1. To start with, we may state the relevant facts which have given rise to a group of reference cases. The applicant, M/s. Vadodara Jilla Hybrid Utpadkoni Sahakari Mandali Limited, is a co-operative society registered under the Co-operative Societies Act, 1961, and is also registered as a dealer under section 29(1) of the Gujarat Sales Tax Act, 1969, hereinafter referred to as 'the said Act'. The applicant carries on business to resell cotton-seeds, fertilisers, cloth bags, etc., at Vadodara.
2. During the period of account from 30th March, 1974, to 31st October, 1974, the applicant had, inter alia, sold empty cloth bags to its members at a nominal price (which was less than Rs. 10 per bag) and had recovered Rs. 2,55,812 as sale price of those empty cloth bags.
3. The cloth bags which were sold by the applicant-society to its members contained a printed matter thereon to the effect that they contained certified seeds, Hybrid-4, Shanker-4, District Baroda, 1975. They further contained the year of the preparation and a statement that there was a coat given of a poisonous chemical, etc., for the benefit of its purchasing members. The purchasing members had purchased those cloth bags for the purpose of selling hybrid agricultural seeds therein.
4. While assessing the applicant to tax in respect of the above period of account under the said Act, the learned Sales Tax Officer treated the sale of cloth bags as covered by entry 51 of Schedule I to the said Act, implying thereby that the sales of cloth bags were exempt from sales tax. The Sales Tax Officer, therefore, did not levy any tax on those sales. The order of the Sales Tax Officer is to be found at annexure 3 to the statement of the case. This is an undisputed fact, namely, that the Sales Tax Officer treated the sale of cloth bags as covered by entry 51 of Schedule I to the said Act.
5. The learned Assistant Commissioner of Sales Tax, however, took a different view of the matter and exercised his suo motu powers under section 67 of the said Act. He was of the opinion that the cloth bags were not meant for domestic or personal use of its purchasing members but were meant for commercial purpose or use. He was further of the opinion that entry 51 of Schedule I to the said Act merely covered articles meant for domestic or personal use but was not meant for articles of commercial use and that therefore the applicant's sales of the disputed cloth bags were not sales of tax-free goods covered by entry 51 of Schedule I to the said Act. In his view, the sales of cloth bags would be covered by the residuary entry, being entry 13 of Schedule III to the said Act. Consequently, he revised the order of the Sales Tax Officer and held that the applicant's sales of cloth bags worth Rs. 2,55,812 were covered under residuary goods under entry 13 of Schedule III to the said Act and accordingly levied tax thereon.
6. The applicant, being aggrieved by the order of the learned Assistant Commissioner of Sales Tax, filed Revision Application No. 52 of 1978 before the Gujarat Sales Tax Tribunal. The Tribunal, for the reasons given in its order, concurred with the finding of the learned Assistant Commissioner and endorsed the impugned orders of the learned Assistant Commissioner holding that the aforesaid articles, namely, cloth bags were covered by residuary entry 13 of Schedule III to the said Act and were therefore liable to the levy of tax accordingly.
7. Being further aggrieved by this order of the Tribunal, the applicant sought a reference which the Tribunal allowed and referred to us the following common question of law :
'Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the applicant's sales of disputed cloth bags were not sales of articles covered by entry 51 of Schedule I to the Gujarat Sales Tax Act, 1969, and that, therefore, were not exempt from the levy of any tax as alleged, but that they were sales of goods covered by residuary entry 13 of Schedule III to the said Act, and that they were liable to the levy of tax accordingly ?'
