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CASE NO.:

Appeal (civil) 1078-1086 of 1999

PETITIONER:

BRINDAVAN BANGLE STORES AND ORS.

RESPONDENT:

ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AND ANR.

DATE OF JUDGMENT: 07/01/2000

BENCH:

S.P. KURDUKAR & V.N. KHARE & SYED SHAH MOHAMMED QUADRI

JUDGMENT:

JUDGMENT

2000 (1) SCR 97

The Judgment of the Court was delivered by

S.P. KURDUKAR, J. These appeals by Special Leave are filed by the dealers

in glass and plastic bangles. The question which has been raised in these

appeals is as regards the validity of imposition of entry tax on glass and

plastic bangles under the Karnataka Tax on Entry of Goods Act, 1979 (for

short 'the Act').

2. The State Government on 30th April, 1992 notified various com-modities

for purpose of levy of entry tax. Entry 30 and Entry 54 of the notification

are relevant for the purposes of disposal of these appeals.

Entry 30 : Glass sheets and all articles made of glass.

Entry 54 : Plastic sheets, granules and articles made from all kinds of and

all forms of plastic including articles made of polypropylene, polystyrene

and the like materials.

It appears that one of the bangle merchants sought clarification from the

Commissioner of Commercial Taxes as to whether "glass" bangles and plastic

bangles" would be covered by Entry 30 and Entry 54 of the Notifica-tion

dated 30th April, 1992 and is subject to entry tax at 2%, The Commis-sioner

of Commercial Taxes on 21st My, 1992 in exercise of his powers under

Section 12(7) of the Entry Tax Act clarified that glass bangles'and plastic

bangles would be covered by Entry 30 and Entry 54 of the Notifica-tion

dated 30th April, 1992 and is subject to entry tax at 2%. Consequent upon

the said clarification, the Assistant Commissioner of Commercial Tax made

an assessment order for 1992*93 and demanded entry tax on bangles. The

appellants aggrieved by the assessment orders preferred various writ

petitions before the High Court of Karnataka. The Learned Single Judge

after hearing the parties, by his common judgment and order dated 15th

March, 1995, allowed the writ petitions and quashed the assessment order

made against the appellants. The Assistant Commissioner of Commercial Taxes

and the Commissioner of Commercial Taxes, the respondents herein aggrieved

by the order passed by the learned Single Judge preferred writ appeals

before the High Court. The Division Bench of the Karnataka High Court after

hearing the parties vide its common judgment and order dated 22nd June,

1998 allowed these appeals and held that the glass bangles and plastic

bangles are covered by Entry 30 and Entry 54 respectively of the

Notification dated 30th April, 1992 and are subject to entry tax at 2%.

Consequently, the learned Division Bench set aside the judgment and order

passed by the learned Single Judge. It is against this common judgment and

order passed by the Division Bench of the Karnataka High Court, the

appellants have preferred these appeals.

3. Chapter 2 of the said Act deals with the levy of tax. Section 3(1) of

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the Act provides that there shall be levied and collected tax on entry of

any goods specified in the first schedule into a local area for

consumption, use or sale therein at such rates which may be prescribed by

the State Government by issuance of a Notification. Different dates could

be specified in respect of different goods or different classes of goods

for different local areas. In exercise of this power, the Government of

Kar-nataka issued Notification No. FD 69 CET 92(i) dated 30th April, 1992.

A list was accordingly appended to the Notification containing Entry 30 and

Entry 54 which we have already reproduced herein above. It is common ground

that these entries correspond to Entry 39 and Entry 70 to the first

schedule of the said Act, but for convenience sake, we shall refer to them

as Entry 30 and Entry 54 in this judgment.

4. Mr. S.K. Dholakia, learned senior Advocate appearing in support of

these appeals urged that the interpretation given by the learned Single

Judge as regards these two entries by following the rule of construction

"noscuntur a sociis" is more appropriate and systemic because the words

used by the legislatures were neither clear nor free from ambiguity. He

then contended that the identity of bangles is distinct than the articles

of glass. When an article acquires commercial sense and identity, then, it

by necessary implication stands excluded from the general description of

the material from which it is made.

5. Countering this submission, learned counsel for the respondents urged

that Entry 30 and Entry 54 are very clear and unambiguous. The words of

these two entries being clear and unambiguous, the question of

interpretation of the same in any other meaning except giving a true

meaning as they stand, does not arise. These two entries are in two parts.

