SARASWATI SUGAR MILLS v. HARYANA STATE BOARD AND ORS

Citation: [1991] SUPP. 1 S.C.R. 523

Court: Supreme Court of India

Bench: V. RAMASWAMI, A.M. AHMADI

Case summary

-A In this batch of civil appeals, writ petition and transferred case, a common question of law arises as to whether the industries which manufacture sugar from sugar cane are covered by Entry 15 of Schedule I to the Water (Prevention and Control of Pollution Cess Act, 1977...

Judgment text

SARASWATI SUGAR MILLS v. >· HARYANA STATE BOARD AND ORS. OC1'0BER 22, 1991 [A. M. AHMADI AND V. RAMASWAMI, JJ. ) Water (Preventio11 and Control of Pollution) Cess Act, 1977: Sections 2(c), 3 and Schedule I, Entry 15--'Processing of a11imal or vegetable product industry'-Sugar manufacturing i11dustry--Whetlier covered by Entry 15, Schedule I-Sugar Cane-Whether a Vegetable. Interpretation of Statutes: Co11stntctio11 of words and meaning to be given- Nom1al/y depends on the nature, scope and purpose of statute. Words and Phrases: "Vegetable", "Processi11g"-Meani11g of Section 3 of the Water (Prevention of Pollution and Control) Cess Act, 1977 provided that water cess was payable by every person carrying on any specified industry and every local authority, for the purposes of the Water (Prevention and Control of Pollution) Act, 1974. "Specified industry" was defined in the Act meaning any industry specified in Schedule I.

There were 15 items under Schedule I, including "processing of animal or vegetable products industry", under Entry 15. The question for consideration in the batch ofappeals, writ petitions and transferred cases arising out of the notices issued by the concerned assessing authorities demanding water cess from the sugar manufacturers was whether sugar manufacturing industry fell under Entry 15 ofSchedule I of the Water (Prevention and Control of Pollution) Cess Act, 1977. Disposing of the appeals, writ petitions and transferred cases, this Court, HELD: 1. In the context in which the word 'vegetable' is used in Entry 15, Schedule I of the \Yater (Prevention and Control of Pollution) Cess Act, 19771 'vegetable product' means product of or made ot' or out of vegetable. 'Vegetables' as understood in common parlance are not products <>f manufacture unless it is said that agriculture is an industry for certain purposes and vegetables are products ofthat industry.

In ord~r to bring an industry within any ofthe entries in Schedule I it bas to be seen what is the end product produced by that industry. Sugarcane is not a . B vegetable though it may be an agricultural product. Ifthe botanic meaning of vegetable as referring to any and every kind of plant life is to be given then some of the industries listed in Schedule I like Paper Industry and Textile Industry and even Chemical Industry which are covered by other entries could also be brought within Entry 15. The word 'vegetable' in the context does not attract the botanic meaning. The sugar manufacturing industry does not, therefore, come within Entry 15 of Schedule I of the Cess Act. Consequently, the manufacture of alcohol from molasses, which is a by product of manufacture of sugar, could not be considered to be an industry within Entry 15 ofSchedule I. [534 C-E, F] D . 2. 1 Tbe word 'vegetable' has been defined in many ways.

From the botanic point of view 'vegetable' may include any plant but in common parlance it is understood as referred to edible plants or parts of edible plants. Unless the botanical meaning is giveu to the word 'vegetable' it is not possible to conclude sugarcane as vegetable. [528 CJ 2. 2 Pollution Act may be a regulating Act, but Cess Act is a fiscal enactment. Therefore, the Court has to look merely at what is clearly said. There is no room for any intendment and no room for bringing within the provision of the Cess Act anything by implication. [533 E,F] )c- State of West Bengal & Ors. v. Washi A/11red Etc. AIR 1977 SC 1638; Member-Secretary, Andlzra Pradesh State Board for Prevention and Control . / ofWater Pollution v. Andhra Pradesh Rayons Ltd. and others, [1989) 1 SCC 44,M/s MotipurZamindary Co. (P) Ltd. v. The State ofBi/tar, (1962) Suppl. 1 SCR 498 and Rajastltan State Electricity Board v. 17ie Cess Appellate Committee & Anr. , JT 1990 4 SC 123, referred to.

