Tamber, Ms. Arani Mukherjee, Mr.Vinay Singh Bist and Mr. Yashu Rustagi, Advocates v. M/S SHRIRAM COCONUT PRODUCTS

Judgment

1. At the outset, it is pertinent to note that the present appeal was dismissed in default for non-prosecution on 26.11.2025. 2. Having heard the learned Counsel for the applicant and in the interests of justice, we are inclined to allow the present application. 3. Accordingly, order dated 26.11.2025 is recalled and the appeal is restored to its original position. LPA 424/2014 4. Signature Not Verified This appeal is directed against judgment dated 03.09.2013 Digitally Signed By:AJIT KUMAR Signing Date:14.03.2026 20:48 LPA 424/2014 passed by a learned Single Judge of this Court, whereby the order dated 27.06.2005 passed by Respondent No. 2, i.e., Employees Provident Fund Appellate Tribunal1, was set aside.

5. The issue in controversy is short. We are only required to consider whether the activities of the respondent would fall within Schedule I to the Employees Provident Funds and Miscellaneous Provisions Act, 19522.

6. The present dispute emanates from a notice/letter dated

02.03.1998 issued by Appellant No. 1 to include Respondent No. 1 within the ambit of the EPF Act. This was contested by Respondent No. 1 on the ground that it was engaged in the activity of desiccating coconuts which did not fall under Schedule I of the Act. Consequently, an enquiry under Section 7A of the Act was initiated wherein it was held on 03.07.1998 that coconut was indeed a fruit and accordingly, Respondent No. 1 fell under Schedule I of the Act.

7. Being adversely affected, Respondent No. 1 applied for the review of the aforesaid order under Section 7B of the Act, which was also dismissed by the Assistant Provident Fund Commissioner in his order dated 22.01.2001. It was observed as under:

“5. There is no dispute that as per the new Webster dictionary the coconut is edible fruit. The process involved is dessication, Dessicate as per Webster dictionary means to dry up, to dry to remove moisture from the dehydrate etc. I have also gone through the book of accounts of the establishment wherein found that the final product is sold mostly to Biscuit companies and confectionaries. The product is packed in polywoven bags packed in card Signature Not Verified 1“EPFAT”, hereinafter 2“EPF Act”/ “Act”, hereinafter Digitally Signed By:AJIT KUMAR Signing Date:14.03.2026 20:48 LPA 424/2014 board bags. The removal of moisture from the coconut is to preserve the product for longer period. As such the department has covered M/s. Sri Ram Coconut Products Ltd. Batlagundu rightly under the Schedule head fruit & vegetable preservation industry. Now, therefore I, Suthanthiraraman, Assistant Provident Fund Commissioner, Madurai in exercise of the power conferred on under Section 7B order that the provisions of the Act are applicable w.e.f. 22,09.97 and accordingly M/s. Sri Ram Coconut Products Ltd. is required to report compliance w.e.f. 22.09.97.”

8. Resultingly, Respondent No. 1 preferred a statutory appeal before EPFAT, which came to be dismissed on 27.07.2005 holding that coconut is deemed as a fruit for the purposes of the EPF Act.

9. Aggrieved, Respondent No. 1 challenged this order before a learned Single Judge of this Court and on 03.09.2013, vide the impugned judgment, the order ofEPFATwas set aside on the ground that coconut is not to be construed as a fruit for the purposes of EPF Act.

