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PETITIONER:

STATE OF U.P. & OTHERS

Vs.

RESPONDENT:

M/S. INDIAN HUME PIPE CO. LTD.

DATE OF JUDGMENT03/03/1977

BENCH:

FAZALALI, SYED MURTAZA

BENCH:

FAZALALI, SYED MURTAZA

BHAGWATI, P.N.

CITATION:

1977 AIR 1132 1977 SCR (3) 120

1977 SCC (2) 724

CITATOR INFO :

R 1980 SC 611 (4)

ACT:

Constitution of India--Article 136--Practice of Supreme

Court--Interference with discretionary orders of High

Court--Article 226--Whether High Court should

interfere--Alternative remedies.

Interpretation--Articles used for business

purposes--Whether in commercial sense--U.P. Sales Tax

Act--Meaning of sanitary fittings.

HEADNOTE:

The respondent manufactures and sells hume pipes and

high quality and high pressure pipes. The pipes are rein-

forced concrete pipes. The U.P. Government issued a noti-

fication under the U.P. Sales Tax Act providing that "sani-

tary fittings" were to be taxed at 7 per cent instead of 2

per cent. The Saks Tax Officer treated hume pipes supplies

by the respondent as sanitary fittings and imposed sales tax

@ 7 per cent. The respondent filed a writ petition in the

High Court assailing the order of the Sales Tax Officer on

the ground that the hume pipes manufactured by the assessee

could not by. any stretch of imagination he construed to be

sanitary fittings nor were they ever used as such. The High

Court after perusing the materials on record and hearing

counsel accepted the plea of the respondent and held that

the hume pipes could not be treated as sanitary fittings.

The High Court accordingly quashed the assessment made by

the Sales Tax Officer. The respondent also filed certifi-

cates of Local Self Government Engineering Department, U.P.

to show that the pipes supplied by the respondent were

not used as sanitary fittings. The said certificate has

been signed by the Executive Engineer on behalf of the'

Chief Engineer of the department.

In an appeal by certificate the appellant

contended:

(1) High Court should not have entertained

the writ petition and should have allowed the

assessee to avail of the remedies provided to

him under the U.P. Sales Tax Act particularly

when question of fact had to be determined.

(2) On merits the conclusion of the High

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Court that hume pipes are nOt sanitary fit-

tings is erroneous, Dismissing the appeal by

certificate.

Held:(1) The Court negatived the contention of the

appellant that the High Court ought not to have entertained

the writ petition and should have allowed the assessee to

avail of the remedies provided to him under the U.P. Sales

Tax Act. In the present case, whether the hume pipes

manufactured and sold by the respondent were sanitary fir-

ings was a question of law and since the entire material on

the basis of which this question could be determined was

placed before the Sales Tax Officer and had pointed in one

and only one direction, namely, that the hume pipes were not

sanitary fittings and there was nothing to show otherwise,

the High Court was justified in entertaining the writ

petition. There is no rule of law that the High Court

should not entertain a writ petition where an alternative

remedy is available to a party. It is always a matter of

discretion and if the discretion has not been exercised by

the High Court unreasonably or perversely, it is the settled

practice of this Court not to interfere with the exercise

of discretion by the High Court. In these circumstances

this Court would not be justified in the interest of justice

to interfere under Article 136 of the Constitution to quash

the order of the High Court merely on that ground after

having found that the order was legally correct. [124

B-E]

(2) It is well-settled that in construcing the articles

used for business purposes the terms must be interpreted in

a purely commercial sense. [123 B-C]

121

Ramavatar Budhaiprasad etc. v. Assistant Sales Tax

Officer, Akola (1962) 1 SCR 279, 282, followed.

The King v. Planters Nut and Chocolate Company Ltd.,

(1951) Canada L.R.. Ex. Court 122. 126 approved.

So construed by sanitary fittings one only understands

such pipes or materials as are used in lavatories, urinals

or bath rooms of private houses or public buildings. In

the present case there was absolutely no material before the

Sales Tax Officer to show that any of the hume pipes manu-

factured and sold by the respondent were meant for use in

lavatories. urinals or bath rooms and. in fact. the material

was used entirely the other way. the Sales Tax Officer was

not at all justified in holding that they were sanitary

fittings [123 F-H]

(3) The Sales Tax Officer does not appear to have ap-

plied his mind at all to the reasons as to how and why hume

pipes could be treated as sanitary fittings. The re-

spondent had filed an application before the Sales

Tax Officer wherein he had clearly alleged substantial facts

showing that the hume pipes could never be used as sanitary

fittings; that it is only the G.I.P. Pipes or other kinds of

pipes which are used in lavatories, urinals and bath rooms

which could be termed as sanitary fittings. The respondent

had placed a large catena of materials in the shape of

certificates from technical experts, engineers and highly

reputed dealers in sanitary fittings that hume pipes are

never used as sanitary fittings. Even where a hume pipe is

used for carrying the escrated material from the Commode to

the Sceptic tank that may be treated as sanitary fittings.