World Book, Concise Oxford Dictionary, 3rd Ed. p. 1365, Webster's International Dictionary and Encyclopaedia Brittannica, Vol. 23, referred to. 2. 3 Construction of words and the meaning to be given for -such words shall normally depend on the nature, scope and purpose of the statute in which it is occurring and to the fitness of the matter to the SUGARMILLSv. SfATEBOARD[V. RAMASWAMI,J. ) 525 statute. The meaning given to . the same word occurring in a social security . >. measure or a regulating enactment may not be apposite or appropriate 1flien the same word is interpreted with reference to a taxing state. The Cess Act is a fiscal enactment. [534 BJ 3. 1. Processing of vegetable products industry is normally understood in the sense that it relates to processing of vegetables, which even after processing retain its character as vegetable. [530 H,531A] 3.

2 Processing as generally understood in marine, agricultural and food products industries is an action, operation or method of treatment applying it to something. It is refining, development, preparation or converting of material especially that in a raw state into marketable form. In manufacture something is brought into existence, which is different from that originally existed in the sense that the thing produced is by itself a commercially different commodity, whereas in the case of processing it is not necessary to produce a commercially different article. [531 C,D] j 3. 3 Processing essentially effectuates a change in form, cantour, physical appearance or chemical combination or otherwise by artificial or natural means and in its more complicated form involves progressive action in performing, producing or making something. [533 A,B] CST v. A. R. Aladin, AIR 1964 Guj. 27. Addi. CIT v. Farrukhabad Cold, Storage, [1977) 2 ITJ 202; Union ofIndia v.

Delhi Cloth and General Mills, AIR 1963 SC 79 and Com Products Refining Co. v. Federal Trade Commission, CCA. 7. 144 F. 2d 211, referred to. _CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4i. 89 of 1991 etc. etc. · From the Judgment and Order dated 25. 8. 1989 of the Punjab & Haryana High Court in Civil Writ Petition No. 2635of1989. Soli J. Sorabjee, Krishnamurthy Iyer, Bishamber Lal Khanna, H. K. Puri, Ms. Geetanjali Mohan, Ms. AK. Verma, P. R. Ramasesh, Mahabir Singh, R. Mohan and Ayyam Perumal for the appearing parties. The Judgment of the Court was deliv~red by V. RAMASWAMI, J. Leave granted in all Special Leave Petitions. -A In this batch of civil appeals, writ petition and transferred case, a common question of law arises as to whether the industries which manufacture sugar from sugar cane are covered by Entry 15 of Schedule I to the Water (Prevention and Control of Pollution Cess Act, 1977 (Central Act 36 of 19'n} (hereinafter caHed the 'Cess Act'). 0.

-iginally the Water (Prevention and Control of Pollution Act), 1974 (heremafter called the Act) was enacted by the Parliament under Article 252 of the Constitution with a view to control the pollution of rivers and streams which has assumed considerable importance and urgency in recent ~ years <as a result of increasing industrialisation and urbanisation. The Act is intended to ensure that the domestic and industrial affluence are not allowed to be discharged into water coarse. s without adequate treatment. This Act is now in force in almost all States and in all Union Territories. The Act provides for the constitution of a Central Bc;ard by the Central Govern. ment and State Boards by the State Governments concerned for the prevention and control of water pollution. There are also certain provisions relating to constitution of joint boards the details of which need not detain us. The Act sets out in detail the functions and power~ of these Boards.

