1974 (8) TMI 89 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Classification of Aldrex, Dieldrex, and Endrex under the Bombay Sales Tax Act, 1959.
2. Interpretation of the term "chemicals" in Entry 4 of Schedule C.
3. Application of the principle of noscitur a sociis.
4. Popular meaning and commercial sense of the term "chemicals."

Issue-Wise Detailed Analysis:

1. Classification of Aldrex, Dieldrex, and Endrex under the Bombay Sales Tax Act, 1959:
The primary issue was whether the chemical products Aldrex, Dieldrex, and Endrex sold by the applicant fall under Entry 4 of Schedule C as "chemicals" or under the residuary Entry 22 of Schedule E of the Bombay Sales Tax Act, 1959. The Tribunal held that these articles did not fall within Entry 4 of Schedule C and were rightly classified under the residuary Entry 22 of Schedule E. The applicant contested this decision, leading to the reference to the High Court.

2. Interpretation of the term "chemicals" in Entry 4 of Schedule C:
The court examined whether the disputed articles could be considered "chemicals" as per Entry 4 of Schedule C. The analysis revealed that Aldrex, Dieldrex, and Endrex are insecticides used in agriculture, containing chemicals derived through chemical processes. However, the court noted that the term "chemicals" in Entry 4 should be interpreted in the context of the entry's wording and its association with "dyes."

3. Application of the principle of noscitur a sociis:
The court applied the principle of noscitur a sociis, which means that the meaning of a word should be determined by the context in which it is used, particularly by the words surrounding it. Since Entry 4 of Schedule C mentions "dyes and chemicals," the court concluded that the term "chemicals" should take its meaning from the context of "dyes." Dyes are intermediary products, not end-products, and thus, the chemicals referred to in Entry 4 should also be intermediary products.

4. Popular meaning and commercial sense of the term "chemicals":
The court emphasized that the term "chemicals" should be understood in its popular and commercial sense. Referring to Supreme Court precedents, the court noted that terms in taxing statutes should be interpreted according to their common understanding among consumers and dealers. In this context, the court reasoned that a consumer asking for "chemicals" in the market would not expect to receive Aldrex, Dieldrex, or Endrex, which are known as insecticides rather than general chemicals.

Conclusion:
The court concluded that Aldrex, Dieldrex, and Endrex are not the "chemicals" contemplated by Entry 4 of Schedule C. Instead, they fall under the residuary Entry 22 of Schedule E. The reference was answered in the negative, and the applicant was ordered to bear the costs of the opponent-State.