1992 (4) TMI 225 - HC - VAT and Sales Tax

Summary

Issues involved:
The issues involved in the judgment include the classification of mosquito mats for sales tax purposes under the Tamil Nadu General Sales Tax Act, 1959 and the applicability of single-point versus multi-point taxation on the sales of these mats.

Classification of Mosquito Mats:
The petitioners claimed that the mosquito insecticide mats fall under item No. 66 of the First Schedule to the Act and should be taxable at a single point, i.e., at the point of first sale in the State. They argued that since the single point tax had already been collected from purchasers or dealers, there should not be any subsequent levy of tax treating the commodity as liable for multi-point tax. The respondents, however, contended that the mats were not solely insecticides and therefore should be taxed at a multi-point rate. They argued that the mats were not 100% insecticides and contained ingredients other than insecticides, making them a general item liable for multi-point tax.

Legal Interpretation and Decision:
The court examined the relevant entry in the First Schedule to the Act, which referred to insecticides generally without specifying any particular percentage or combination. The court agreed with the petitioners' argument that the mats fell within the meaning of entry 66 of the First Schedule, which encompassed insecticides broadly. The court rejected the respondents' contention that the mats should be taxed at a multi-point rate, emphasizing that the entry did not require a specific percentage or combination of insecticides. The court also dismissed the application of the principle of "ejusdem generis" in this case. Consequently, the court declared that the petitioners' mosquito mats under the brand name "Good Knight" fell under entry 66 of the First Schedule to the Act, entitling them to single-point taxation.

Final Decision:
The court granted the writ of mandamus sought by the petitioners, directing the respondents to forbear from levying or recovering sales tax on the sales of the mosquito mats other than under serial No. 66 of the First Schedule to the Act. The court ordered that the petitioners' product should be classified under entry 66 for taxation purposes. Additionally, in a related writ petition by a dealer of the same product, the court granted a declaration that the product, having already suffered tax at a single point, should not be subjected to further taxation under the Act. The court concluded both writ petitions accordingly, without imposing any costs on the parties involved.