Chapter V1 of the Act rnquires the Central Government and the State ~ Governments to provide funds to the Central Board and the State Boards respectively for implementing the provisions of the Act. The Cess Act 36 of 1977 provides for levy of cess on water consumed by persons carrying on certain industries and by the iocal authorities with a view to augment the resources of the Central Board and the State Boards constituted for the prevention and control of water pollution. Section 3 of the Cess Act which may be termed as the charging section states that "there shall be levied and collected <t cess for the purposes of the Water (Prevention and Control of ~ - Pollution) Act, 1974 and utilisation thereunder''. The cess is payable by every person carrying on any t.

pecified industry and every local authority and is calculated on the basis of water consumed by such person or local authority as the case may be for any of the purposes specified in column i of Schedule II to the Act, at such rate not exceeding the rates specified in the corresponding Entry in column II thereof as the Central Govt;rnment may by notification in the Official Gazette from time to timt:, specify. 1 "Specified industl) ' is defined in the Act as meaning any industry specified in Schedule I. There are 15 entries in Schedule I and they read as follows: SCHEDULE I '(See Section 2(c)) 1. Ferrous mf! tallurgical industry. SUGAR MILLS v. SfATE BOARD [ V. RAMASWAMI, J. ) 527 2. Non-ferrous mr. tallurgical industry. 3. Mining industry. 4. Ore processing industry. 5. Petroleum industry. 6. Petro-chemical industry. 7. Chemical industry. 8. Ceramic industry. 9. Cement industry. 10. Textile industry. 11. Paper industry. 12. Fertilizer industry. 13. Coal (including coke) industry. 14.

Power (thermal and diesel) generatir. g industry. 15. Processing of animal or vegetable products industry. The concerned assessing authorities have in all the cases under consideration issued notices demanding water cess from the sugar manufacturers on the ground tha. t this industry falls under item 15 "processing of animal or vegetable products industry". The. Punjab and Haryana High Court and the Allahabad High Court have taken the view that the sugar manufacturing industries would come within Entry 15 as "processing vegetable products industry". On the other hand the Andhra Pradesh High Court and Patna High Court have taken the view that sugar manufacturing industries would not come within Entry 15 of the 1st Schedule. A writ petition which was filed in the High Court of Karnataka, Bangalore, by one of the sugar mills in Karnataka raising similar question has been withdrawn to this Com t in transfer petition No.

276 of 1984 to be dealt with along with other appeals raising identical question. Similarly another writ peti~ion has been withdrawn from the Allahabad High Court in Transfer Petition No. 277 of 1984 to be dealt with along with this group of cases. The object of the Act is to control the water pollution and to ensure that industrial affluents are not allowed to be discharged into the water coarses without adequate treatment.. The Cess Act is not an enactment to regulate and control pollution but a fiscal measure to raise revenue for a~enting the resources of the Pollution Control Boards. The levy and oollection of cess provided under the Cess Act is on water consumed by persons carrying on the industries specified in the Schedule. The Cess is levied on the person carrying on the specified industry. The question is whether industries manufacturing sugar is covered by Entry 15 that is "processing of vegetable product·industry".

From the botanic point of view 'vegetable' may include any plant but in common parlance it is understood as referring to edible plants or parts of edible plants. The word 'vegetable' has been defmed in many ways. In the World Book it is defmed as follows: "In the usual sense, the word vegetable is applied to those !. plants whose leaves, stalks, roots or tubers are used for food, such as lettuce, asparagus, cabbage, beet and turnip. It also includes several plants whose fruits are the edible portions, as peas, beans, melons and tomatoes. " In the Concise Oxford Dictionary, 3rd Ed. p. 1365, it is defined as: "Plant, esp. herbaceous plant, used for culinary purposes or for feeding cattle, e. g. cabbage, potato, turnip bean. " Again in Webster's International Dictionary, vegetable is defmed as: "A plant used or cultivated for food for man or domestic animals, as the cabbage, turnip, potato, bean, dandelion, etc. , also the edible part of such a plant, as prepared for market or the table.

Vegetables and fruits are sometimes loosely distinguished by the used need of cooking -the former or the use of man, while the latter may be eaten raw; but the distinction often fails, as in the case of quinces, barberries, and other fruits, and_ lettuce, celery, and other vegetable. Tomatoes if cooked are vegetables, if eaten raw are fruit. " In the Encyclopaedie Britannica, vol. 23, 'vegetable' is defined as: "~ general term used as an adjective in referring to any kind of plant life or plant product, viz. 'vegetable matter'. More commonly and specifically, in common language, the word is used