1991 (8) TMI 301 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the doctrine of ejusdem generis applies to entry 40 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.
2. Whether the product "Thermofoam" falls under entry 40(v) of the First Schedule to the Act and is exigible to a single point rate of tax.

Detailed Analysis:

Issue 1: Doctrine of Ejusdem Generis
The core issue revolves around whether the doctrine of ejusdem generis can be applied to entry 40 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. This doctrine is a principle of statutory interpretation where general words following specific words are construed to include only items of the same type as those listed.

Arguments and Authorities Cited:
- Assessee's Argument: The assessee argued that the principle of ejusdem generis should apply, meaning the general term "other articles" in entry 40(v) should be restricted to items similar to those specifically listed in sub-entries (i) to (iv), which are items used for rest and comfort of the human body.
- Government's Argument: The Additional Government Pleader contended that sub-entries (i) to (iv) do not form a distinct category, and thus, the general term "other articles" should not be restricted.

Case Laws Referenced:
- Burmah Shell Oil Storage and Distributing Company of India Limited v. State of Madras: The court held that for the ejusdem generis rule to apply, there must be a distinct category formed by the specific words.
- Controller of Estate Duty v. Ramachandra Gounder: The Supreme Court emphasized that general words should be construed ejusdem generis only if they follow specific words forming a distinct genus.
- Siddeshwari Cotton Mills (P.) Ltd. v. Union of India: The court elaborated that the general words should be limited to the same class as the specific words if a distinct category can be identified.
- Mangalore Electric Supply Co. Ltd. v. Commissioner of Income-tax: The Supreme Court noted that the ejusdem generis rule should not be pushed too far and is merely a presumption.
- Sukhu Ram Tamrakar v. State of Madhya Pradesh: The Full Bench observed that the rule should be applied with caution and only if a distinct category is present.
- Rao and Company v. State of Karnataka: The court held that the rule does not apply if the specific words do not form a distinct category.

Court's Analysis:
The court concluded that the rule of ejusdem generis must be applied with caution and should not be pushed too far. It was observed that sub-entry (i) "sheets" could not be clubbed with sub-entries (ii), (iii), and (iv) to form a single category. Therefore, the sub-entries do not form a distinct category, and the rule of ejusdem generis does not apply to entry 40.

Issue 2: Classification of "Thermofoam"
The second issue is whether "Thermofoam" falls under entry 40(v) of the First Schedule to the Act and is thus subject to a single point rate of tax.

Tribunal's Views:
- 1981-82 Assessment Year: The Tribunal initially held that "Thermofoam" falls under entry 40(v) and is subject to a single point rate of tax, arguing that the term "synthetic foam" is broad and not confined to a specific class.
- 1979-80 Assessment Year: A later Tribunal held the opposite view, stating that "Thermofoam" does not fall under entry 40(v) as it is not used for rest and comfort of the human body, thus should be taxed at a multi-point rate.

Court's Analysis:
The court examined the product "Thermofoam" and its uses as described in the pamphlet issued by the assessee. It was concluded that "Thermofoam" is a synthetic foam and falls under the general term "other synthetic foam" in entry 40(v). Consequently, the product is subject to a single point rate of tax.

Conclusion:
The court held that the rule of ejusdem generis does not apply to entry 40 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. Consequently, "Thermofoam" falls under entry 40(v) and is exigible to a single point rate of tax. The order of the Tribunal for the assessment year 1979-80 was set aside, and the appeal for the assessment year 1981-82 was dismissed.

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