1995 (9) TMI 329 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Classification of "Honeyrex" under the Andhra Pradesh General Sales Tax Act, 1957.
2. Interpretation of entries 44 and 44-A of the First Schedule to the Act.
3. Applicability of the doctrine of noscitur a sociis.
4. Binding nature of the Sales Tax Appellate Tribunal's decisions on the Commissioner of Commercial Taxes.

Detailed Analysis:

1. Classification of "Honeyrex" under the Andhra Pradesh General Sales Tax Act, 1957
The core issue was whether "Honeyrex" should be classified as general goods taxable under the Act or under entry 44-A of the First Schedule, which would make it taxable only on first sales. The Commissioner of Commercial Taxes held that "Honeyrex" should be treated as general goods, contrary to the Appellate Deputy Commissioner's decision, which classified it under entry 44-A.

2. Interpretation of entries 44 and 44-A of the First Schedule to the Act
Entries 44 and 44-A were introduced by Act 49 of 1976. Entry 44 covers "Milk foods and powders such as Horlicks, Viva and the like condensed milk, baby milk and baby foods," while entry 44-A covers "All other foodstuffs or products, whether used as such or after mixing them with any other foodstuff or beverage when sold in sealed or tinned containers such as Bournvita, Ovaltine, Ragimalt, Boost and the like." The Appellate Deputy Commissioner interpreted "all other foodstuffs" in entry 44-A to mean foodstuffs other than those mentioned in entry 44, fitting "Honeyrex" within this category. However, the Commissioner disagreed, stating that "Honeyrex" does not fit the description of foodstuffs akin to Bournvita, Ovaltine, Ragimalt, Boost, etc., as these are beverages with food value, whereas "Honeyrex" is consumed in limited doses for specific purposes.

3. Applicability of the doctrine of noscitur a sociis
The court applied the doctrine of noscitur a sociis, which means that a word is known by the company it keeps. The court held that although "foodstuffs" and "food products" have a wide connotation, in the context of entry 44-A, they must be interpreted narrowly. The words "such as Bournvita, Ovaltine, Ragimalt, Boost and the like" indicate that only foodstuffs or products similar to these beverages are intended to be covered under entry 44-A. The court cited several precedents, including State of Bombay v. Virkumar Gulabchand Shah and Welcome Hotel v. State of Andhra Pradesh, to support this view.

4. Binding nature of the Sales Tax Appellate Tribunal's decisions on the Commissioner of Commercial Taxes
The appellant argued that the Commissioner was bound by the Tribunal's decision in Sri Lakshmi Traders, Kakinada v. State of Andhra Pradesh, which classified "Honeyrex" under entry 44-A. However, the Commissioner held that he was not subordinate to the Tribunal and therefore not bound by its decision. The court did not address this contention in detail as the appellant did not press it further.

Conclusion:
The court upheld the Commissioner's order, concluding that "Honeyrex" does not fall under entry 44-A of the First Schedule to the Act. The special appeal was dismissed, and the decision of the Tribunal in Sri Lakshmi Traders, Kakinada v. State of Andhra Pradesh was overruled. The court emphasized that "Honeyrex" is not akin to the foodstuffs or products mentioned in entry 44-A and therefore should be treated as general goods taxable under the Act.