2000 (1) TMI 176 - SC - Central Excise

Validity of imposition of entry tax on glass and plastic bangles under the Karnataka Tax on Entry of Goods Act, 1979 Held that - As stated earlier on reading Entry 30 and Entry 54, we have no manner of doubt that there is neither any ambiguity nor they lack any clarity. The legislature intended to levy and collect entry tax on the articles mentioned in both these entries. The words used therein are of wider import and clearly indicate that all articles made of glass or made from all kinds of all forms of plastic including articles made of polypropylene, polystyrene and like materials are subjected to payment of entry tax. It cannot be disputed that the articles in question, namely, bangles are made of glass and or made of plastic etc. Thus the words used in Entry 30 all articles made of glass and in Entry 54 articles made from all kinds of and all forms of plastic including articles made of polypropylene, polystyrene and like materials would make it quite clear that the entry tax is leviable on such articles. Glass bangles and plastic bangles would be clearly covered by Entry 30 and Entry 54 respectively of the said Notification and are subject to entry tax at 2%. Against assessee.

Summary

Issues:
Validity of imposition of entry tax on glass and plastic bangles under the Karnataka Tax on Entry of Goods Act, 1979.

Analysis:
The case involved a dispute regarding the imposition of entry tax on glass and plastic bangles under the Karnataka Tax on Entry of Goods Act, 1979. The State Government had notified various commodities for the levy of entry tax, including glass and plastic articles. A clarification was sought from the Commissioner of Commercial Taxes regarding the coverage of glass and plastic bangles under the notification. The Commissioner clarified that glass and plastic bangles would be subject to entry tax. Subsequently, assessment orders were made against the dealers, leading to writ petitions before the High Court. The Single Judge quashed the assessment orders, but the Division Bench overturned this decision, holding that glass and plastic bangles are indeed subject to entry tax.

The interpretation of Entry 30 and Entry 54 of the Act was a crucial point of contention. Entry 30 covered glass sheets and articles made of glass, while Entry 54 included plastic sheets, granules, and articles made from various forms of plastic. The appellants argued that the identity of bangles is distinct from the raw materials used to make them, thus excluding them from the entry tax. However, the respondents contended that the entries were clear and unambiguous, indicating that both raw materials and finished products were subject to tax. The Division Bench agreed with the respondents, emphasizing the legislative intent behind the entries.

The application of the rule of construction "noscitur a sociis" was also debated. The appellants relied on previous judgments to support their argument that when an article acquires commercial sense and identity, it is excluded from the general description of the material used. However, the court distinguished those cases, noting that the wording of Entry 30 and Entry 54 clearly encompassed articles made of glass and plastic. The court found no ambiguity in the entries and upheld the Division Bench's decision, confirming that glass and plastic bangles were liable for entry tax at 2%.

In conclusion, the Supreme Court affirmed the Division Bench's judgment, stating that it did not suffer from any defect or illegality. The appeals were dismissed with costs, thereby upholding the imposition of entry tax on glass and plastic bangles under the Karnataka Tax on Entry of Goods Act, 1979.