JUDGMENT
Dr. B.P. Saraf, J.
1. By this reference made under section 61(1) of the Bombay Sales Tax Act. 1959, at the instance of the assessee, the Maharashtra Sales Tax Tribunal has referred the following question of law to this Court for opinion :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in concluding that tol thinner and auto thinner were covered by entry 39 in Schedule C to the Bombay Sales Tax Act, 1959, as in force till June 30, 1981.”
2. The assessee is a manufacturer of all types of thinners, lacquers and industrial coatings. He submitted his return of turnover under the Bombay Sales Tax Act, 1959 (“the Act”) for the period from October 22, 1977 to November 7, 1980 to the Sales Tax Officer. In the said return, it was claimed by the assessee that sales of “tol thinner and auto thinner” amounting to Rs. 1,87,880 made by it to one M/s. Bhor Industries Limited against T forms were liable to be assessed to tax at concessional rates, as they were chemicals and, as such, covered by entry 39(i) of the notification issued under section 41 of the Act. It was pointed out that these items had been claimed by the purchaser, M/s. Bhor Industries Ltd. also as purchases of chemicals covered by entry 39 of the notification issued under section 41 of the Act. The Sales Tax Officer, however, did not accept the above contention of the assessee and rejected the same as, in his opinion, the items sold by the assessee were covered by entry 39(d) of Schedule C to the Bombay Sales Tax Act as in force till June 30, 1981 and not by entry 39(i) of the notification under section 41 of the Act. Appeal of the assessee against the above order of the Sales Tax Officer having been dismissed by the Assistant Commissioner of Sales Tax, the assessee went in further appeal to the Maharashtra Sales Tax Tribunal (“the Tribunal”). The contention of the assessee before the Tribunal was that “tol thinner” and “auto thinner” were chemicals which did not fall under entry 39(d) of Schedule C to the Act. A number of chemical dictionaries and other literature containing definitions and description of these items were produced before the Tribunal in support of the above contention. The Tribunal, however, did not accept the contention of the assessee and held that the items in question could be regarded as “thinner” falling under entry 39(d) of Schedule C to the Act which was subject to tax at the rate of 12 per cent and not under the residuary entry 22 of Schedule E. Hence, this reference at the instance of the assessee.
3. Entry 39 of Schedule C to the Act, as in force at the material time and till June 30, 1981, reads as below :
SCHEDULE “C”
————————————————————————
Serial Description of goods Rate of Rate of Period of
No. sales tax purchase operation.
in paise tax in
in the paise in
rupee. the rupee
------------------------------------------------------------------------
(1) (2) (3) (4) (5)
------------------------------------------------------------------------
39 (a) Synthetic pigments, Twelve Twelve 1-10-1972
other than textile to
dyes. 30-6-1981
(b) All kinds of paints, Twelve Twelve 1-10-1972
other than those to
specified in entry 40 30-6-1981
in this Schedule
but including
distempers, cement
colours or paints,
powder paints, stiff
paste paints, enamels
and liquid paints whether
ready for use or not.
(c) Varnishes, vegetable Twelve Twelve 1-10-1972
turpentine, paint to
removers and stainers 30-6-1981
of all kind.
(d) All kinds of vehicles Twelve Twelve 1-10-1972
diluents and thinners to
including natural and 30-6-1981
synthetic drying and
semi-drying oils, such
as double boiled linseed
oil, blown linseed oil,
stand oil, Sulphurised
linseed oila, perilla oil,
whale oil and tung oil.
------------------------------------------------------------------------
Entry 22 of Schedule E is a residuary entry, and covers all goods other than those specified from time to time in Schedules A, B, C, D and the preceding entries of Schedule E. The rates of taxes leviable on the sales and purchases of such goods at the material time was 5 paise in a rupee as against 12 paise in a rupee, which was applicable to sales and purchases of goods covered by entry 39(d) of Schedule C. Entry 22 of Schedule E at the material time, stood as follows :
SCHEDULE “E”
————————————————————————
Serial Description of goods Rate of Rate of Rate of Period of
No. sales general purchase operation.
tax in sales tax in
paise tax in paise
in the paise in in the
rupee. the rupee. rupee
------------------------------------------------------------------------
1 2 3 4 5 6
------------------------------------------------------------------------
22 All goods other than Five Three Five 15-4-1974
those specified from to
time to time in 30-6-1981
Schedules A, B,
C and D in the
preceding entries.