10. By way of the impugned judgment, the learned Single Judge placed reliance on the judgment rendered by the Supreme Court in Shri Bharuch Coconut Trading Co. and Ors. v. The Municipal Corporation of the City of Ahmedabad3, specifically to the following passage therein: “5. In P.A. Thillai Chidambara Nadar v. Addl. Appellate Asstt. Commissioner, Madurai and Anr. [1985] 60 STC 80 this Court was to consider whether ripend coconut which is none other than watery coconut is an exempted article as vegetable under the Tamil Nadu General Sales Tax Act (1 of 1959). This Court held that fresh fruits and vegetables being household articles of everyday use for the table, these will have to be construed in the popular sense, meaning the sense in which every householder will understand them. Viewed from this angle, the most apposite test would be an answer to a simple question: Would a householder Signature Not Verified 3AIR 191 SC 494 Digitally Signed By:AJIT KUMAR Signing Date:14.03.2026 20:48 LPA 424/2014 when asked to bring home some 'fresh fruits' and some 'vegetables' for the evening meal, bring coconut too? Obviously the answer is in the negative. Accordingly this Court held that ripend coconut is neither a fresh fruit nor vegetable. The watery coconut is no doubt a ripend coconut used for several purposes like offerings to a deity in a Hindu temple being broken or used on auspicious occasions or used in preparation of the daily table food or in confectionary like biscuits or in the extraction of oil when it is fresh or dried kernel. When a person in the commercial market goes and asks for coconut no one will consider brown coconut to be vegetable or fresh fruit, much less a green fruit. No householder would purchase it as a fruit. No doubt in some English Dictionary, coconut is called a fruit or nut but it is to be understood in its ordinary commercial parlance. In Sri Krishna Coconut Co. v. Commercial Tax Officer, Amalapuram, [1965] 16 STC 511 the Andhra Pradesh High Court was to consider whether fully grown coconut with well developed kernel containing water i.e. watery coconut could be called tender or dried coconut. In that context considering the scope of an explanation to Schedule III of the A.P. General Sales Tax Act, 1957 which exempted tender coconut from the sales tax under the Act, it was held that in a tender coconut, the kernel is hardly formed or is only in the initial stages of formation. In a dried coconut the kernel has formed and fully developed and further the water inside the coconut has dried up leading to the drying of the kernel also. But a fully grown coconut with a well developed kernel, which contains, water cannot be called either a tender or a dried coconut. This is well-known that coconut is used for culinary purposes and on auspicious occasions and as part of the offerings in temples. It was held in that case that the watery coconuts are fully developed coconuts and they are exigible to sales tax. In KunchiRajeshwara Sastry &Sons and Anr. v. Asstt. Commnr. of Commercial Taxes, Kakinada, and Ors. [1976] 37 STC 399 the division Bench of the Andhra Pradesh High Court was to consider whether Copra is an oil-seed within the meaning of item (vi) of the list of declared goods mentioned in Section 14 of the Central Sales Tax Act, 1956, and whether it is eligible to sales tax under the Andhra Pradesh Sales Tax Act, 1957. In that context it was held that Copra is an oil-seed and it is a declared good within the meaning of Central Sales Tax Act, 1956. The watery coconuts are made liable to tax at the point of last purchase and that, therefore. Copra would be taxed till that period at the point of last purchase and the coconut of all varieties would include Copra also. Therefore, it is a declared goods. The Division Bench while considering whether Copra is an oil-seed held thus: Coconut is understood in several forms, namely, tender " coconut, watery coconut, dried coconut and Copra, and all these come under the expression coconut. Except in the case of tender coconut from which oil cannot be extracted, in all other cases, oil can be extracted and all of them are regarded in common parlance as oil- seeds. In Sri Lakshmi Coconut Industries v. The State of Karnataka and Anr. [1980] 46 STC 404 the Division Bench of the Karnataka High Court was to consider whether desiccated coconut falls within the entry coconut, which is one of the declared goods Under Section 14 of the Central Sales Tax Act, 1956 and is also included at entry 5 of the Fourth Schedule to the Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:14.03.2026 20:48 LPA 424/2014 Karnataka Sales Tax Act, 1957. In that context the meaning of the word oil- seeds was extensively examined by the Division Bench and held that desiccated coconut is a coconut and a declared good Under Section 14 of the Central Sales Tax Act, 1956, In Deputy Commissioner of Agrl. Income- tax and Sales-tax, Kerala v. A.P. Raman, [1960] 11 STC 263 the Kerala High Court also took the same view. In Commissioner of Sales-tax v. Ram Kumar Nand Kumar, [1973] 31 STC 321 the Allahabad High Court also held that coconut is an oil-seed within the definition of Section 3-AA(l)(vi) of the U.P. Sales Tax Act, 1948."

11. Following the extraction of the aforenoted passage from the decision in Bharuch (supra), the learned Single Judge holds thus: “5. In my opinion, the observations of the Supreme Court in the case ofShri Bharuch Coconut Trading Co. and Ors. (supra) that we must interpretexpression “coconut” and “fruit” in the layman’s language have to beapplied even with respect to interpreting the relevant entry in the EPF Actbecause when a person in the market goes and asks for coconut, no one will consider the brown coconut to be a vegetable or a fruit, and definitely not a green fruit. More importantly, the Supreme Court in the case of ShriBharuch Coconut Trading Co. And Ors. (supra) observed that nohouseholder would purchase the brown coconut as a fruit. Therefore, in my opinion, taken in the layman’s meaning, the dry brown coconut cannot be said to be a fruit and that meaning has to be taken for interpretation of the relevant entry of the EPF Act. The issue in this case is not free fromdifficulties because coconut is a natural product which is sold in differentforms and for different purposes, as stated above, however in my opinion, a dry brown coconut definitely is not a fruit as it is not so understood in common parlance and which meaning has to also apply for interpretation of the relevant entry in the EPF Act.” (emphasis supplied)

12. The learned Single Judge also noted the reliance placed by the appellant on the judgment of the Supreme Court in Maharashtra State Co-operative Bank Ltd. v. The Asst. Provident Fund Commissioner4 and opined that unless this decision provided that the entries in the EPF Act were to be given the widest meaning, it was of no avail to the appellant. Signature Not Verified 4(2009) 10 SCC 123 Digitally Signed By:AJIT KUMAR Signing Date:14.03.2026 20:48 LPA 424/2014

13. Aggrieved by the aforesaid judgment, the appellant approached this Court by way of the present appeal.

14. Admittedly, the respondents are engaged in desiccating coconuts. Desiccation indisputably refers to the dehydrating of coconuts so that the moisture is removed and they are rendered dry.

