R. Jayasimha Babu, J.
1. Petitioners in W.P. Nos. 7299, 7300 to 7303 of 2000 Scientific Compounds and Process Pvt. Ltd., manufacture and market under the brand name "Sabena" a powder which contains a detergent Alkyl Benzene sulphonic Acid to the extent of 2.01 per cent of the products 8.03 per cent moisture and volatile matters and 82.69 per cent matter insoluble in water. The additives added to the detergent are mainly abrasives. They are water insoluble such as talc, silica feldspar, chalk, quartz and sand. This mixture is sold in powder form and is used primarily for cleansing utensils. It is a cleansing material. This product is hand made.
2. The other four petitioners, viz. M/s. Ecof Detergents (P) Ltd., M/s. Vivid Detergents (P) Ltd., M/s. Sabena Detergents (P) Ltd. and M/s. Alpha Detergents (P) Ltd., are all licensees who also manufacture the same product and market the same. All of them are the first sellers of the product.
3. Scientific Compounds and Process Private Limited, commenced manufacturing this product prior to 1965. The product manufactured by it being taxable it was taxed originally under entry 37 of the Schedule to the Tamil Nadu General Sales Tax Act. That entry till July 1, 1967 read as soaps. Subsequently though there were changes in the description of the items covered by entry 37 between July 1, 1967 and April 1, 1999, this product was, till the assessment year 1991-92 for a period of over 25 years brought to tax only under entry 37. It is necessary to notice the change in the description in entry 37 in this period. From the time of enactment till July 1, 1967, the entry was "soaps". From July 1, 1967 to August 1, 1968 it reads as "All kinds of soaps and soap powder including metal polishing bar". From August 1, 1968 to February 20, 1974 the entry was "All kinds of soaps, soap flakes, soap powders, detergent powders and liquids and metal polishing bars". From February 20, 1974 to July 25, 1977 the entry was "All kinds of soaps (excluding hand-made soaps), soap flakes, soap powders, detergent powders and liquids and metal polishing bars". From July 25, 1977 till December 30, 1987, the entry was "All kinds of soaps (excluding hand-made soaps), soap flakes, soap powders, detergent powders and liquids". From December 30, 1987 to March 25, 1989, the entry was "All kinds of soap (excluding hand-made soaps) soap flakes, soap powder, detergent powders and liquids". From March 25, 1989 to March 12, 1993 the entry was in two parts, 37(a) reading "All kinds of soaps (excluding hand-made soaps), soap flakes, soap powders, detergent powders and liquids" and 37(b) reading, "All kinds of handmade soaps, soap flakes, soap powders, detergent powders and liquids". From March 12, 1993 soaps and detergents were shifted to item 22 of Part E and hand-made varieties shifted to entry 18 of Part B. Item 22 of Part E read thus,
(i) Toilet soaps of all kinds including medicated soaps, liquid soaps and moisturised soaps, but excluding hand-made soaps and shampoos.
(ii) Washing soaps of all kinds including floor washing soaps, soap flakes, soap powders, soap liquids and detergents in all forms, excluding hand-made items of these goods.
Item 18 of Part B read thus,
"Handmade soaps of all kinds (both bathing and washing soap) including soap flakes, soap powders, soap liquids and detergents but excluding shampoos and metal polishes in any form."
4. From April 1, 1999 hand-made soaps were shifted to item 30. That item is in three parts, 30(i) reading as "Hand-made soaps of all kinds (both bathing and washing soap) including soap flakes, soap powders, liquids and detergents but excluding shampoos and metal polishers in any form". 30(ii) reads as, "Hair and body cleaning powder containing sikakai, boonthikottai, illuppai oil cake, poolankizhangu, usilai leaves, kasturi manjal and any such ingredients or two or more such ingredients". 30(iii) reads as, "scouring powder or cleaning powder other than those specified in item 22 of Part E of this Schedule".
5. The words "detergent powders and liquids" are thus found in item 37 from August 1, 1968 till March 12, 1993. From March 12, 1993 to April 1, 1999 the word "detergent" is found without specifying powders and liquids. Metal polishing bars were included in entry 37, from August 1, 1968 to July 25, 1977. Metal polishers were specifically mentioned as having been excluded from March 12, 1993 onwards.