------------------------------------------------------------------------
Besides, if the goods in question are held to be “chemicals” as contended by the assessee, the sales thereof to registered dealers would be eligible to exemption from whole of general sales tax and retail sales tax on fulfilment of certain conditions by virtue of entry 39 in the Schedule of notification issued by the State Government under section 41 of the Act. Counsel for the parties are agreed that if the goods in question do not fall under entry 39(d) to the Schedule C to the Act, it would fall under entry 22 of the Schedule E as claimed by the assessee. The determination of the controversy therefore, depends upon the interpretation of entry 39(d) of Schedule C to the Act. According to the assessee, “tol thinners” and “auto thinners” are not “thinners” which are used in paint industry – these are in fact, “chemicals” used for dissolving rubber for the manufacture of leather cloth. The case of the assessee is that these items do not fall under entry 39(d) of Schedule C, because items mentioned therein are only items used in the paint industry or items used with paints and “tol thinners” and “auto thinners”, which are chemicals used for dissolving rubber for the manufacture of leather cloth, would, therefore, not fall under that entry.
4. The learned counsel for the Revenue submitted before us that the expression “vehicles diluents and thinners” used in item (d) of entry 39 was wide enough to take within its ambit “all kinds of vehicles diluents and thinners”, and hence “tol thinner” and “auto thinner” would also fall within it. On a careful reading of clause (d) of entry 39, we found that the expression used therein was “all kinds of vehicles diluents and thinners” without a “comma” between the words “vehicles” and “diluents” which was indicative of the fact that the word “vehicles” preceding the words “diluents and thinners” was not placed there as an independent word but had been used to qualify “diluents and thinners”. We, therefore, asked the learned counsel for the Revenue to tell us the meaning of the expression “vehicles” appearing in entry 39(d). The learned counsel searched the dictionaries and was quick with the answer that it means “medium”, such as “medium of thought”. As we could not find any relevance of the above meaning in the context in which the word “vehicles” appears in entry 39(d), we again sought the assistance of the learned counsel and asked him to enlighten us as to how the meaning suggested by him can fit in entry 39(d) which enumerates some “material objects” or “goods” specified therein. There was no answer, and in our opinion, rightly so, because the above dictionary meaning of the expression “vehicles” does not have any relevance whatsoever in the context of entry 39(d). It is well-known that a word has no absolute meaning. It is used in different senses according to its context, and the dictionary gives all the meanings of a word. The primary meaning of the word varies with its setting or context and with the subject-matter to which it is applied. Shorn of the context, the words by themselves are slippery customers. The courts therefore, have to select the particular meaning which would be relevant to the context in which it has to interpret that word.
5. It is obvious from a reading of entry 39 that the word “vehicles”, which precedes the words “thinners and diluents”, does not and cannot mean “medium of thought” as suggested by the counsel for the Revenue. That meaning of “vehicles” is not relevant in the context and setting of entry 39(d) of Schedule C nor does it make any sense with the words “thinners and diluents”. We, therefore, ourselves, tried to find out the true meaning of the expression “vehicles” which qualifies “thinners and diluents” and after some effort, could find out the answer in “The Condensed Chemical Dictionary” (revised by Gessner G. Hawley, 9th edition) where the word “vehicle” has been defined as follows : “A term used in paint technology to indicate the liquid portion of a paint, comprised of drying oil or resin, solvent, and thinner, in which the solid components are dissolved or dispersed …”
“Vehicle” has also been described in McGraw-Hill Dictionary of Scientific and Technical Terms (Third edition), inter cilia, as :
“The fluid component of a printing ink; acts as a carrier for the pigment ……”
This meaning fits perfectly well in entry 39(d), specially because all the items in that entry, as stated above, are items which are products of paint industry or used in paint industry.
