Rajasthan Value Added Tax, 2003:
Schedule IV Entry 56 – ‘Gypsum Board’ – Whether would fall within Entry 56 of Schedule IV and be taxed at 4% for the relevant assessment years i.e. 2006-07 and 2007-08 or would fall under the residuary Entry 1 of Schedule V – Held: Original Entry 56 was expanded by legislature from ‘Gypsum’ to ‘Gypsum in all its forms’ – Addition of expression ‘in all its forms’ to the expression ‘Gypsum’ , should be construed to include different forms of gypsum and not just gypsum in its original form – Therefore, amended Entry 56 of Schedule IV would include ‘Gypsum Board’ under the term ‘all its forms’ – Interpretation of Statutes – Notification No.F.12(63)FD/Tax/2005-19, dated 19.4.2006 – Notification No. S.O.36. No.F.12(59)FD/Tax/2014-14 dated 14.7.2014.
Dismissing the appeals, the Court
HELD: 1. The amended Entry 56 of Schedule IV of Rajasthan Value Added Tax Act, 2003 (RVAT), read as ‘gypsum in all its forms’, would include ‘gypsum board’ under the term ‘all its forms’. A meaning has to be given to the Entry made by the legislature, expanding the original Entry from ‘gypsum’ to ‘gypsum in all its forms’. If the object was to include only ‘gypsum’, then why would the Entry be changed to‘gypsum in all its forms’? The corollary would also be as to what is meant by ‘in all its forms’, as it is not, as if mere geometrical alteration of a shape would form part of the Entry. In such a situation, the original Entry itself was comprehensive enough to have included it. [Paras
13 and 14][142-B-D]
2. In the present case, there is really no chemical change which occurs in the substance as dehydration only reduces the water content and thereafter, it is mixed with additives for the purpose of increasing bonding and other related purposes. Substantively, the character of ‘gypsum’ is not changed in the mechanical exercise of converting it into a board along with, of course, certain chemical processes of heating and mixing, to achieve an ultimate objective. [Para 14][142-E-F]
3. ‘Words must be construed with some imagination of the purposes which lie behind them’. Therefore, the expression ‘in all forms’ being added to ‘gypsum’ should be construed to naturally include not only just gypsum in its original form but in different forms as well. [Para 16][142-H; 143-A]
4. The manufacturing process of gypsum board would show that the initial steps are of only crushing and grinding the gypsum whereafter it is heated and partially dehydrated, which in turn is called ‘stucco’ or ‘Plaster of Paris’. There does not appear to be any doubt that such ‘stucco’ would form part of the Entry ‘in all its forms’. The unique characteristic of stucco, when mixed with water, is that the smooth plastic mass so formed can be molded into the desired shape, which obtains its rock-like state on hardening. This very characteristic is stated to be used in the development and production of gypsum board. In the second step of the manufacturing process, stucco is mixed with a number of additives in an excess amount of water to prepare a slurry, to be ultimately converted back into a dehydrated form, before being cut into desired sizes. Not only that, ‘gypsum board’ is defined as real gypsum between two paper sheets. That take away from the description of gypsum. Even if the sheets are added, the wide description ‘in all its forms’ would certainly include ‘gypsum board’. [Para 17][143-B-D]
5. In fact, gypsum board, devoid of its top and bottom boards, can be utilized, with some processing, in a similar manner as gypsum. When the meaning of the word ‘form’ is meant to include ‘visible shape or configuration of something’, there is no reason why gypsum board would not form a part of the expanded terminology ’in all its forms’. [Para 18]
6. In terms of notification No.S.O.36.No.F.12(59)FD/Tax/2014-14 dated 14th July, 2014, the RVAT was amended to include, in Schedule V, a separate Entry under item No.19(viii) ‘gypsum board and other false ceiling material’. Thus, the legislature by a conscious decision in 2014, sought to create a separate Entry for gypsum board, which was not the case in respect of the assessment years in question. This belies the endeavor to include gypsum board in the residuary Entry, before such specific inclusion as then, there would have been no need for such an Entry. The obvious attempt is to exclude it from ‘gypsum in all its forms’ in Schedule IV of the Act (RVAT) and create a separate Entry in Schedule V, whereafter it would naturally be governed by the tax rate applicable to the Entry in question.[Para 21][144D-F] Commissioner of Sales Tax, Mumbai v. India Gypsum Ltd. (2009) 25 VST 210 (Bom.); The States of Gujarat v. Sakarwala Brothers (1967) 19 STC 24 (SC);Trutuf Safety Glass Industries v. Commissioner of Sales Tax, U.P. (2007) 7 SCC 242 : [2007] 8 SCR 860;
Tungabhadra Industries Ltd v. Commercial Tax Officer, Kurnool [1961] 2 SCR 14; State of Jharkhand and Ors v. LA Opala R.G. Ltd. (2014) 15 SCC 136; Rajasthan Roller Flour Mills Assn v. State of Rajasthan (1994) Supp. 1 SCC 413 : [1993] 2 Suppl. SCR 72; Alladi Venkateswarlu & Ors. v. Govt. of Andhra Pradesh & Ors. (1978) 2 SCC 552 : [1978] 2 SCR 190 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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