6. Even before the word "detergent" was used in the entry, the powder manufactured by the assessee being undisputedly a powder used for cleansing, was regarded as "soap" by the assessing authorities and, after the word "detergent" came to be included in the entry, was regarded as detergent powder "continuously from August 1, 1968 till 1991 for a period of twenty three years. In this period the Commissioner has also issued clarifications instructing his subordinates to assess the product manufactured by the assessee as a detergent powder". It was only in the year 1993 that the Commissioner, for the first time, took the stand that the cleansing powder manufactured by the assessee is not a soap or detergent and that it has to be taxed under section 3(1) of the Act and later under the residuary entry.
7. The provisions referred to by the Commissioner are the residuary provisions which bring to tax, goods which are not covered by any of the specific entries in the Schedule. The rate of tax for entries for goods falling under the residuary entry which was eight per cent earlier was raised to eleven per cent with effect from March 12, 1993. The rate at which the goods falling within the residuary entry were being taxed prior to that date was 8 per cent from 1990 to 1993 at the point of sale. Prior to 1990, it was leviable as a multi point tax at the rate of two per cent prior to 1965, 2.5 per cent from 1965 to 1967, 3 per cent from July 1, 1967 to June 18, 1971, 3.5 per cent from June 19, 1971 to August 14, 1974, 4 per cent from August 15, 1974 to February 28, 1982 and 5 per cent from March 1, 1982 to April 1, 1990.
8. The tax leviable for items falling under entry 37 was 5 per cent till December 1, 1965, 5.5 per cent till February 21, 1978, 6 per cent from February 21, 1978 to March 25, 1989, from March 25, 1989 to September 5, 1991 the rate was 8 per cent on machine made products and 6 per cent on the hand-made products. From September 5, 1991 to March 12, 1993 the rate was 10 per cent on the machine made products and 4 per cent on the hand-made products.
9. The only reason given in the order made on September 28, 1993 for departing from the earlier view is that the product manufactured by the assessee is just a cleaning powder and is not a soap or detergent. This now stand was completely at variance with what the State itself had understood to be the scope of entry 37 for twenty five years. Throughout that period the State had regarded this cleaning powder as one which would fall within the scope of the word "soap" initially and later within the scope of the word "detergent powder". The common feature of the soaps and detergents being their use as cleansing agents, the State had apparently regarded this powder manufactured by the assessee which is a cleaning powder as one properly falling within the scope of that entry. There was no change in the mode of manufacture or in the ingredients used by the assessee. The words used in the entry "soaps and detergents" continued to be there prior to and after 1993. The entry did not exclude in specific terms "the scouring powders" from the scope of "detergent powders". When the entry was modified on March 12, 1993, while retaining the words "soaps and detergents", "the shampoos and metal polishes" were specifically mentioned in that entry as having been excluded. The scouring powders, however, were first mentioned only on and from April 1, 1999 in entry 30 (iii).
10. The circumstances in which the residuary entry can be invoked are well-settled. The Supreme Court in the case of Bharat Forge and Press Industries (P) Ltd. v. Collector of Central Excise (1990) 45 ELT 525 a case which arose under the Excises and Salt Act, 1944 has observed thus, "The question before us is whether the Department is right in claiming that the items in question are dutiable under tariff entry No. 68. This, as mentioned already, is the residuary entry and only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry. In other words, unless the department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item".
11. Applying the tests so formulated by the apex Court, it is clear, on the facts of this case, that it cannot be stated that the cleansing powder manufactured by the assessee which is used primarily for cleaning utensils cannot, by any conceivable process of reasoning be brought under entry 37, more particularly the word "detergent" thereunder when the Revenue itself has for over a quarter of a century regarded the cleansing properties of this powder which includes a detergent as rendering it a cleaning powder, which by virtue of that function is required to be regarded as a "detergent" powder.
12. The State itself, did not, in all this period go by the technical meaning assigned to the word "detergent" by the chemists, nor did it, at any time, prescribe any specific percentage of detergent to be present in the powder along with other additives, before it could be treated as a "detergent". The revenue considered it to be sufficient that certain quantity of synthetic substance, to which we have already referred and which is admittedly a detergent, was present in the composition of this powder and that the powder with the additives is used for the purpose of cleaning surfaces. The fact that this cleansing powder is not used for washing clothes or the body did not come in the way of the State regarding this powder as a detergent. The powder manufactured by the assessee has been regarded by the State as capable of being brought within the ambit of the word detergent used in this entry on account of the presence of a detergent-though in small quantity, and its use as a cleansing powder, although the composition of the powder includes materials which are not detergents, and a chemist would not regard this powder as a detergent.
