Skip to content


Textool Company Limited Vs. the State of Madras and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case Number Writ Petition Nos. 860 and 861 of 1965
Judge
Reported in[1968]21STC232(Mad)
AppellantTextool Company Limited
RespondentThe State of Madras and anr.
Appellant Advocate K. Rajah Ayyar, Adv.
Respondent Advocate The Special Government Pleader and ; M. Gunasekharan, Adv.
DispositionPetition allowed
Cases ReferredMadras v. State of Madras Since
Excerpt:
- - these inclusive items cover items which are clearly electrical goods. 7. on the same principle, it appears to me that the word 'machinery' after the amendment of entry 41 would take its sense and scope from the term 'electrical goods' that precedes it and the several items like fans and other goods, the use of which cannot be had without the use of electricity which follow it, and therefore, the same requirement of machinery being electrical goods as laid down in willam jacks case1 will continue to apply even after the amendment......the amendment and as it stands afrer the amendment. before amendment it read :all electrical goods, instruments, apparatus, appliances and all such articles, the use of which cannot be had except with the application of electrical energy, including fans, lighting bulbs, electrical earthenwares and porcelain and all other accessories and component parts, either sold as a whole or in parts.3. after the amendment, it read as follows :-all electrical goods, machinery, instruments, apparatus, appliances, accessories and component parts (either sold as a whole or in parts), including fans, lighting bulbs, electrical earthenwares, porcelain and all other instruments, apparatus, appliances, accessories and component parts, the use of which cannot be had except with the application of.....
Judgment:
ORDER

Ramakrishnan, J.

1. In these two writ petitions, the petitioners are Messrs Textool Company Ltd., Coimbatore. They carry on business in the manufacture of textile machinery along with other items. They filed A.2 returns under the Madras General Sales Tax Act furnishing a turnover of rupees eleven lakhs and odd for September, 1964, and nearly rupees seven lakhs for October, 1964, and claimed that the sales should be assessed at the ordinary rate of 2 per cent. The second respondent, the Joint Commercial Tax Officer, Coimbatore, was of the opinion that the textile machinery fell under entry 41 of the First Schedule to the Madras General Sales Tax Act, 1959, as amended by Madras Act XV of 1964 and that the concerned turnover should be assessed at the single point rate of 6 per cent. The petitioners' contention in both these writ petitions is that entry 41 refers only to electrical machinery, but the textile machinery which the petitioners sold is not electrical machinery and therefore could not be assessed at the higher single point rate mentioned in entry 41. The view of the department, as set out in their counter-affidavit was that while entry 41, as it stood before the amendment made by Madras Act XV of 1964, did not make any reference to machinery, the entry was deliberately amended by the aforesaid Act by the inclusion of machinery, so that all machinery, whether electrical or not, could be brought within the entry. This view was sought to be supported by a reference to the statement of objects and reasons, which led up to the passing of Act XV of 1964, wherein it is stated : 'Government have decided to modify entry 41 of the First Schedule to the Act so as to specifically include machinery in the list of articles enumerated in the said item and to make it clear that the expression 'the use of which cannot be had except with the application of electrical energy' should be made to qualify only articles other than those specifically enumerated in that entry.' But the petitioners' contention, on the other hand, is that the statement of objects and reasons cannot be relied upon as an essential element for interpreting the terms of a statute. It can be referred to only for a limited purpose, which has been stated in Aswini Kumar case, : [1953]4SCR1 as 'only to explain what reasons induced the mover to introduce the Bill in the House and what objects he sought to achieve, but the statement of objects and reasons appended to the Bill should be ruled out as an aid to the construction of the statute.' Therefore, if we leave the statement of objects and reasons out of account, entry 41 should be interpreted according to known rules of interpretation, and so interpreted, it is contended that entry 41, even as it stands after the amendment, will refer only to electrical machinery and not to machinery of any kind, irrespective of the part which electricity plays in its user, and further it should conform to the broad conception of electrical goods as distinguished from other goods.

2. To make this point clear, a reference can be made to entry 41, as it stood before the amendment and as it stands afrer the amendment. Before amendment it read :

All electrical goods, instruments, apparatus, appliances and all such articles, the use of which cannot be had except with the application of electrical energy, including fans, lighting bulbs, electrical earthenwares and porcelain and all other accessories and component parts, either sold as a whole or in parts.

3. After the amendment, it read as follows :-

All electrical goods, machinery, instruments, apparatus, appliances, accessories and component parts (either sold as a whole or in parts), including fans, lighting bulbs, electrical earthenwares, porcelain and all other instruments, apparatus, appliances, accessories and component parts, the use of which cannot be had except with the application of electrical energy.