15. Thus, we are only required to consider whether the activities of the respondent i.e., desiccating coconuts, would fall under Schedule I of the EPF Act.

16. Mr. Brijesh Kumar Tamber, the learned Counsel for appellants, submits that the learned Single Judge, despite considering the dictionary meaning of coconut, erroneously applied its common parlance meaningfor the purposes of EPF Act. It is argued that coconut is a fruit and Respondent No. 1 is engaged in fruit preservation. Reliance is placed on the definition of coconut in the Coconut Development Board Act, 1979, Black‟s Law Dictionary and Oxford Dictionary. It is contended that Respondent No. 1 squarely falls under Schedule I of the Act under “(ix) any other unspecified item relating to the preservation or canning of fruits and vegetables.”

17. It is further contended that desiccation of coconut amounts to preservation since it extends the product‟s life. Further, thelearned Counsel vehemently stresses that the reliance on Bharuch (supra) by the learned Single Judge is erroneous,since the EPF Act cannot be construed strictly akin to a fiscal statute, as also held in A.V. Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:14.03.2026 20:48 LPA 424/2014 Fernandez v. State of Kerala5, but instead, purposive interpretation must be employed since it is a social welfare statute, as per Maharashtra State Co-operative Bank Ltd. (supra). Lastly, it is argued that Respondent No.1 was also dealing in coconut oil and coconut milk, which are separately included under Schedule I of the Act.

18. Per contra, Mr. Sanjay Gupta, on behalf of Respondent No.1, submits that the definition of coconut cannot be determined merely by the dictionary and must be understood from the perspective of a layman for the purposes of the EPF Act, as also followed in various decisions6. It is submitted that coconut is an oilseed and not a fruit or vegetable. By way of an example, it is argued that although cashew nut is a fruit in the dictionary sense, it is treated as a separate industry under Schedule I of the Act due to its use as a dry fruit; similarly, coconut is a separate industry which ought to have been mentioned separately. It is also submitted that desiccation does not amount to “preservation” under Schedule I.

19. The learned Counsel argues that the EPF Act does not apply to every industry and that one such exclusion is the coconut industry. It is stressed that the term “that is to say” in the relevant entry indicates an exhaustive list. It is submitted that the decision in Maharashtra State Co-operative Bank (supra) does not mandate the widest 51957 SCR 837 : AIR 1957 SC 657 6Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam vs M/s G.S. Pai & Co., (1980) 1 SCC 142; State of West Bengal & Ors. vs Washi Ahmed & Ors., (1977) 2 SCC 246; Motipur Zamindary Co. (Private) Ltd. vs State of Bihar, AIR 1962 SC 660; Porritts& Spencer (Asia) Ltd. vs State of Haryana, (1979) 1 SCC 82; M/s Shiva Traders, Bhilai vs Divisional Dy. Commissioner of Commercial Tax, Durg, 2017 SCC OnLineChh 620 Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:14.03.2026 20:48 LPA 424/2014 possible interpretation of the Schedule I Entries, disregarding the common parlance meaning. Reliance is placed on Sri Ram Saha v. State of W.B.7to contend that purposive interpretation only applies in cases of ambiguity and any alternate construction must be within the statute. It is argued that the clauses under the “fruit and vegetable preservation industry” Entry are starkly distinct and that the residual clause is to be read in accordance with the principle of ejusdem generis.

20. Having heard the learned Counsels for both parties, this Court is conscious that the scope in an LPA is correctional in nature and the appellate court would intervene only if the judgment rendered by the learned Single Judge suffers from any patent error.8

21. It is admitted by both parties that as per various authoritative dictionaries, coconut is a fruit. However, what remains contentious is whether this interpretation is to be adopted for the purposes of the EPF Act so as to include Respondent No. 1 within its ambit.

22. As per Black‟s Law Dictionary, „fruit‟ is defined as “the produce of a tree or plant which contains the seed or is used for food. The edible reproductive body of a seed plant. The effect or consequence of an act or operation”. According to Cambridge Dictionary, „desiccate‟ is “to remove the moisture from something so it becomes completely dry; to lose all moisture and become completely dry” and „preservation‟ refers to “the act of keeping something the Signature Not Verified