JUDGMENT
K.M. Natarajan, J.
1. The revisions, T.C. Nos. 989 to 991 of 1979 are directed by the assessee against the common order passed by the Sales Tax Appellate Tribunal, Coimbatore. T.C. No. 1245 of 1980, is filed by the department against the order passed by the Tribunal for deleting the word “packed” occurring in the observation of the order of the Tribunal on a petition filed by the assessee under section 55 of the Tamil Nadu General Sales Tax Act, 1959.
2. The assessment years in question are 1974-75 to 1976-77. The assessee is a wholesale dealer in sago. The assessing officer treated the tapioca products sold by the petitioner at the point of first sale in the State since sago packed and sold under brand name coming within the purview of item 103 of the First Schedule. Accordingly, they were taxed at 8 per cent. The Appellate Assistant Commissioner as well as the Tribunal confirmed the same. Hence the other three revisions.
3. The question that arises for consideration in these four revisions is whether the sago and tapioca are food packed and sold under the brand name as contemplated under item 103 of the First Schedule to the Act. According to the learned counsel for the assessee, the assessee has purchased the sago products packed in gunny bags from various registered dealers and he in turn sells them to his customers. The sago has also suffered tax and that it is not liable to be taxed again since it is a second sale which does not warrant taxation. The assessee except affixing the brand name over the gunny bags which were purchased from the registered dealers, does not do anything. Since the assessee sold the sago products in the same condition in which they have been purchased, they would not come under item 103 of the First Schedule. According to the learned counsel, even in ground No. 5 of the Memorandum of Revision in T.C. No. 1245 of 1980 filed by the Revenue, it is stated that if the word “packed” is deleted, the goods are taken away from the scope of item 103 of the First Schedule and, therefore, the earlier order dated 13th June, 1979, which is the subject-matter of the other three revisions, would be infructuous. According to the learned counsel for the assessee, the Tribunal has not properly understood the scope of the expression “tinned, canned, bottled or packed”. The learned counsel drew the attention of this Court to the contention of the assessee before the Tribunal and the assessing authority wherein it is stated that the goods (sago) are purchased, duly filled in gunny bags and the same goods in the same gunny bags are sold, with the addition of some brand name in the sale bill without any packing done by the assessee. It is further stated that the tapioca globules sold in gunny bags cannot be said to be sold in packed condition as understood in item 103. The packing referred to therein is only a special kind of packing like tinned, canned, bottled and packed. The use of gunny bags is just like sale of paddy, oil-cake, rice, pulses, etc. and that it cannot be said to be “packed” as contemplated under item 103. It is further submitted that to attract item 103, the article, namely, tapioca products, must come under clauses (a), (b) and (c), that clauses (a), (b) and (c) are cumulative and unless all the three clauses are satisfied, it cannot be said that said item 103 is attracted to this article In this connection, our attention was drawn to the decision reported in T.C. No. 1681 of 1977 dated 28th April, 1983 (White Field Ice-Cream, Bakery and Coffee House v. State of Tamil Nadu) (Printed at page 332 infra). It was held in the above quoted case 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 included mere wrapping or bundling at the stage of the sale of the articles. It was further held that having regard to the restricted meaning given by the Bench to the word “packed” by applying the principle of noscitur a sociis, bread and cakes which are merely wrapped and bundled at the time of delivery of those articles to the customers by the assessee cannot come under item 103 and, therefore, the sales of bread and cakes should be taken to come only under multi-point. It was further held that to attract item 103, the three clauses, namely, (a), (b) and (c) under item 103 are to be satisfied.
4. For appreciating the said contention of the assessee and also the ratio laid down in the abovesaid decision, it is necessary to set out item 103 as it stood during the relevant period of assessment.
—————————————————————–
S. No. Description of the goods Point of Rate Effective
levy of from
tax
(1) (2) (3) (4) (5)
per cent
-----------------------------------------------------------------
103. (i) Biscuits, At the point 7 4-3-1974
(ii) Toffees of first sale 8 15-8-1974
(iii) Chocolates, in the State.
