1987 (4) TMI 458 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether chicks are goods covered by entry 54 in List II of the Seventh Schedule to the Constitution of India.
2. Whether chicks could be treated as live-stock under sub-rule (2) of rule 5 of the Andhra Pradesh General Sales Tax Rules, 1957 for the purpose of imposing sales tax.

Issue-wise Detailed Analysis:

1. Whether chicks are goods covered by entry 54 in List II of the Seventh Schedule to the Constitution of India:

The petitioners, who are hatcheries engaged in the business of hatching and selling chicks, contested their assessment to sales tax on the turnover relating to the sale of one-day-old chicks, arguing that the State Legislature was not competent to levy tax on animate objects like live-stock. The court examined the definition of "goods" in clause (12) of article 366 of the Constitution, which includes "all materials, commodities and articles." The court referred to various dictionaries and legal texts to establish that the term "commodity" denotes anything movable and tangible that is produced or used as a subject of sale.

The court noted that the use of the word "includes" in the definition of "goods" indicates that the definition is not exhaustive. The court cited previous judgments, including United Provinces v. Mst. Atiqa Begum and Commissioner of Sales Tax v. Madhya Pradesh Electricity Board, to emphasize that the term "goods" should be given the widest possible meaning to include all movable property. The court concluded that chicks, being tangible movable things produced for sale, fall within the definition of "goods" under entry 54 in List II of the Seventh Schedule to the Constitution of India.

2. Whether chicks could be treated as live-stock under sub-rule (2) of rule 5 of the Andhra Pradesh General Sales Tax Rules, 1957 for the purpose of imposing sales tax:

The petitioners argued that chicks should be treated as live-stock under sub-rule (2) of rule 5 of the Andhra Pradesh General Sales Tax Rules, 1957, which would change the basis of tax computation. Rule 5(2) specifies that the turnover of a dealer for certain goods, including "live-stock," should be the total amount payable as consideration for their purchase. The term "live-stock" is defined to include domestic animals such as oxen, bulls, cows, buffaloes, goats, sheep, and horses.

The petitioners contended that the word "etc." in the definition suggests that chicks should be included in the category of live-stock. However, the court applied the rule of ejusdem generis cautiously, noting that the specific words must apply to a distinct class or category. The court concluded that chicks do not belong to the same category as the enumerated domestic animals, which are all quadrupeds. The court emphasized that in common parlance, chicks are not considered domestic animals like oxen, bulls, cows, buffaloes, goats, sheep, and horses.

The court also referred to the definition of "live-stock" in the A.P. (Agricultural Produce and Live-stock) Markets Act, 1966, which includes poultry. However, the court held that this definition could not be applied to the Andhra Pradesh General Sales Tax Rules, 1957, as the provisions of rule 5(2) are clear and do not include chicks as live-stock.

Conclusion:

The court held that chicks are "goods" within the meaning of entry 54 in List II of the Seventh Schedule to the Constitution of India and that the law authorizing the levy of tax on their sale is valid. The court also held that chicks could not be treated as live-stock under sub-rule (2) of rule 5 of the Andhra Pradesh General Sales Tax Rules, 1957. Consequently, the writ petitions were dismissed, with no order as to costs.