1. This is a reference under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958. (hereinafter called the Act), at the Instance of the assessee, M/s. S.R. Calcuttawala, Indore. The questions, which the Sales Tax Tribunal has placed before us for decision, are--
'(1) Is P. V. C. rexine cloth leather-cloth?
(2) Is P. V. C. rexine cloth exempted from the payment of sales tax under Item (6) of Schedule I of the M. P. General Sales Tax Act, 1958?
(3) Is the sale of P. V. C. Rexine cloth taxable under Item (88) of Schedule II of the M. P. General Sales Tax Act. 1958?
(4) Is the sale of P. V. C. rexine cloth taxable under Item (1) of Part VI of Schedule II of the M. P. General Sales Tax Act, 1958? and
(5) Is the sale of P. V. C rexine cloth exempted from the payment of sales tax under Notification No. 2765-2264-VST dated 12-12-1960 of the Separate Revenue Department of the Government of Madhya Pradesh?'
2. The assessee. M/s. S. R. Calcuttawala is a dealer engaged in the business of sale of P. V. C. Rexine cloth. In the assessment proceedings for the period from 1st April 1960 to 31st March 1961 the assessee claimed that the sale transactions of Rexine cloth were exempt from any sales tax under the Act. The Sales Tax Officer rejected this claim for exemption, and levied Sales Tax at the rate of even per cent under Item-38 of Schedule II to the Act on the sales of Rexine cloth by the assessee. The assessee unsuccessfully appealed first before the Appellate Assistant Commissioner of Sales Tax, and then before the Board of Revenue functioning as the Sales Tax Tribunal.
3. Item-38 of Schedule II, which was relied on by the taxing authorities for making an assessment of sales tax, at the rate of seven per cent. on the sales of Rexine cloth is as follows--
'Leather cloth, rubber cloth, oil-cloth, waterproof cloth and linoleum, tarpaulin and goods made thereof excepting sport goods'.
The Sales Tax Officer. The Appellate Assistant Commissioner and the Tribunal, all look the view that Rexine was 'leather cloth' and as such subject to sales tax at the rate of seven per cent by virtue of Item-38 of Schedule-II.
The assessee based its claim for exemption on Item-6 of Schedule I to the Act which enumerates the articles which have been exempted from sales lax under Section 10 of the Act. Item-6 is in the following words--
'All varieties of cloth manufactured in mills or on powerlooms or handlooms including processed cloth but excluding pure silk cloth'
It also relied, in the alternative, on a notification issued by the Government on 12th December 1960 in exercise of its powers under Section 12 of the Act. This Section provides that--
'The State Government may subject to such restrictions and conditions as may be specified, by notification, exempt in whole or in part any class of dealers or any goods or class of goods from the payment of tax under this Act for such period as may be specified in the notification'
The notification issued on 12th December 1960 under Section 12 of the Act ran thus--
'In exercise of the powers, conferred by Section 12 of the Madhya Pradesb General Sales Tax Act, 1958 (No. 2 of 1959), and in partial modification of this Department Notification No. 738-3694 V-SR., dated 1-4-1959, the State Government hereby exempts with effect from the 1st April, 1959 to 31st March, 1961, in whole, all varieties of canvas cloth, water-proof cloth, tarpaulins and similar products, manufactured with cloth as base in textile mills, power-loom factories or processing factories from the payment of sales lax when sold by a dealer, registered under the said Act.'
The Tribunal rejected the assessee's claim for exemption holding that Rexine was not 'cloth' only; that it was an article with cloth as a base and a coating or coatings thereupon of Polyvinyl Chloride: and that this 'finished product' known as 'P.V.C. Rexine cloth' was not any variety of cloth manufactured or 'processed ' in mills or on powerlooms or handlooms and, therefore, did not fall under Item-6 of Schedule I. In regard to the claim for exemption resting on the notification dated the 12th December 1960, the Sales Tax Tribunal formed the view that the said notification did not apply as Rexine cloth was 'leather-cloth' falling under Item-38 of Schedule II; that the notification only exempted certain goods which were subject to tax under Item-38: that the notification, while exempting from tax canvas cloth, water-proof cloth and tarpaulins, made no reference whatsoever to leather-cloth; and that thus the notification did not exempt P. V. C. Rexine cloth, which was nothing but leather-cloth.