8. The view of the learned Tribunal in effect and substance was that so far as entry 51 of Schedule I to the said Act is concerned, the words 'ready-made garments' are followed by the subsequent expression 'articles', which is a generic expression and that therefore any articles in order to fall within that entry should be of the nature of ready-made garments, that is to say, articles which are normally meant for use for a domestic or a personal or a private purpose and not for a commercial purpose and since the cloth bags were not meant for such domestic or personal use but were meant for commercial use, they would not fall within entry 51 of Schedule I to the said Act and were therefore not exempt from tax. In giving this interpretation to entry 51 of Schedule I to the said Act, it applied the principle of ejusdem generis. The Tribunal relied upon the two decisions, New City Printing Press v. State of Gujarat in Appeal No. 4 of 1974, and Vijay Buff Corporation v. State of Gujarat in Appeal No. 3 of 1966, in order to fortify the conclusion which it had reached for interpreting entry 51 of Schedule I to the said Act. Mr. S. L. Modi, the learned Advocate for the applicant-assessee, had appeared before the Tribunal also and he submitted before the Tribunal that it was a cardinal canon of construction of a statute that the words in the statute must be given their literal, grammatical and natural sense and that the other rules of interpretation are required to be considered only in cases when it is not possible to give a literal, grammatical or natural sense to the words employed in the statute. It was submitted by him before the Tribunal that in this case the words used in entry 51 of Schedule I to the Act are unambiguous, clear and capable of being interpreted in a literal, grammatical and natural sense, and the effect of giving a plain interpretation to the words employed in the entry would be to cover the cloth bags within the concerned entry. It was also pointed out by Mr. Modi that entry 51 of Schedule I to the said Act was preceded by a relevant entry, being entry 42 of Schedule A to the Bombay Sales Tax Act, 1959, wherein the relevant words were 'ready-made garments and other articles...prepared from cotton...fabrics'. Later on, when entry 51 of Schedule I to the said Act was enacted, the word 'other' was dropped and the relevant entry runs as under :
'Ready-made garments and articles (excluding hosiery goods and garments and articles to which entry 35 of this schedule applies) prepared from any textile or handloom fabrics including those which have been embroidered or otherwise decorated sold at a price not exceeding ten rupees per article or suit.'
9. Mr. Modi argued that the omission of the word 'other' in the said entry 51 of Schedule I to the said Act indicated the intention of the legislature that the words were to be used as such without being at all coloured or affected by the preceding words 'ready-made garments.' Mr. Modi also submitted that the principle of ejusdem generis was not at all attracted in the present case. The Tribunal negatived all these arguments of Mr. Modi. The Tribunal also in its judgment stated that the rule of ejusdem generis was founded upon the idea that if the legislature had intended the general words to be used in an unrestricted sense, the particular or restrictive words would not have been mentioned. When general words were used following the use of particular words, the general words would be limited by the application of the rule of interpretation, namely, ejusdem generis. During the course of its judgment, the Tribunal cited a passage from Maxwell on the Interpretation of Statutes as under :
'But the general word which follows particular and specific words of the same nature as itself takes its meaning from them and is presumed to be restricted to the same genus as those words. In other words, it is to be read as comprehending only things of the same kind as those designed by them, unless, of course, there be something to show that a wider sense was intended as, for instance, a proviso specifically excepting certain classes clearly not with the suggested genus.'
10. The passage from Maxwell is reproduced here as taken by the Tribunal in its judgment. We have reproduced this passage here because we are of the view, as we shall show later, that the passage from Maxwell does not help the interpretation put on by the Tribunal. The Tribunal further observed that 'this is a case where the words '.....articles......prepared from any textile or handloom fabrics.....' are general words which are preceded by special or particular words 'ready-made garments' and, therefore, those subsequent words of general import would take their colour or meaning from the preceding special or restrictive words'. The Tribunal further observed in its judgment that on account of the proximity of the said special words in entry 51 of Schedule I to the said Act, it was justified in ignoring the omission of the word 'other' and in applying the principle of ejusdem generis while interpreting the above entry. In the result, even though the disputed cloth bags were articles made out of the relevant fabrics and therefore they would fall within the scope and ambit of the above words contained in entry 51 of Schedule I to the said Act, the shame entry was held inapplicable to the present gods, the cloth bags, as the general words had to be given a restrictive application in the light of the special words 'ready-made garments' which had preceded the general words. The Tribunal read the general words, namely, 'articles', as being confined to only those articles prepared out of the relevant fabrics which were meant for domestic and personal use and not for commercial use. According to the Tribunal, the disputed bags were prima facie and obviously for commercial use and not for domestic and personal use and therefore they would not fall under entry 51 of Schedule I to the said Act.
11. After hearing Mr. S. L. Modi, the learned Advocate for the applicant, and Mr. R. P. Bhatt, for the revenue, we are of the view that the interpretation given to entry 51 of Schedule I to the said Act by the Tribunal is incorrect and not justified under the facts and circumstances of the present case.
