1974 (6) TMI 51 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of whether glass "ampules" are considered "bottles" under specific entries of the Bombay Sales Tax Act, 1959.

Detailed Analysis:

1. Background and Assessment Dispute:
The petitioner, a partnership firm manufacturing and selling ampules, faced a dispute regarding the classification of empty ampules for tax assessment purposes. The Sales Tax Officer taxed the ampules under entry No. 6(vii) of Schedule C, while the Assistant Commissioner proposed taxing them under the residuary entry No. 22 of Schedule E. The petitioner contended that the ampules fell under entry No. 6(vii) as bottles designed for packing medicines and liquid injections.

2. Nature of Ampules and Legal Interpretation:
The ampules manufactured by the petitioner were described as empty containers purchased for filling injections and liquid medicines, hermetically sealed after filling. The critical question was whether these ampules could be classified as "bottles" under entry No. 6(vii) of Schedule C. The legal analysis focused on the interpretation of the term "bottles" within the commercial context of the sales tax statute.

3. Scientific vs. Commercial Meaning of "Bottles":
The court examined the scientific definition of "bottles" as narrow-necked containers for liquids, including various forms like jars, vials, and ampules. However, for tax purposes, the commercial meaning of a term prevails. Referring to established legal principles, the judgment emphasized that the interpretation should align with the common understanding in the commercial market rather than a purely scientific definition.

4. Commercial Perception and Legislative Intent:
Applying the commercial test, the court analyzed whether a dealer seeking glass bottles in the market would expect to receive glass ampules and vice versa. It was concluded that glass bottles and ampules were distinct in the commercial world due to their sealing mechanisms, supporting the argument that ampules did not fall under the category of "bottles" in entry No. 6(vii).

5. Interpretation of Statutory Entry and Noscitur a Sociis Principle:
The judgment delved into the specific wording of entry No. 6(vii), which included "empty bottles and corks" together. By applying the noscitur a sociis principle, which considers the meaning of a word in relation to its context, the court inferred that bottles in the entry referred to containers that could be closed with corks. As ampules did not align with this description, they were not covered under the said entry.

6. Conclusion and Disposition:
Based on the analysis of commercial understanding, statutory interpretation, and legislative intent, the court upheld the Appellate Tribunal's decision. It was ruled that the ampules manufactured by the petitioner did not qualify as "bottles" under entry No. 6(vii) of Schedule C. Consequently, the reference was answered in the negative, and the petitioner was directed to bear the costs of the respondent-State.

7. Final Order:
The judgment provided a comprehensive analysis of the classification issue, emphasizing the importance of commercial context in interpreting statutory provisions. By clarifying the distinction between glass ampules and bottles, the court resolved the tax assessment dispute in favor of excluding ampules from the specific entry under consideration.