1961 (3) TMI 86 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the proviso to section 5(1) of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis:
The case involved wholesale dealers in biscuits and chocolates contesting the tax rate applicable to their turnover. The dispute centered around whether the turnover of biscuits and chocolates should be taxed at 2 nP. per rupee or 3 nP. per rupee under the proviso to section 5(1) of the Andhra Pradesh General Sales Tax Act, based on the location of sale. The key question was whether the term "any other place" in the proviso included the wholesale depot of the assessee or was limited to specific locations like hotels and restaurants. The application of the ejusdem generis rule, which restricts the interpretation of general words by specific preceding words, was crucial in determining the scope of the proviso.

The ejusdem generis principle necessitates specific words constituting a class not exhausted by enumeration, followed by general words restricted to the same genus. The specific words should not refer to vastly different objects but belong to a common category. The application of this rule requires caution and should not be extended beyond the legislative intent. The judgment extensively cited legal authorities to explain the application of ejusdem generis and emphasized the need for a distinct genus or category to invoke the rule.

The court rejected the argument that the term "any other place" should be interpreted literally, emphasizing that the specific locations listed in the proviso formed a distinct category of places for immediate consumption of food. The legislative amendments adding "stall or any other place" indicated a specific intention to include additional sales locations. The judgment highlighted that the Act did not differentiate tax rates based on the place of sale, supporting the conclusion that the higher tax rate applied to specific locations akin to hotels and restaurants. Interpreting the proviso otherwise would go against legislative intent. Ultimately, the court upheld the Tribunal's decision, dismissing the revision case and awarding costs to the respondent.

In conclusion, the judgment clarified the interpretation of the proviso to section 5(1) of the Andhra Pradesh General Sales Tax Act, emphasizing the application of the ejusdem generis rule and legislative intent in determining the tax rate based on the location of sale of articles of food.