12. If we were to closely peruse the observations from Maxwell on the Interpretation of Statutes on which the Tribunal has relied for its conclusion, it is at once found that this observation is misconstrued by the Tribunal. It is stated that, 'but the general word which follows particular and specific words of the same nature as itself takes its meaning from them and is presumed to be restricted to the same genus as those words'. The general word which follows the particular and specific words must be of the same nature, that is to say, such as itself takes its meaning from the particular and specific words which have preceded it. The generic words, in other words, though generic, partake of the nature of the particular and specific words which have preceded it. It is then that the principle of ejusdem generis is found applicable. In the instant case, the specific or the words of narrower import are 'ready-made garments' and the general word which is used is 'articles'. It cannot be said that the word 'articles' partakes of the nature of the ready-made garments, or that the word 'articles' belongs to the same genus to which the words 'ready-made garments' belong. In our opinion, therefore, there is no room for applying the principle of ejusdem generis. Even otherwise, we agree that the submissions made before us by Mr. Modi that in the relevant entry the words which are used are clear and unambiguous and if we give the literal, grammatical and natural interpretation to the entry, there is no scope for giving an artificially restricted meaning to the word 'articles'. In other words, if we were to interpret the word 'articles' as partaking of the nature of ready-made garments, we would be required to read the relevant entry as under :
'Ready-made garments and such other articles as necessary for the use of ready-made garments......'
13. We find it impossible to add words in the concerned entry, and in our opinion, to do so would mean a flagrant violation of the canons of interpretation of a statute. With respect, the Tribunal had no basis whatever to interpret the concerned entry by applying the rule of ejusdem generis which has the result of giving a new meaning and import to the words used therein. It is to be pertinently noticed while closely perusing the concerned entry that after the use of the generic word 'articles', the legislature had excluded from the meaning of the term 'articles' hosiery goods and garments and articles to which entry 35 of this Schedule applies. The denotation of the word 'articles' is thus specified and what was intended to be excluded has been in express terms clarified. The Tribunal, with respect, has overlook this aspect of the interpretation, namely, that if after the employment of the general word, a special exception has been carved out by the legislature, then there is no scope left for further restricting the denotation of the general word.
14. In this connection, we might note the following two observations from Maxwell on the Interpretation of Statutes (1969 Edition, page 299) :
'Unless there is a genus or class or category, there is no room for any application of the ejusdem generis doctrine. Plate, linen and chattels in the premises, including the coach-house and stables, do not make up a category excluding horses. Nor do the words 'theatres and other places of public entertainment' create a genus.'
15. The second observation (at page 299) is also quoted below as it provides a useful angle to decide whether the rule of interpretation - ejusdem generis - is attracted or not :
'In a modern Privy Council case, it has been said that there must be more than one species mentioned to constitute a genus : 'The mention of a single species - for example, water rates - does not constitute a genus.''
16. It is observed however that 'the authority for this is very slight, and there are many instances of the rule being applied to two-word phrases.'
17. The following observation from Bindra's Interpretation of Statutes (Fifth Edition, 1970, page 245) makes the scope for applicability of the doctrine clear :
'In order to attract the doctrine it may safely be said to be necessary that - (1) the statute contains an enumeration of specific words which constitute a class or genus; (2) the said class or genus is not exhausted by the enumeration; (3) the general words follow the specific words; (4) the legislative intention is not clearly mainfest in favour of according broader meaning to the general words.'
18. It would, therefore, be clear that in the facts and circumstances of the case, the rule of ejusdem generis is misapplied.
19. The Tribunal, with respect, has also overlooked to take into account an accepted rule of construction that when two interpretations are reasonably possible, the one in favour of the assessee must be accepted. Even assuming that the word 'articles' is required to be given a restricted meaning which would partake of the nature of ready-made garments, the other interpretation is equally reasonably possible, namely, that the word 'articles' can be given its natural meaning, confined only to the limits that they must be prepared from any textile or handloom fabrics and that their price must not exceed 10 rupees per article or suit. Subject to those expressed limits, the word 'articles' must be given its plain meaning and any interpretative delimitation of the general word 'articles' would be unjustifiable to the prejudice of the assessee.
20. In our opinion, considering the matter from different angles, the Tribunal was not justified in giving a restricted application to the general word used in the concerned entry, namely, 'articles'.
21. In the result, our decision on the question of law referred to us is that under the facts and circumstances of the present case, the Tribunal was not right in law in holding that the applicant's sales of disputed cloth bags were not sales of articles covered by entry 51 of Schedule I to the Gujarat Sales Tax Act, 1969. Our finding accordingly is in favour of the assessee and against the revenue. Under the circumstances of the case, there shall be no order as to costs.
22. Reference answered accordingly.