1981 (3) TMI 227 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of entry 121 of the Second Schedule to the Karnataka Sales Tax Act, 1957 regarding the levy of tax on carbon dioxide as an industrial gas.

Detailed Analysis:

1. Facts of the Case: The petitioner, dealing in industrial gases, had the sales turnover of carbon dioxide brought to tax under the Karnataka Sales Tax Act. The Deputy Commissioner proposed to revise the tax rate to 6% under entry 121 of the Second Schedule, considering carbon dioxide as an industrial gas.

2. Contention of the Petitioner: The petitioner argued that carbon dioxide, used in the preparation of aerated water, should not be considered an industrial gas under entry 121. The petitioner's contention was rejected at various levels of appeal.

3. Application of Ejusdem Generis: The petitioner invoked the principle of ejusdem generis, arguing that only combustible gases like oxygen and acetylene should fall under entry 121, not non-combustible gases like carbon dioxide. However, the court clarified that this principle is not applicable when the words used are independent and do not fall within one genus.

4. Interpretation of Entry 121: The court analyzed the entry, which includes gases like oxygen, acetylene, and nitrogen, where nitrogen is non-combustible. The court emphasized that the entry does not solely encompass combustible gases, as nitrogen, a non-combustible gas, is also listed.

5. Decision and Rationale: The court affirmed that carbon dioxide is an industrial gas, as acknowledged by the petitioner. The court held that despite the specific mention of oxygen, acetylene, and nitrogen in the entry, carbon dioxide, being used in the industry for aerated water production, falls under entry 121 for tax purposes. The court upheld the Deputy Commissioner's decision, deeming the assessing authority's order erroneous and confirming the tax liability on carbon dioxide.

6. Final Order: The court dismissed the revision petition, upholding the tax levy on carbon dioxide as an industrial gas under entry 121 of the Second Schedule to the Karnataka Sales Tax Act, 1957. No costs were awarded in this matter.