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TMI Blog2000 (7) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 1976-77 under section 7 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") on rejection of the returns. Subsequently, the assessing officer finding that the assessee sold "Nannari syrup" under a trade name "Ondipuli" registered under the Trade and Merchandise Marks Act, 1958 made a revision of assessment by order dated January 11, 1978 assessing the sale of "Nannari syrup" to tax at 8 per cent single point under entry 103 of the First Schedule to the Act. The assessee filed a statutory appeal to the Appellate Assistant Commissioner and the said authority after taking into consideration the various rival contentions put forth before it, held that the sales turnover of "Nannari syrup" is liable to tax at the rate of 4 per cent multi-point under section 3(2) of the Tamil Nadu General Sales Tax Act, 1959 and the said order became the subject-matter of suo motu revision by the Joint Commissioner who ultimately held that "Nannari syrup" sold under the brand name falls under entry 91 of the First Schedule and consequently liable to tax at 5 per cent. Thereafter, the assessee preferred the above appeal and the division Bench referred to a large ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as "a cold, usually sweet drink, which does not contain alcohol". Mr. C. Natarajan, learned Senior Counsel, invited our attention to the decision of the Supreme Court in South Bihar Sugar Mills Ltd. v. Union of India AIR 1968 SC 922 in which it has been said that, ". . . As the Act does not define goods, the Legislature must be taken to have used that word in its ordinary, dictionary meaning. The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market." Mr. C. Natarajan, learned Senior Counsel, argued that entry 91 has to be understood by applying the doctrine of "noscitur a sociis" and put reliance on the theory of common parlance. He contended that the entry should be read as "ejusdem generis". The learned counsel sought to substantiate the rule "noscitur a sociis" by arguing that the word "soft drinks" has to be restricted to only drinks that are aerated or carbonated as they take their colour from the preceding word or the only associated word, viz., aerated waters. He further contends that "Nannari syrup" cannot at all be classified as a "soft drink" as it is not either aer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try, reference to a dictionary is somewhat delusive guide, as it gives all the different shades of meaning. It is also settled that where no definition is provided in the statute itself, as in this case, for ascertaining the correct meaning of a fiscal entry, reference to a dictionary is not always safe. The correct guide, it appears in such a case, is the context and the trade meaning. It is the principle of law that the words used in a law imposing a tax should be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force. If an expression is capable of wider meaning as well as a narrower meaning, the question whether the wider or the narrower meaning should be given depends on the context and the background of the case. As the Act does not define goods, the Legislature must be taken to have used the word in its ordinary, dictionary meaning. The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market. From the definitions contained in several dictionaries, mentioned above by the learned counsel we find that the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding that words of everyday use occurring in a taxing statute must be construed in "popular sense", concluded thus: ". . . It need not necessarily be material suitable for making garments because there can be 'cloth' suitable only for industrial purpose; but nevertheless it must possess the basic feature of pliability. Hard and thick material which cannot be wrapped or wound around cannot be regarded as 'cloth'. We are therefore, of the opinion that the Commissioner was perfectly right in his view that only those varieties of felt manufactured by the appellants which satisfy the test of pliability will constitute 'cloth' so as to fall within the scope of entry 6 of the First Schedule to the Act." (Emphasis supplied by us)(1) From the ratio laid down in the said decision, we are of the opinion that the case on hand requires a similar treatment in order to ascertain the entry to which "Nannari syrup" would most appropriately fall under. It is significant to mention that while applying the test of "common parlance", dictionary meanings were not altogether discarded, but had drawn aid from them. No doubt, the dictionary meaning of the word will be a useful one, yet words of a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analogous to the less general. Applying the doctrine of "noscitur a sociis", which is a broader rule of "ejusdem generis" upon which the learned Senior Counsel would also heavily rely upon, apart from the theory of common parlance, we are of the view that the said rule of construction will be applicable to the facts of the case on hand. The learned Senior Counsel submits that the Supreme Court in G.S. Pai Co. [1980] 45 STC 58 has held that "water supply and sanitary fittings" is one single expression and the word "water supply" must receive the colour from the immediately following words "sanitary fittings" and, therefore, similar construction should be placed on the expression "aerated water and bottled soft drink". He submitted that with reference to dictionary meanings given to soft drinks, the aeration or carbonation of a drink is not an essential feature, so as to be construed as "soft drink". He further, submits that the latter part of the said entry reads "whether or not flavoured or sweetened and whether or not containing vegetable or fruit juice or fruit pulp" suggesting that soft drinks would also include vegetable juice or fruit juice which are capable of being cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of tax and make the commodity taxable at only one point with the intention of preventing escalation of prices, thereby, not causing undue burden on the ultimate buyer. As a word of caution, the extent of the interpretation, by applying the test of popular connotation, cannot take the place of supplying or adding to or deleting a particular commodity to an entry which the Legislature has chosen to deliberately avoid and not to do so. From the above narrations, we find that "Nannari syrup" is not consumed as such, but yet that cannot constitute a criteria for construing it as not a "soft drink". It does not make any the less a soft drink, inasmuch as, dilution by water or addition of lemon does not take away the basic feature of a soft drink, viz., that it is not harmful or intoxicating. We find the reasoning adopted by the division Bench in K.O. Angumanickam case [1994] 92 STC 166 is on the same line. The cost of the "Nannari drink" popularly known as "Sharbat" is relatively cheaper and easily affordable by the economically lower section of the people and so it is widely consumed. We have also noted that the Legislature has not treated a concentrated syrup or essence and a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e called upon to prove a fact which he does not assert and so also a negative fact. The principles underlying and governing the provisions of the Evidence Act are manifest in section 10 of the Tamil Nadu General Sales Tax Act, 1959. On a parity of reasoning, section 10 also is one such special provision enacted under the fiscal statute casting the burden on the dealer to prove that any of his transaction is not liable to tax, implying that there is always a presumption in favour of the Revenue that every transaction is liable to tax. Thus, as per section 10 it is this presumption that the dealers are called upon to lead evidence in rebuttal of the presumption. In reality, there is no gainsaying the fact that the dealers would undoubtedly possess the expertise and experience in furnishing valuable information and material evidence to substantiate the popular approach in the business community. A provision embodying such a presumption and consequently placing the burden of proof on the dealer cannot be construed as arbitrary or onerous, inasmuch as the dealer is not burdened with the duty of establishing a thing which is beyond his knowledge or beyond his wherewithal, to prove materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him does not fall under the entry as proposed by the Revenue. By way of abundant caution, it is imperative to clarify that the above view of ours does not have any bearing or application when the department makes assessment on the basis of materials unearthed or recovered or information gathered and which are exclusively within the special knowledge of the Revenue and conversely not known to the dealer. Having regard to the meanings contained in the dictionaries, as also to the popular connotation of the expression "soft drink", and further in the light of the discussion made and view expressed above, we hold that "Nannari syrup" falls within entry 91 of the First Schedule to the Act. The decision of the division Bench in K.O. Angumanickam's case reported in [1994] 92 STC 166 (Mad) has laid down the correct law and requires no reconsideration. We accordingly, hold that it holds the field. In the result, the appeal in Tax Case (A) No. 241 of 1983 is dismissed. In so far as the appeal in Tax Case (A) No. 242 of 1983 is concerned, in the light of the view expressed in the other appeal, and also in view of the introduction of entry 139 of the First Schedule to the Act with effect f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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