13. If a term used in an entry is capable of very wide meaning being assigned to it and such wider meaning has been given to it by the authorities responsible for the enforcement of that statute, and the assessee has also subjected itself to the levy of tax by concurring in that view of the revenue, it cannot be said that the meaning assigned to it by the revenue and accepted by the assessee is inconceivable by any process of reasoning.
14. The word detergent is itself a term of relatively recent origin. It is noted in the "The New Encyclopaedia Britannica-volume 16 that,
"The first synthetic detergents for general use were produced during the period of World War I so that available fats could be utilised for other purposes. In the early 1920s and early 30s, molecules consisting of long chain alcohols were sulfonated and sold as the neutralized sodium salts without any further additions except for sodium sulfate as an extender. Synthetic detergents subsequently evolved into not only a substitute for soap but became a product in many ways superior to soap."
Synthetic detergents, it is noted in this Encyclopaedia.
".....are generally unaffected or very little affected by metal salts or acids ; although they may react chemically with them the resulting compounds are either soluble or remain dispersed in colloidal form in the solution. Other useful properties of the synthetics such as solubility in cold water and flexibility in formulation..."
The same Encyclopaedia also refers to various materials which are added to detergents to obtain specific characteristics. Such materials are optical brighteners, water softeners and abrasives. Abrasives are water-insoluble minerals. Examples of such water-insoluble minerals given thereunder in that Encyclopaedia are talc diatomaceous earth, silica, marble, volcanic ash, (pumice), chalk, feldspar, quartz and sand. These abrasives, it is mentioned, are often powdered and added to soap or synthetic detergent formulations.
15. It is thus clear that while detergents are synthetic formulations and are water soluble, the use of such detergents with additives is well known. The addition of abrasives to the detergent is capable of being regarded as coming within the broad head of "detergent" in a taxing entry, when that word is used in the entry along with other cleansing agents such as soaps, and as noticed earlier even metal bars. The common feature of these goods is their ability to clean surfaces. When the nature of the surface to be cleaned is not specified in the entry, there is no warrant for assuming that the soaps and detergents mentioned in the entry must be capable of use for cleaning human skin or cleaning fabrics. Including within the entry metal bar is indicative of the intent to make that entry applicable to things which are used for cleaning surfaces as cleansing agents. The broad view of the revenue for over a quarter century that the word detergent used in entry 37 took within its fold the cleansing powder manufactured by the assessee which admittedly contains a detergent, but has abrasives added to it, was, therefore a view which could not be branded as inconceivable or wholly unreasonable.
16. Once it is found that the goods sought to be taxed are indeed capable of being brought under a specific entry, the question of resorting to the residuary entry does not arise.
17. Even after 1993 the legislative intent to make entry 37 applicable to cleansing agents of all kinds of soaps and detergents has not undergone any change. The very fact that it was considered necessary to exclude shampoos and metal polishers is indicative of the breadth of that entry. The Legislature apparently thought that it was necessary to exclude shampoo and metal polishers as otherwise it would fall within the ambit of that entry. Having regard to the manner in which the entry has been understood over a long period of time, and the fact that the word, "detergent" is indeed capable of being applied to powder which contain detergent and abrasives and are used for cleansing utensils, having regard to the scheme of the entry 37, even though, a chemist may not apply the word "detergent" to the powder manufactured by the assessee, we must hold that the levy of tax on the assessee by treating its product as one falling within the residuary entry was not legally permissible. The proper entry under which it was required to be taxed was entry 37, up to March 12, 1993 and thereafter till April 1, 1999 under entry 18 of Part B.
18. The Tribunal has not adverted to the factors to which we have adverted. It has merely gone by what it regarded as the popular meaning of the word "detergent". Even when considering that popular meaning as they viewed it, they have ignored the view of the revenue itself for over a quarter century.
19. Words which are not part of the vocabulary of the average consumer of the goods in question, should be approached with greater degree of caution while trying to ascertain its popular meaning. While chemists are familiar with the term detergent and know its properties, it cannot be said that the word "detergent" is a part of the common man's vocabulary. The products used for cleansing are sought by the average consumer by their brand name or by specifying the purpose for which the goods are required. The average consumer will not ask the shopkeeper simply for a detergent. The Revenue's own understanding of the scope of this term, therefore, becomes all the more important and it's consistent view for a quarter of a century disentitles the Government from now contending that the popular meaning of the term is such as to exclude from within the scope of detergent, the powder containing a detergent manufactured by the assessee. The writ petitions are allowed.