The appellant in his counter affidavit before the High Court

did not controvert any of the facts mentioned by the re-

spondent, The State produced no material to controvert the

facts. [122 D-G--123A]

(4) The Court observed that if at any time the material

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produced before the Sales Tax Authorities establishes that

in a given case hume pipes were meant to be used in the

bath rooms, urinals and lavatories etc., then the notifica-

tion of the Government would be attracted. [124 A-B]

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 784 of 1972.

(From the Judgment and Order dated 29-9-1970 of the Allaha-

bad High Court in Civil Misc. Writ No. 1111/70).

S.C. Manchanda and O.P. Rana, for the appellants.

S.V. Gupte, S.V. Vaidya, K. Rajendra Chaudhary and Mrs.

Veena Devi Khanna, for the respondent.

The Judgment of the Court. was delivered by

FAZAL ALI, J. This appeal by certificate raises a short

question of law as to whether or not hume pipes which are

the subject-matter of the. present case amount to "sanitary

fittings" as contemplated by a notification issued by the

Government under the U.P. Sales Tax Act. The respondent is a

dealer engaged in the manufacture and supply of hume pipes.

The pipes manufactured by the respondent are reinforced with

cement concrete pipes and the respondent also manufactures

high quality and high pressure pipes like prestressed

concrete pipes for water supply, R.C.C. pressure pipes,

penstock pipes used in hydroelectric projects etc. The

respondent was a supplier of pipes to various Governmental

Departments both Central and State, such as Irrigation,

Public Works, Local Self Government Engineering, Railways

and Ministry of Petroleum etc. It appears that a dispute

arose between the respondent and the Sales Tax Department

with respect to the

122

rate of tax for sale a-pipes manufactured by the respondent

for the assessment years 1962-63, 1963-64 and 1964-65,

According to the notification issued by. the Government in

pursuance of the U.P. Sales Tax Act, items classed as

"sanitary fittings" were to be taxed at 7% instead of 2 %.

The Sales Tax Officer treated the hume pipes supplied by the

respondent as "sanitary fittings" and imposed sales tax at

the rate of 7 %. Instead of going in appeal to the Assist-

ant Commissioner (Judicial) the respondent filed a writ

petition in the High Court assailing the order of the Sales

Tax Officer on the ground that the hume pipes manufactured

by the assessee could not, by any stretch of imagination, be

construed to be "sanitary fittings", nor were they ever used

as such. The High Court, after hearing counsel for the

parties and after perusing the materials on the record,

accepted the plea of the respondent and held that the hume

pipes could not be treated as "sanitary fittings" and the

Sales Tax Officer was., therefore, not entitled to levy tax

at the rate of 7%. The High Court accordingly quashed the

assessments made by the Sales Tax Officer and hence this

appeal by the Department after obtaining a certificate. from

the High Court.

In our opinion, the facts of this appeal lie within

a very narrow compass. The only point which arises for.

consideration is whether or not the hume pipes manufactured

by the respondent could be said to be "sanitary fittings".

The notification dated September 1, 1966 amended the

existing entry as "sanitary goods and fittings" but in these

assessment years-we are concerned with the entry as it

stood unamended. The Sales Tax Officer does not appear to

have applied his mind at all to the reasons as to how and

why hume pipes could be treated as sanitary fittings..

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Apart from his ipsi dixit that hume pipes amounted to sani-

tary fittings, he based his order on no other material. The

respondent had filed an application before the Sales Tax

Officer wherein he had clearly alleged substantial facts

showing that the hume pipes could never be used as "sanitary

fittings"; It is only the G.I. pipes or other kinds of

pipes which are used in lavatories, urinals and bath-rooms

which can be termed as 'sanitary fittings". Neither the con-

tract nor the tender by the respondent show the exact use

for which the hume pipes were meant. On the other hand the

respondent had produced a large catena of materials in the

shape of certificates from technical experts, Engineers and

highly reputed dealers in sanitary fittings to show that

hume pipes are never used as sanitary fittings. In spite of

these materials, the State, when it filed its counter-affi-

davit before the High Court, did not controvert any of the

facts mentioned by the respondent, vide paragraphs 4, 5 and

6 of the counter-affidavit filed before the High Court. The

materials consist of certificates by Local Self Government

Engineering Department, U.P., to show that the pipes sup-

plied by the respondent were not used as "sanitary fit-

tings". This certificate appears at p. 34 of the Paper Book

and shows that R.C.C.Pipes purchased from the respondent had

not been used as sanitary fittings by the L.S.G.E. Depart-

ment. This certificate is signed by the Executive Engi-

neer: on behalf of the Chief Engineer of the Department.