(iv) Confectionery 10 1-3-1982
(v) Butter,
(vi) Ghee,
(vii) Cheese, and
(viii) Food 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.
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5. It is to be noted that clause (a) was deleted after 10th October, 1979, while making an entry from that date in respect of item 103. Applying the ratio laid down in the abovesaid case, by purchasing sago and tapioca products in gunny bags and in turn selling the same in the same condition, it cannot be said that the assessee has packed the same so as to attract item 103. As already stated, even as per the contention of the department in T.C. No. 1245 of 1980, if clause (a) with regard to “packed” is not satisfied, then the goods are taken away from the scope of item 103 of the First Schedule. In view of the ratio laid down in the Bench decision, if clause (a) is not satisfied, it is not open to the assessing authority to levy tax under item 103 of the First Schedule. In this connection, our attention was drawn to the decision of the Supreme Court in Alladi Venkateswarlu v. Government of Andhra Pradesh [1978] 41 STC 394, wherein it was observed :
“We do not think that it is fair to so interpret a taxing statute as to impute an intention to the legislature to go on taxing what is virtually the same product in different forms over and over again. Such a result would be contrary to basic axioms of taxation. Unless the language of the taxing statute was absolutely clear, it should not be given an obviously unfair interpretation against the assessee.”
6. In the instant case, the contention of the assessee that goods (sago) are purchased, duly filled in gunny bags and the same goods in the same gunny bags are sold with the addition of some brand name has not been controverted. But, the Tribunal proceeded as if the assessee admitted that he purchased tapioca product, packed them and sold the same under brand name registered under the Trade and Merchandise Marks Act, and hence it is liable to be taxed as per item 103. It is only by challenging the said observation, the assessee filed a petition before the Tribunal to delete the word “packed” and the Tribunal allowed the application deleting the word “packed”. It is observed in the said order :
“According to the petitioner, sago products were purchased in gunny bags and he sold them as such without packing being done by him. We do not know whether this statement is true or not. But, in keeping with the plea taken by the petitioner, the word ‘packed’ occurring in the observation is deleted.”
7. If that is deleted, there is nothing to show that the assessee after purchase had done any package as contemplated under clause (a) of item 103. Hence, we are of the view that on account of the mere fact that the assessee is a wholesale dealer and that he purchased sago products in gunny bags and sold them as such without packing being done but by affixing his bran name, it would not attract item 103 of the Act. The learned Additional Government Pleader is unable to state as to how the order passed by the Tribunal allowing the rectification is erroneous and improper so as to warrant this court to interfere with the same. We do not find any ground the interfere with the said order.
8. In the result, the Tax Cases Nos. 989 to 991 of 1979 are allowed and consequently the disputed turnover is deleted from the taxable turnovers. The revision filed by the Revenue, namely, Tax Case No. 1245 of 1980 is dismissed. No order as to costs.
9. T.C. Nos. 989 to 991 of 1979 allowed.
10. T.C. No. 1245 of 1980 dismissed.
Appendix
[The judgment of the Division Bench of the Madras High Court consisting of RA and FAKKIR MOHAMMED, JJ., in White Field Ice-Cream, Bakery and Coffee House v. State of Tamil Nadu (Tax Case No. 1681 of 1977 [Revision No. 368 of 1977] decided on 28th April, 1983) is printed below :-]
WHITE FIELD ICE-CREAM, BAKERY AND COFFEE HOUSE v. STATE OF TAMIL NADU
Ramanujam, J.
11. 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.
12. 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 multi-point 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.
13. 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.
14. 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 at it stands now :
—————————————————————–
S. No. Description of the Point of levy Rate of tax
goods
(1) (2) (3) (4)
-----------------------------------------------------------------
(i) Biscuits, At the point 7% up to 14-8-1974
(ii) Toffees, of first sale 8% up to 15-8-1974.
(iii) Chocolates, in the State.
(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.
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15. 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.
16. 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 to 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 therefore, 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.”
17. 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 re 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 costs.