1965 (10) TMI 50 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "articles" in entry 20 of Schedule E to the Bombay Sales Tax Act, 1959 regarding the sale of stainless steel utensils.

Analysis:
The judgment in question revolves around the interpretation of the term "articles" in entry 20 of Schedule E to the Bombay Sales Tax Act, 1959, specifically concerning the sale of stainless steel utensils. The issue arose when the assessees sought clarification on the applicable tax rate for the sale of stainless steel utensils purchased from a dealer outside the State of Gujarat. The Deputy Commissioner initially held that such utensils fell under entry 20, considering the word "articles" in the entry to encompass utensils made from stainless steel. However, the Sales Tax Tribunal disagreed, suggesting that the term "articles" in the context of entry 20 could have both a wide and narrow meaning, leading to ambiguity. The Tribunal ultimately concluded that utensils made from stainless steel did not fall under entry 20 but rather under the residuary entry 22 of Schedule E.

The judgment delves into the interpretation of the term "articles" in entry 20, emphasizing that the ordinary and dictionary meanings of the word support its broad application to include commodities or items for sale, such as utensils. The court rejected the argument that "articles" should be construed narrowly to mean only component parts or portions of a whole, highlighting that there was no legislative intent to limit the term in such a manner. The court also scrutinized other entries in different schedules of the Act where the term "articles" was used in a broad sense to encompass various items, reinforcing the inclusive nature of the term.

Furthermore, the judgment discussed the legislative intent behind the inclusion of the term "and utensils" in certain entries, clarifying that such additions were made to avoid ambiguity and ensure comprehensive coverage. The court emphasized that subsequent amendments to the entry, explicitly mentioning "steel articles including utensils," reinforced the legislative intention to encompass utensils within the term "articles." The court cited legal principles supporting the interpretation of subsequent legislation to clarify the meaning of earlier provisions, affirming that the inclusion of utensils in the term "articles" was consistent with the original intent of the entry.

In conclusion, the court upheld the Deputy Commissioner's interpretation that utensils made from stainless steel were covered under entry 20 of Schedule E, rejecting the Tribunal's contrary conclusion. The judgment clarified the expansive scope of the term "articles" and highlighted the legislative intent to include utensils within its ambit. The decision favored a broad interpretation of the term in line with legal principles and subsequent legislative actions, affirming the tax treatment of stainless steel utensils under the specified entry.