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White Field Ice-cream, Bakery and Coffee House Vs. State of Tamil Nadu - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberTax Case No. 1681 of 1977 [Revision No. 368 of 1977]
Judge
Reported in[1990]76STC332(Mad)
ActsTamil Nadu General Sales Tax Act, 1959; Trade and Merchandise Act, 1958; Uttar Pradesh Sales Tax Act, 1948
AppellantWhite Field Ice-cream, Bakery and Coffee House
RespondentState of Tamil Nadu
Cases ReferredLetang v. Cooper
Excerpt:
sales tax - packed items - tamil nadu general sales tax act, 1959, trade and merchandise act, 1958 and utter pradesh sales tax act, 1948 - revision petition challenged order which rejected claim of assessee that items sold by him did not come within scope of item 103 of first schedule - items which are 'tinned, canned, bottled or packed' come within scope of item 103 of first schedule - assessee contended that they are not selling bread and cakes as 'packed' - mere wrapping and bundling at time of sale cannot bring them under classification of 'packed' products - packing done for preservation and transportation will not include mere wrapping or bundling at stage of sale - revision petition allowed. - - aggrieved by the order of the assessing authority the matter was taken in appeal..........the scope of the expressions 'tinned, canned, bottled or packed' and has erred in holding that the word 'packed' occurring in item 103 will refer to the mere wrapping, covering, or bundling of the goods and it cannot be understood in a limited sense as has been urged by the assessee. for appreciating the said contention of the assessee it is necessary to set out item 103 of the first schedule as it stands now :s. no.description of the goodspoint of levyrate of tax(1)(2)(3)(4)(i)biscuits,at the point of first sale in the state.7% up to 14-8-1974 8% from 15-8-1974.(ii)toffees, (iii)chocolates, (iv)confectionery, (v)butter. (vi)ghee, (vii)cheese, and (viii)foods including preparations of vegetables, fruits, milk, cereals, flour, starch, birds' eggs, meat and meat offals, animal blood, fish.....
Judgment:

Ramanujam, J.

1. This revision is directed against the order of the Sales Tax Appellate Tribunal rejecting the claim of the assessee that bread and cakes sold by him were not 'tinned, canned, bottled or packed' and as such they cannot come within the scope of item 103 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.

2. The assessee carries on business in ice cream, bakery and coffee in Purasawalkam, Madras-7. They are also dealing in drugs. It reported a total taxable turnover of Rs. 2,08,123.15, for the year 1974-75. The assessing authority, however, determined the taxable turnover at Rs. 2,11,225.03, after a check of the assessee's account. Out of such turnover, he levied tax at 7 per cent and 8 per cent in respect of the turnover, relating to bread, cakes and biscuits which came to Rs. 1,75,212.90 treating those items as coming under item 103 of the First Schedule to the Tamil Nadu General Sales Tax Act, after rejecting the assessee's contention that the sales of those items are to be taxed at multipoint at a reduced rate of tax. Aggrieved by the order of the assessing authority the matter was taken in appeal by the assessee to the Appellate Assistant Commissioner but without success.

3. Thereafter the matter was taken to the Tribunal. The Tribunal has held that bread and cakes sold by the assessee will come under item 103 of the First Schedule, and, therefore, a higher rate of tax on these two items is justified. The Tribunal, however, held that the turnover relating to sales of biscuits will be assessed at the ordinary rate under Section 3(1) of the Act as biscuits sold by the assessee will not fall under item 103.

4. Before me, the learned counsel for the petitioner (assessee) contends that the Tribunal has not properly understood the scope of the expressions 'tinned, canned, bottled or packed' and has erred in holding that the word 'packed' occurring in item 103 will refer to the mere wrapping, covering, or bundling of the goods and it cannot be understood in a limited sense as has been urged by the assessee. For appreciating the said contention of the assessee it is necessary to set out item 103 of the First Schedule as it stands now :

S. No.Description of the goodsPoint of levyRate of tax(1)(2)(3)(4)

(i)Biscuits,At the point of first sale in the State.

7% up to 14-8-1974 8% from 15-8-1974.

(ii)Toffees, (iii)Chocolates, (iv)Confectionery, (v)Butter. (vi)Ghee, (vii)Cheese, and (viii)Foods including preparations of vegetables, fruits, milk, cereals, flour, starch, birds' eggs, meat and meat offals, animal blood, fish crustaceans and molluscs, which -

(a) are tinned, canned, bottled or packed. (b) are sold under any brand name registered under the Trade and Merchandise Marks Act, 1958 (Central Act 43 of 1958) and (c) do not fall under item 24.

5. We are not concerned with the turnover relating to biscuits as that has been taken to be assessable at multi-point by the Tribunal. We are, therefore, concerned only with bread and cakes. Bread and cakes will come under sub-item (viii) of item 103 as articles of food. Further to attract item 103 these articles must come under Clauses (a), (b) and (c). Clauses (a), (b) and (c) are cumulative is not disputed by the learned counsel for the Revenue, In this case the Tribunal has found that Clause (b) is satisfied, for the assessee has registered the articles manufactured by him under the Trade and Merchandise Act, 1958, with a trade mark registration No. 146705 and, therefore, these articles should be taken to have been sold under a brand name, 'White Field'. The Tribunal also finds that these articles do not fall under item 24 and, therefore, Clause (c) is satisfied. The findings of the Tribunal that the two articles, viz., bread and cakes sold by the assessee fall under Clauses (b) and (c) has not been seriously disputed by the learned counsel for the assessee ; his only contention being that they do not fall under Clause (a) as they are not tinned, canned, bottled or packed. Therefore, the main question that is to be considered by us is whether bread and cakes sold by the assessee are in 'tinned, canned, bottled or packed' condition.