The first part of Entry 30 deals with the glass sheets which is nothing but

raw materials required for manufacture of articles made of glass whereas

the second part of the said entry relates to finished product made of glass

sheets as also articles made of glass. This interpretation can be extended

to Entry 54 also as it is identically worded. The words "and" occurring in

Entry 30 (and Entry 54) assume great importance and it reflects the

intention of the legislature that it intended to levy tax both on glass

sheets as also on finished products of glass/articles made of glass, which

is found in the second part of Entry 30. The same analogy would extend to

Entry 54. It was, therefore, contended on behalf of the respondents that

the learned Single Judge was wrong in applying the rule of construction

noscuntur a sociis. The Division Bench has rightly construed both the

entries and, therefore, impugned judgment calls for no interference.

6, Coming to the first submission, it is true that the identity of bangles

is distinct than the articles of the glass yet they are identified are

called by the name of material used for making such bangles for example

glass bangles, plastic bangles etc. Even in common parlance and in the

market such bangles are known as glass bangles and therefore the expression

articles of glass in Entry 30 would include the bangles i.e. articles made

of glass. The bare reading of Entry 30 would make it clear that the

articles mentioned therein are subject to payment of entry tax. The words

"and" used in Entry 30 would unmistakably indicate that the glass sheets

(raw materials) as well as all articles made of glass would be subject to

payment of entry tax. The same analogy has to be extended to Entry 54.

7. The second contention raised on behalf of appellants relating to

clarity and ambiguity of Entry 30 and Entry 54 and application of such

construction of "noscuntur a sociis" in our opinion the learned Division

Bench of the Karnataka High Court has rightly held that the said rule of

construction has no application to the facts and circumstances of the case.

This Court in The State of Bombay and Others v. The Hospital Mazdoor Sabha

and Others, AIR (1960) SC 610 has considered in detail the rule of

construction noscuntur a sociis and in paragraph 9, it is observed thus :

"We are not impressed by this argument, it must be borne in mind that

noscuntur a sociis is merely a rule of construction and it cannot prevail

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in cases where it it clear that the wider words have been deliberately used

in order to make the scope of the defined word correspondingly wider. It is

only where the intention of the legislature in associating wider words with

words of narrower significance is doubtful, or otherwise not clear that the

present rule of construction can be usefully applied. It can also be

applied where the meaning of the words of wider import is doubtful; but,

where the object of the legislature in using wider words is clear and free

from ambiguity, the rule of construction in question cannot be pressed into

service,"

8. 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 and 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. The impugned judgment has very

succinctly dealt with the contentions raised on behalf of both the parties

and also dealt with the various reported decisions of this Court and other

High Courts in great length. We arc in complete agreement with the view

taken by the Division Bench.

9. Coming to the next submission of Mr. Dholakia that when an article

acquires commercial sense and identity, then it by necessary im-plication

stands excluded from the general description of the material from which it

is made. In support of this submission, learned counsel relied upon the

decision in Atul Glass Industries (Pvt.) Ltd. v. Collector of Central

Excise, [1986] 3 SCC 480, M/s. Geep Flashlight Industries Ltd., 28, South

Road, Allahabad v. Union of India & Ors., (1984) 2 SCALE 380 and Pardeep

Aggarbatti, Ludhiana v. State of Punjab and Others, [1997] 8 SCC 511, We

have gone through these judgments and, in our opinion, the same are

distinguishable on facts. The words used in the respective entries are

quite distinct and, therefore, these decisions would not apply to the facts

of the present case. In Atul Glass Industries (Pvt.) Ltd. Tariff Item 23-

A(4) or 68 of the First Schedule of Central Excises and Salt Act, 1944 fell

for consideration, 23-A(4) relates to "Glass and Glassware" and whether

glass mirrors, Glass screens fitted in motor vehicles as windscreens, rear

screens and window screens fall in this item. Court held it falls under

residuary Tariff Item 68. Glassware which would in common parlance meant

tableware like glass tumblers, glass dishes, plates etc, and would not

include glass mirrors, glass screens fitted in motor vehicles as

windscreens, rear screens and window screens. However, the words used in

Entry 30 "all article 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%.

10. In our considered view, the impugned judgment does not suffer from any

defect and or illegality and, therefore, the same has to be confirmed. We

accordingly do so.

11. In the result, the appeals to .stand dismissed with costs.