4. It must first be stated that it is common ground that P. V. C. Rexine cloth sold by the assessee is an article with cloth as base which coating or coatings of Polyvinyl Chloride are applied in processing factories by special spreading machines. The finished product resembles leather, and is known in trade circles as 'artificial leather' or 'leather cloth'. In various dictionaries the meaning given to the word 'rexine' is 'trade name for a kind of artificial leather used in upholstery etc.'. As rexine is leather cloth, it is clearly subject to sales tax as leather cloth at the rate of seven per cent under Item-38 of Schedule II. The description of Rexine given earlier is plain enough to show that it is not pure and simple cloth, manufactured in 'mills or on powerlooms or handlooms', or any cloth subjected to treatment, that is, 'processed' in mills or on powerlooms or handlooms. That being so, the claim that P. V. C. Rexine is exempt from tax under Item-6 of Schedule-I to the Act cannot be accepted.
5. The assessee's claim for exemption based on the notification dated the 12th December 1960 must, however, be accepted. The language of the notification is wide enough to include P. V. C. Rexine. The notification exempts not only all varieties of canvas cloth, waterproof cloth and tarpaulins, but also 'similar products manufactured with cloth as base in textitle mills, powerloom factories or processing factories'. The expression 'all varieties' widens the scope of the categories of canvas-cloth, waterproof cloth and trapaulins specified in the notification. The expression 'similar products manufactured with cloth as base in textile mills, powerloom factories or processing factories' further widens the scope of exemption. In holding that as leather-cloth had not been specified in the notification, Rexine, which was leather-cloth, could not be exempted under the notification, the Sales Tax Tribunal altogether missed the significance of the words 'similar products.'
The word 'similar' means 'bearing a resemblance to, or possessing some of the characteristics of'. It does not mean 'the same' or 'identical'. There are varying degrees of similarity. One extreme is the exact likeness or complete sameness. The other extreme is any quality of likeness, even though there may be other unlike qualities. If this meaning of the word 'similar' is borne in mind, then it is clear that P. V. C. Rexine, which is manufactured with cloth as base and given coating or coatings of Polyvinyl Chloride in processing factories, falls within the expression 'similar products'. Rexine is a varity of cloth. There is cloth in it, as there is in can vas cloth or waterproof cloth or tarpaulins. Again, it is also waterproof like waterproof cloth or tarpaulins.
6. It was suggested by the learned Government Advocate, appearing for the Commissioner of Sales Tax, that the expression 'similar products' must be construed to have a meaning ejusdem generis and confined to things of the same kind as those specified in the notification. In our opinion, the rule of ejusdem generis cannot be applied here as the specific words used in the notification, namely, 'canvas cloth, water-proof cloth, tarpaulins' do not form a distinct genus or category. The specified things in the notification belong to different categories. 'Canvas cloth', 'waterproof cloth', 'tarpaulins', are all different categories of cloth.
It is well settled that for the applicability of the rule of ejusdem generis, the enumerated things before the general words must constitute a category or a genus; it is requisite that there must be a distinct genus, which must comprise more than one species (see State of Bombay v. All Gulshan, AIR l955 SC 810 at p. 812 and Kochuni v. States of Madras and Kerala AIR 1960 SC 1080 at p. 1103). If the specified things preceding general words belong to different categories, the rule of efusdem generis cannot be applied (see Indramani v. W.R. Natu, AIR 1963 SC 274 at p. 281 and Hamdard Dawakhana v. Union of India, AIR 1965 SC 1167 at p. 1172).
7. For the foregoing reasons, our answerto the first question is that P. V. C. Rexinecloth is leathercloth. The answer to the secondquestion is in the negative. Our answer tothe third and fifth questions is that the saleof P. V. C. Rexine cloth is exempt from payment of sales tax under the notification datedthe 12th December 1960, and that if it had notbeen so exempted, then the sale would havebeen taxable under Item-38 of Schedule IIto the M. P General Sales Tax Act, 1958. Ouranswer to the fourth question is in the negative. The assessee shall have costs of thisreference. Counsel's fee is fixed at Rs. 150/-.