1977 (12) TMI 121 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of entry No. 25 of Schedule II, Part II of the M.P. General Sales Tax Act, 1958 regarding whether colour-powders fall within the category of "dyes."

Detailed Analysis:

The judgment was delivered in response to a question referred to the Bench regarding the classification of colour-powders under entry No. 25 of the M.P. General Sales Tax Act. The petitioner, a kirana shopkeeper, argued that colour-powders should not be considered "dyes" under the mentioned entry, as they are distinct from dyeing materials used by textile mills. The petitioner contended that since the legislature used the term "dyes" and not "colour-powders," the latter should not be taxed as dyes. The petitioner also relied on the principle of "ejusdem generis" to support their argument.

The department, represented by the Advocate-General, asserted that colour-powders sold by the petitioner are commonly used as dyes in the market and should be taxed accordingly. The Advocate-General argued that the term "dyes" in common parlance refers to colour-powders used for everyday dyeing purposes and is not limited to industrial dyeing materials.

The court rejected the petitioner's argument, stating that the common understanding of a "dye" includes any material used to impart color to fabric or fix itself on fibers. The court emphasized that the legislative intent behind the tax classification is to generate revenue based on general usage and commercial terms, rather than technical definitions from fields like Organic Chemistry.

Regarding the application of the principle of ejusdem generis, the court cautioned against stretching the rule too far and clarified that it should only be applied in the absence of contradictory indications. The court highlighted that specific items in tax statutes should be interpreted based on their popular meaning in commercial practice, rather than scientific definitions.

In conclusion, the court held that colour-powders do fall within the definition of "dyes" under entry No. 25 of the Sales Tax Act and are subject to taxation at the prescribed rate. The judgment resolved the question in the affirmative, directing the petition to be reviewed by the Division Bench for further legal proceedings.