“Diluent” has been defined in the Condensed Chemical Dictionary as :
“An ingredient used to reduce the concentration of an active material to achieve a desirable and beneficial effect. Examples are combination of diatomaceous earth with nitroglycerine to form the much less shock-sensitive dynamite; addition of sand to cement mixes to improve workability with no serious loss of strength; addition of an organic liquid having no solvent power to a paint or lacquer to reduce viscosity and achieve suitable application properties ……….”
“Thinner” has been defined therein as :
“A hydrocarbon (naphtha) or oleoresinous solvent (turpentine) used to reduce the viscosity of paints to appropriate working consistency usually just prior to application. In this sense a thinner is a liquid diluent, except that it has active solvent power on the dissolved resin ……”
In McGraw-Hill Dictionary of Scientific and Technical Terms, “diluent” has been described thus :
“Diluent (CHEM) : An inert substance added to some other substance or solution so that the volume of the latter substance is increased and its concentration per unit volume is decreased …..”
In the same dictionary “thinner” has been described as :
“A liquid used to thin paint, varnish cement, or other material to a desired consistency …….”
It is clear from the above definitions that the words “vehicles thinner” mean substances like naphtha or turpentine used to reduce the viscosity of paints to appropriate working consistency wholly just or prior to application. Similarly, “vehicles diluents” would also mean ingredients used to reduce viscosity in paint or lacquer to achieve suitable application properties.
6. In the light of above, it may now be seen whether “tol thinners” and “auto thinners” sold by the assessee meet the above description of “vehicles diluents and thinners”. “Tol thinners” and “auto thinners” are used for dissolving rubber for manufacture of leather cloth and usually purchased for that purpose.
It is for that reason that they consist of 90 per cent of toluene and 10 per cent of ethyl acetate as against to 60 to 70 per cent of toluene and 30 to 40 per cent of butyl acetate or turpentine used in preparation of vehicles thinners and diluents. They are not thinners or diluents used for reducing the viscosity in paints and lacquers, and hence, they would not fall under entry 39(d) of Schedule C.
7. The very same conclusion, will be there, if we interpret the words “tol thinners” and “auto thinners” with the aid of the “user test” which permits the courts, while interpreting items in the taxing statute, also to consider the use to which the goods can be put. There is no dispute about the fact that the particular use to which it is applied in the hands of a special customer is not determinative of the nature of the goods. It is its general or predominant user which might determine the category in which the article would fall. Applying the above test also, it is obvious that “tol thinner” and “auto thinner” are not “vehicles diluents and thinners”, and hence they would not fall under entry 39(d) of Schedule C.
8. The controversy may be examined from one more angle. Entry 39 enumerates a number of items in the four clauses thereof. A bare look at those items clearly goes to show that each one of them falls in the category of pigments, paints, varnishes and diluents and thinners thereof. In such a situation, the expression “all kinds of vehicles diluents and thinners” can also be interpreted with the aid of the principles of ejusdem generis and noscitur a sociis. However, in view of the clear meaning of the word “vehicles” which qualifies “diluents and thinners”, it is not necessary to do so.
9. Our above conclusion is also supported from the fact that “tol thinners” and “auto thinners” have been sold by the assessee to customers who are mainly engaged in the business of manufacture of leather, rubber or resin cloth for use as a chemical in the manufacture of these products.
10. We are, therefore, of the clear opinion that “tol thinner” and “auto thinner” do not fall under entry 39(d) of Schedule C to the Act.
11. Consequently, they will fall under entry 22 of Schedule E to the Act and will be taxable at the rates applicable to the sales of goods falling thereunder read with entry 39 of the Schedule to the notification issued by the State Government under section 41 of the Act.
12. For the reasons set out above, we answer the question referred to us in the negative and in favour of the assessee.
Under the facts and circumstances, there shall be no order as to costs.
13. Reference answered in the negative.