4. What the amendment has effected is to introduce 'machinery' between 'electrical goods' and 'instruments' and also to shift the clause 'the use of which cannot be had except with the application of electrical energy' from its position in the middle of the entry to the end. Apparently, the respondents want to infer, from such incorporation of the word 'machinery' and such shifting, that the clause 'the use of which cannot be had except with the application of electrical energy'' would qualify only the immediately following items, namely, fans, lighting bulbs, electrical earthenwares, porcelain etc., but would cease to qualify 'machinery' which is placed earlier between 'electrical goods' and 'instruments'. But the decision in William Jacks case, [1960] 11 S.T.C. 340 after referring to the clause 'the use of which cannot be had except with the application of electrical energy' observed that the test would not be decisive of the matter. In that case, the High Court had to deal with a lathe machinery which-it was found in that particular case-could not be used at all without the use of electrical energy. Nevertheless, the High Court held that 'on a prima facie view, even a lathe when driven by electric power is not electrical goods and the test would be still to find whether a particular machinery falls within the broad conception of electrical goods to which the entry was intended to relate.' No doubt at the time when the High Court gave the above interpretation to the entry, the word 'machinery' was not interpolated between 'electrical goods' and 'instruments'. The question now for consideration is whether such interpolation of the word 'machinery' would make any alteration to the principle laid down by the High Court in the above decision for interpreting the entry as a whole.

5. The principle of ejusdem generis can be relied upon in this connection. It is clear that we have in the entry first of all electrical goods to begin with and then follow various items which are mentioned as machinery, instruments, apparatus etc. and there is then reference to fans, lighting bulbs, electrical earthenwares, instruments, apparatus, appliances, accessories and component parts as being included in the entry. These inclusive items cover items which are clearly electrical goods. Even earlier, where the word 'machinery' had not been interpolated, instruments, apparatus, appliances etc., were all viewed as electrical goods. It does not appear that by the interpolation of the word 'machinery', the general complexion of all the articles included in the entry has been altered so as to cover all items of machinery irrespective of their being electrical goods or not.

6. In an unreported decision of Veeraswami and Ramaprasada Rao, JJ., in T.C. Nos. 108 to 110 of 1967 Burmah Shell Oil Storage and Distributing Co. of India Ltd., Madras v. State of Madras Since reported at p. 227 supra, the Bench of this Court had to interpret entry 47 in the same Schedule which stood as 'lubricating oils and greases'. It was amended by Act VII of 1964 to read 'lubricating oils, all kinds of mineral oils (not otherwise provided for in this Act), quenching oils and greases.' The question was whether furnace oil, which is a mineral oil but not a lubricant, would fall within the amended entry. The Bench observed that the amendment was not intended to include furnace oil which was a non-lubricant and that only lubricant oils were intended to be included in that entry, even after the amendment. That apart applying the ejusdem generis rule also, the same conclusion could be reached in that particular case. The Bench observed :

If two species are mentioned followed by general words, the rule of ejusdem generis may limit the sense of the general words to the species constituting a genus. But where a genus itself is mentioned followed by mention of certain species and in between is introduced general words, we think the position is a fortiori, for, sandwiched as they are, the general words will, in our opinion, take their sense and scope from the associated words preceding and following them.

7. On the same principle, it appears to me that the word 'machinery' after the amendment of entry 41 would take its sense and scope from the term 'electrical goods' that precedes it and the several items like fans and other goods, the use of which cannot be had without the use of electricity which follow it, and therefore, the same requirement of machinery being electrical goods as laid down in Willam Jacks case1 will continue to apply even after the amendment.

8. This apart, at the time of the hearing of the writ petition, reference was made by the learned Advocate for the petitioners to a clarification issued by the Board of Revenue on the request made by several dealers to the effect that the term 'machinery' after the amendment would only mean electrical machinery. The reference is A.2-6949/64, dated 5th January, 1965, Board of Revenue. The learned Government Pleader also has referred to a clarification issued by the Government itself, in a letter to the Accountant-General, Madras, No. 100554-CT-II-(2)/65-66 Revenue Department, dated 24th November, 1965, stating that the word 'machinery' occurring in entry 41 can be interpreted to mean electrical machinery. In view of this clarification and also in view of the result of the application of the principles of interpretation of statutes, referred to earlier, it cannot be seriously maintained that the textile machinery concerned in these two writ petitions, which are admittedly not electrical goods can be brought under entry 41 for the purpose of single point levy.

9. The writ petitions are therefore allowed and the orders levying single point assessment on the corresponding turnover are quashed by writs of certiorari. It will be open to the authorities to assess the petitioners to normal assessment at the multi-point levy. The petitioners will get their costs in these two writ petitions. Advocate's fee Rs. 150 (one set).


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //