H.R. Khanna, J.@mdashThe short question, which arises for determination in these two writ petitions Nos. 620-D and 688-D of 1966, filed by
the Delhi Cloth and General Mills Company Limited, Delhi and the Ganesh Flour Mills Company Limited, Delhi, respectively, is whether terminal
tax on the import of groundnut oil and other edible vegetable oils within the limits of the Municipal Corporation of Delhi is payable in accordance
with the rates specified in entry No. 3 or those specified in entry No. 16 of Class I of the Tenth Schedule of the Delhi Municipal Corporation Act,
1957 (66 of 1957)(hereinafter referred to as the Act).
2. The Respondents in Civil Writ No. 620-D are the Municipal Corporation of Delhi and the Union of India, while those in Civil Writ No. 688-D
are the Commissioner, Municipal Corporation, Delhi and the Union of India. The two Petitioner-Companies are engaged in the manufacture of
Vanaspati (hydrogenated vegetable) ghee in Delhi and for that purpose import raw, unprocessed and unrefined groundnut oil, til oil and sunflower
oil from all over India. According to Sub-section (1) of Section 178 of the Act, on and from the date of the establishment of the Corporation, there
shall be levied on all goods carried by railway or road into the Union territory of Delhi from any place outside thereof, a terminal tax at the rates
specified in the Tenth Schedule. Class I of the Tenth Schedule deals with the rates of terminal tax on articles of food and drink. Entries Nos. 3 and
16 of Class I read as under:
Articles Terminal Tax
payable per maund
of gross weight
except where
otherwise stated
1 * * * Rs.
2 * * * *
3 Ghee including 1.75
vegetable ghee,
and admixtures of
ghee also
vegetable solidified
oil, dripping,
marvo, trex,
cocogold, purice,
crisce and
cocogem.
* * * *
16 Animal fat, tallow 0.29
and oil of all kinds
except oils
mentioned in class
III, v. and IX
3. Before 22nd July, 1966, terminal tax on the import of groundnut oil and other vegetable oils within the limits of Municipal Corporation, Delhi,
was charged in accordance with the rates mentioned in entry No. 16, i.e., Re. 0.29 paise per maund and with effect from 1st April, 1965, at Re.
1.00 per quintal. On 22nd July. 1966 the Commissioner of Municipal Corporation issued instructions to the terminal tax collection staff that
terminal tax on the import of groundnut oil and similar other vegetable oils be charged at the rate of Rs. 485 paise per quintal in accordance with
entry No. 3 and not at the rate of Re. 1.00 per quintal, the rate mentioned in entry No. 16. The Petitioners have challenged the levy of terminal tax
on the import of groundnut oil and other vegetable oils at the rate of Rs. 4.85 per quintal instead of Re 1.00 per quintal and according to them
groundnut oil and other vegetables oils are covered by entry No. 16 and not entry No. 3. As against that, the case set up on behalf of Respondent
No. 1 in both the petitions is that groundnut oil and other oils mentioned in the aforesaid instructions are admixtures of ghee and fall under entry
No. 3, reproduced above. The Commissioner of Municipal Corporation, it is stated, in issuing the impugned instructions only corrected the error
or mistake which had occurred in the past.
4. From the resume of facts given above, it is clear that the first question which arises for determination is whether groundnut oil is an admixture of
ghee as mentioned in entry No. 3. The process of the preparation of vegetable ghee has been given in the two cases of Tungabhadra Industries
Ltd. Vs. The Commercial Tax Officer, Kurnool, and Union of India (UOI) Vs. Delhi Cloth and General Mills, . It is, however, not necessary to
reproduce that Drocess. For the nurpose of the present case it is sufficient to state that it is the common case of both the parties that groundnut oil
is the principal constituent and ingredient out of which vegetable ghee is prepared. According to the Shorter Oxford English Dictionary, Third
Edition, Volume I, the word ""admixture"" means ""1. The action of mingling as an ingredient; the fact of berg so mingled. 2. That which is mixed with
anything; an alloy."" Accepting the above meaning of the word ""admixture"", groundnut oil, in our opinion, cannot be said to be an admixture of ghee
or vegetable ghee though it may be the chief ingredient for the preparation of vegetable ghee. When the Legislature used the word admixtures of
ghee'' in entry No. 3, it meant, in our view, anything which was mixed with ghee or vegetable ghee and not something which was used as the
principal ingredient for the preparation of ghee. It is significant that entry No. 4 in Class I of the Tenth Schedule deals with butter and cream and
provides the rate of terminal tax for those articles of food. Had the word ""admixture"" been used in the ppnse of being the principal component or
ingredient of ghee entry No. 4 would be superfluous and otiose because butter and cream would, according to the contention advanced on behalf
of the Respondents, be already provided for in entry No. 3. Entry No. 4 thus lends colour to the contention advanced on behalf of the Petitioners
that the word ""admixture"" in entry No. 3 has not been used to denote the principal component for the preparation of ghee and vegetable ghee.
5. Although arguments have been addressed to us in the two petitions mainly in respect of groundnut oil, it is not disputed that so far as other edible
or vegetable oils mentioned in direction dated 22nd July, 1966, of the Commissioner of Municipal Corporation are concerned, the same decision
would govern them. So far as the words ""vegetable solidified oil"" mentioned in entry No. 3 are concerned, in our view they refer to vegetable oil
which has assumed the solid form through some process of human agency as distinguished from oils which have assumed that form on account of
drop in temperature by weather.
6. The matter can also be looked at from another angle. According to entry No. 16 terminal tax on import of oils of all kinds except oils mentioned
in Classes III, V and IX is payable at the rate mentioned in that entry. Class III deals with the articles used for fuel, lighting and washing. Class V
relates to drugs, spices and perfumes, while Class IX pertains to miscellaneous articles. Plain reading of entry No. 16 shows that it is of a
comprehensive nature and deals with oils of all kinds except oils mentioned in Classes III, V and IX. Had it been the intention of the Legislature to
exclude edible vegetable oil such as groundnut oil which forms the principal component for the preparation of vegetable ghee from the ambit of
entry No. 16, there was nothing to prevent it from making an exemption in that entry in espect of groundnut oil and other edible vegetable oils also
along with oils in Classes III. V and IX. If ground-nut oil and other similar edible oils were intended to be covered by entry No. 3, entry No. 16
would have read ""animal fat, tallow and oil of all kinds except oils mentioned in entry No. 3 of Class I and in Classes III, V and IX."" The fact that
Legislature neither gave specific exemption to groundnut oil and other similar edible oils nor added the underlined (italicised herein) words in entry
No. 16, in our view, clearly goes to show that terminal tax on groundnut oil and similar ether edible oils was intended to be paid in accordance with
entry No. 16 and not in accordance with entry No. 3.
7. Reliance on behalf of the Respondents has been placed upon the affidavits of Shri Sudhamoy Roy and Dr. Sadgopal according to whom the
groundnut oil and other similar vegetable oils fall under entry No. 3 and not under entry No. 16. This, however, is essentially a matter which is for
the Court to decide by reference to the relevant provisions. F on consideration of those provisions the Court comes to the view that groundnut oil
and other similar edible oils are covered by entry No. 16 and not entry No. 3, its decision would not be affected by the above-mentioned expert
opinion.
8. Reference has been made on behalf of the Respondents to entry No. A. 17 of Appendix ''B'' of the Prevention of Food Adulteration Rules,
1955, which deals with twelve types of edible oils and it has been argued that such of the edible oils as are used for the preparation of vegetable
ghee fall in entry No. 3 of Class I referred to above, while the other edible oils fall in entry No. 16. We, however, find no basis in the different
entries in the Tenth Schedule of the Act to warrant such a distinction. Apart from that, we are of the view that the different entries in the Tenth
Schedule of the Act have to be construed on perusal of the relevant provisions of that Act and not by reference to the entries in Appendix ''B'' of
the Prevention of Food. Adulteration Rules.
9. It is not disputed that the groundnut oil is also used for the purpose of preparing toilet articles. The groundnut oil imported for the preparation of
toilet articles can hardly be called an admixture of ghee, yet, according to the submission made on behalf of the Respondents, it would be taxed as
such. It is also obvious that the Municipal Terminal Tax authorities cannot determine the purpose for which the groundnut oil imported in Delhi is
ultimately going to be used, for the levy of terminal tax depends upon the nature of article and not the ultimate purpose for which it is to be used.
10. Lastly, it has also been argued on behalf of the Respondents that it is primarily for the Municipal Authorities to determine as to whether the
import of groundnut oil and similar other vegetable oils is covered by entry No. 3 or by entry No. 16, referred to above and that Court can only
interfere if the view taken by the Municipal authorities is manifestly unreasonable. Reference in this connection has been made to A.V.
Venkateswaran, Collector of Customs, Bombay Vs. Ramchand Sobhraj Wadhwani and Another, and The Collector of Customs, Madras Vs. K.
Ganga Setty, . The above-mentioned two authorities cannot be of much avail to the Respondents, because the direction issued by the
Commissioner of Municipal Corporation for charging terminal tax in accordance with the rates mentioned in entry No. 3 and not entry No. 16, in
our view, is manifestly erroneous and clearly unreasonable.
11. We, there tore, allow the petitions with costs and quash the direction dated 22nd July, 1966 of the Commissioner of Municipal Corporation
for the levy of terminal tax on groundnut oil and other vegetable oils at the rate of Rs 4.85 paise instead of Rs 1.00 per quintal.