6. According to the learned counsel for the assessee, unless the goods are sold as 'tinned, canned, bottled or packed', they cannot be taken to come under item 103. According to him the items sold are admittedly not 'tinned, canned or bottled'. Therefore, if at all, they can come under the word 'packed'. The contention of the learned counsel for the assessee is that they are not selling bread and cakes as 'packed' products and that the mere wrapping and bundling at the time of the sale of the above articles to the customers cannot bring them under the classification of ''packed' products. Though according to the dictionary meaning the word 'packed' means put things together into bundle, box, bag, etc., for transport or storing, in the setting in which the word 'packed' occurs in the statute it should mean packing for the purpose of preservation, transport and sale, and as such it will not cover the mere covering or wrapping or bundling at the stage of delivering the articles to the customers. The learned counsel refers to the following decisions in support of his submission that the word 'packed' occurring in Clause (a) of item 103 should receive a restricted meaning having regard to the preceding words 'tinned, canned, or bottled'. Commissioner of Sales Tax v. S.N. Brothers [1973] 31 STC 302, is a decision of the Supreme Court and in that case the expression 'scents and perfumes' occurring in entry 37 in the list appended to a notification issued under the U.P. Sales Tax Act, 1948, has been held not to cover edible essence like syrup and that the expression 'dyes and colours' used in entry 10 of the notification will not also include edible colours like food colours. The Supreme Court took the view that the words 'dyes and colours' used in entry 10 and the words 'scents and perfumes' used in entry 37 have to be construed in their own context and in the sense as ordinarily understood and attributed to these words by people usually conversant with and dealing in such goods. This case is an authority for the proposition that the words in a statute dealing with sales tax have to be construed in the sense in which they are popularly understood by those who deal in them and who purchase and use them, and they are also to be construed in the context and setting in which the words occur. In Gujarat Distributors v. State of Gujarat [1975] 36 STC 116, the Gujarat High Court has dealt with the scope of the expression 'dyes and chemicals' occurring in entry 4 of Schedule C to the Bombay Sales Tax Act, 1959. Interpreting the scope of the words 'dyes and chemicals' the court took the view that dye is not a basic chemical but it is an intermediary chemical product which can be utilised as such, that since the narrower word 'dyes' determines the nature of the wider word 'chemicals', the word 'chemicals' should take its meaning from the category of chemicals which a dye represents and that therfore, the word 'chemicals' which is used in entry 4 of Schedule C to the said Act should be taken to represent that chemical which can be used as an intermediary product and not as an 'end-product'. There the court has taken the view that the use of the word 'chemicals' along with the word 'dyes' in entry 4 of Schedule C would attract the principle of noscitur a sociis but that principle could be applied only for the limited purpose of knowing the types of chemicals which are contemplated by the entry. In Rainbow Steels Ltd. v. Commissioner of Sales Tax [1981] 47 STC 298, the Supreme Court has considered the scope of the principle of noscitur a sociis while considering the words 'old, discarded, unserviceable or obsolete machinery, stores or vehicles' occurring in entry 15 in a notification dated 30th May, 1975, issued under the U.P. Sales Tax Act. In that case the assessee invoked the principle of noscitur a sociis for construing the expression 'old' because of its association with other expressions like 'discarded, unserviceable or obsolete' occurring in that entry, and contended that the expression 'old' which is more general should be restricted to a sense analogous to that of the less general expressions, namely 'discarded, unserviceable or obsolete'. The Supreme Court while dealing with the said principle of noscitur a sociis referred to the following observations of Diplock L.J. in Letang v. Cooper [1965] 1 QB 232 :

'The maxim noscitur a sociis is always a treacherous one unless you know the societas to which the socii belong'

and held that the said principle was applicable to the construction of the expression 'old' occurring in entry 15 and that expression will have to be given a restricted meaning, a sense analogous to that of the less general words clubbed with it. This decision of the Supreme Court applies to the facts of this case and the principle of noscitur a sociis would be applicable to the construction of the expression 'packed' occurring in the collection 'tinned, canned and bottled'. The principle of noscitur a sociis has been explained in Maxwell on the Interpretation of Statutes (12th Edition), at page 289, thus :

'Where two or more words which are susceptible of analogous meaning are coupled together, noscitur a sociis. They are understood to be used in their cognate sense. They take, as it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general.'

7. In the case on hand the word 'packed' which is general should be understood in a sense analogous to that of the other words clubbed with it such as 'tinned, canned and bottled'. The words 'tinned, canned or bottled' will denote a process of packing for preservation, transport and sale' and they will not denote the mere wrapping or parcelling of articles when they are sold. The words 'tinned, canned and bottled' can only mean such packing as is necessary for the preservation and their transport and sale. We have to, therefore, agree with the learned counsel for the assessee that the expression 'packed' could take its colour from the words preceding, and therefore, it should take in only such packing which is done for the preservation, transport and sale and will not include mere wrapping or bundling at the stage of the sale of the articles. Having regard to the restricted meaning given by us to the word 'packed' by applying the principle of noscitur a sociis we have to hold that in this case bread and cakes which are merely wrapped and bundled at the time of the delivery of those articles to the customers by the assessee cannot come under item 103. Therefore, the sales of bread and cakes should be taken to come only under multi-point. Therefore, the revision petition is allowed. There will, however, be no order as to coats.


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