sale, of cream? Yes. Was it,
when sold, packaged in containers which were sealed? Yes. On these
two affirmative answers the exclusion from the exemption operates.
Such is the contention put forward on bcljalf of the taxing authority
by Shri Satighi, learned counsel.
D
l n this connection, he drew our attention to Commissioner of
Sales Tax, U.P. (supra). Sikri, J. (as he then was), speaking for the
Court, considered a somewhat similar question of exemption where
sales-tax dealers in cooked food 'other than cooked food sold
in
sealed containers' were conferred exemption, on certain conditions.
E The commodity trere was confectionery sold in sealed containers
and the High Court upheld the assessee's case with these words :
F
G
"In commercial world in such trades, particularly where
food materials are concerned, it would be seen that the name
and reputation of the manufacturer by itself is a sufficient evidence or guarantee of the quality of the contents. The most
usual form or method for furnishing such evidence or guarantee of the quality and quantity of the contents is by way
of putting its seal by the manufacturer in order to secure the.
goods in the container in such manner that to have access
to the contents of the container the seal so put has to be destroyed or broken. For if it were not so done neither the retailer nor the purchaser would be sure whether the goods
inside the container as to their quality and quantity are the
same as represented and have not been otherwise adulterated .
or mixed up by extraneous elements is hardly necessary to
mention that a dealer carrying on the business of selling sweetmeats and coufectionery on· a comparatively smaller scale
would find it uneconomical commercially to put the stuff sold
or to be sold in sealed containers; it is only a large scale
manufacturer who manufactures and exports
the
confectionery, who would need selling the same in a container. In
our opinion, therefore, it is only that class of dealers carrying
on the business of sale of confectionery in sealed containers
as explained above who were not intended to be exempted
from the liability to pay sales tax on their turnover."
> •
.•
MARTAND DAIRY AND FARM v. UNION (Krishna Iyer, J.)
269
On appeal, this Court, after noticing ihe plausibility of the opposite
A
point of view and guessing the possible administrative and other
reasons for the exclusion from exemption, held :
i
"Be that as it may, in the context it is difficult to give
to the expression 'sealed container' a meaning different from
the ordinary dictionary meaning.~
B
"Sealed container" merely means a container which is "so closed
tliat access 'to the contents' is impossible without breaking the fastening". The expression 'seal' in this context does. not involve an
allixture of the seal of the seller such as impressing a signet in wax
etc., as evidence or guarantee of authenticity. An article may be
regarded as put in sealed containers if it is closed securely in any
v<ssel or container by any kind of fastening or covering that must be
broken before access can be obtained to what is packed inside. This
is the popular, perhaps the literal, meaning of the expressions used
in the notification.
Maybe the State thought that sealed containers
\Vi)uld be used only by big manufacturers. who were able to bear .. the
. burden of tax; maybe administrative convenience in assessing quanti~
ties sold induced this step. It is not for the Court to launch on obscure
fiscal astrology but merely to construe what has been expressed in
plain words. We should have been happier if the State had. furnished
the reasons prompting ihe exclusion from the exemption. An intelligent
appreciation of the reason of the rule is an aid to judicial construction
but the State has not been as alert on this score as we might have
wished. Why should a sale, if generally exempt from tax, being a milk
product, forfeit it merely because the wholesome step of sealing the
container and insulating the food article from contamination, is· taken
<luring transit ? But counsel for the State has expressed his inability
to throw light on this aspect or on the reasons for the policy. Had
;·he State's counter-affidavit been more illuminating on these questions,
it would have performed a service to this Court and to the public and
rendered the task of judicial construction simpler.
',\'itli these observations, we dismiss the appeals but there will
be no order as to costs in this Court.
P.B.R.
Appeal dismissed.
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