From pp. 36-39 and 41 of the Paper Book appear the certifi-

cates given by certain reputed dealers in sanitary goods and

fittings, who have categorically certified that the hume

pipes are never

123

recognised as sanitary-wares or sanitary fittings. As

against this, the State produced no materials to controvert

these facts, which could not be brushed aside. At p. 40

there is a certificate by the Ex. Special Engineer, Bombay

Municipal Corporation and Ex. Director, Central Public

Health Engineering Research Institute, Nagpur, in which he

has clearly observed that sanitary-wares and sanitary fit-

tings are applicable to fittings used in the household for

W.Cs. wash-basins, traps, sinks etc. and, therefore, hume

and R.C.C. pipes cannot be recognised as sanitary-wares or,

sanitary fittings. As against this, the State produced no

material to controvert these facts.

It is well settled that when we are dealing with the

articles used for business purposes, the terms must be

interpreted in a purely commercial sense. In Ramavatar

Budhaiprasad etc. v. Assistant Sales Tax Officer, Akola(1)

this Court, while construing the import of the word "vegeta-

bles", observed as follows:

"But this word must be construed not in

any technical sense nor from the botanical

point of view but as understood in common

parlance. It has not been defined in the Act

and being a word of every day use it must be

construed in its popular sense meaning "that

sense which people conversant with the subject

matter with which the statute is dealing

would attribute to it." It is to be construed

as understood in common language;"

To the same effect is a decision of the Exchequer Court of

Canada in The King. v. Planters Nut and Chocolate Company

Limited(2) where the Court observed as follows:

"The words "fruit" and "vegetable" are

not defined in the Act and so far as 'I am

aware they are not defined in any other Act in

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pari material. They are ordinary words in

every-day use and are therefore to be con-

strued according to their popular sense".

In these circumstances, therefore, we have to construe

the expression "sanitary fittings" in the popular sense of

the term as it is used in our every-day life. Thus constru-

ing, it would be manifest that there could be no question of

use of R.C.C. or hume pipes which are generally laid

underground and are extremely heavy. for the purpose of use

in lavatories, urinals or bath-rooms etc. By "sanitary

fittings" we only understand such pipes or materials as are

used in lavatories, urinals or bath-rooms of private houses

or public buildings. Even where a hume pipe is used for

carrying, the secreted material from the commode to the

septic tank that may be treated as sanitary fittings. In

the instant case as there was. absolutely no material before

the Sales Tax Officer to show that any of the hume pipes

manufactured and sold by the respondent were meant for use

in lavatories, urinals or bath-rooms and in fact the materi-

al was used entirely the other way, the Sales Tax Officer

was not at all justified in holding that they were sanitary

fittings.

(1) [1962] 1 S.C.R. 279, 282.

(2) (1951) Canada L.R. Ex. Court 122 126

124

Of course, we must make it clear that if at any time the

material produced before the Sales Tax authorities estab-

lishes that in a given case the hume pipes were meant for

use in a bathroom, lavatory, urinal etc.. then the. notifi-

cation of the Government would attracted and the assessee

must be liable to be taxed at the rate of 7%.

Lastly, it was feebly argued by Mr. Manchanda that the

High Court ought not to have entertained the writ petition

and should have allowed the assessee to avail of the reme-

dies provided to him under the U.P. Sales. Tax Act, particu-

larly when questions of fact had to be determined. In the

instant case, the question as to what is the true connota-

tion of the words "sanitary fittings" and whether the hume

pipes manufactured and sold by the respondent were sanitary

fittings within the meaning of that expression was a ques-

tion of law and since the entire material on the basis of

which this question could be determined was placed before

the Sales Tax Officer and it pointed in one and only one

direction, namely, that the hume pipes were not sanitary

fittings and there Was nothing to show otherwise, the High

Court was justified in entertaining the writ petition.

Moreover, there is no rule of law that the High Court should

not entertain. a writ petition where an alternative remedy

is available to a party. It is always a matter of discretion

with the Court and if the discretion has been exercised by

the High Court not unreasonably, or perversely, it is the

settled practice of this Court not to interfere with the

exercise of discretion by the nigh Court. The High Court

in the present case entertained the writ petition and decid-

ed the question of law arising in it and in our opinion

rightly. In these circumstances, therefore, we would not be

justified in the interest of justice in interfering in our

jurisdiction under Art. 136 of the Constitution to quash

the order of the High Court merely on this ground after

having found that the order is legally correct. We are,

therefore, unable to accept this contention.

For these reasons. therefore, we find ourselves in

complete agreement with the view taken by the High Court and

affirm the same. The result is that the appeal fails and is

accordingly dismissed with costs.

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P.H.P. Appeal dismissed.

125