Madras High Court
General Marketing And Manufacturing ... vs State Of Tamil Nadu And Others on 23 August, 1990
JUDGMENT Venkataswami, J.
1. As the assessee as well as the issue raised are common in both the cases, they are dealt with by this common order.
2. The petitioners are dealers in Ambassador cars, trucks, chassis, spare parts, loaders, shovels and scrapers. For the assessment year 1977-78, relating to T.C. No. 989 of 1980, they reported a total and taxable turnovers of Rs. 34,31,428.24 and Rs. 8,54,939.20 respectively. The Additional Deputy Commercial Tax Officer, Alandur Division, after perusing the records and after giving opportunity to the petitioners, by his order dated January 11, 1979, determined the total and taxable turnovers at Rs. 36,46,869 and Rs. 9,00,436, respectively. The petitioners were aggrieved by the order of the assessing officer in respect of a turnover of Rs. 4,88,430 representing sales of spares of excavators, alternatively known as shovels (hereinafter called "the goods'), which were taxed bringing them under serial No. 55-A of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called "the Act"). The contention of the petitioners was that those goods will fall only under serial No. 81 of the First Schedule to the Act, and as such, exigible to tax at 5 per cent or 6 per cent, as the case may be, and not at 9 per cent under serial No. 55-A of the First Schedule. On appeal, the Assistant Commissioner confirmed the view taken by the assessing officer. The Tribunal, on further second appeal, also confirmed the view taken by the Revenue. Aggrieved by the order of the Tribunal, the present tax case has been filed.
3. The writ petition challenges the preassessment notice issued by the assessing officer for the assessment year 1978-79 treating the goods as coming under serial No. 55-A of the First Schedule.
4. Mr. C. Natarajan, learned counsel for the petitioner, in his elaborate argument, by producing necessary literature, submitted that excavator/shovels will not fall under serial No. 55-A of the First Schedule. According to the learned counsel, the excavator/shovels have nothing in common with the items enumerated in serial No. 55-A. Excavator/shovel, according to the learned counsel, is a heavy type machinery used in mines and dam sites provided with the crawler assembly to move the machinery to the site and after it is moved to the site, it is only the upper rotating assembly of the machinery that goes into action by putting the bucket into the material and scooping or digging them out and the scooped material is lifted and by rotating the upper deck machinery it is spilled over a particular place and after emptying the bucket, the machinery swings back to the material to repeat the cycle and that the principal characteristic of the shovel is that it is a stationary equipment and it does not move with the load on its wheels from place to place and the crawler attached to the shovel is only to move the shovel from work-site to work-site and that it cannot be classified as an item failing under serial No. 55-A of the First Schedule. It was further contended by the learned counsel that serial No. 55-A refers to the type of earth moving machinery, of which mechanically propelled vehicle forms an integral part and the various earth moving machinery referred to under that serial number are machinery which move and transfer in the course of their performance which is not the case in respect of excavators which remain stationary and the crawler mechanism attached is only for the movement of the excavators from site to site for stationary operations. Mr. Natarajan also contended that the principle of ejzisdem generis cannot he invoked to rope in excavator/shovel under serial No. 55-A of the First Schedule. In support of this, he placed reliance on a judgment of the. Supreme Court in Amar Chandra Chakraborty v. Collector of Excise, Government of Tripura .
5. Mr. R. Karuppan, learned Additional Government Pleader (Taxes), contending contra, submitted that the reasoning and the construction placed by the Tribunal to hold that excavator/shovel will fall under serial No. 55-A of the First Schedule, are sustainable.
6. We have carefully considered the rival submissions and went through the pamphlets produced by Mr. Natarajan in respect of excavator/shovel, loader, electric fork-lift, truck, transloader, scraper, rear dump. Before going further into the matter, it will be useful and necessary to set out serial numbers 55-A and 81 of the First Schedule to the Act. They read as follows :
------------------------------------------------------------------------
S. Description of the goods Point of Rate of Effective
No. levy tax from
(per cent)
1 2 3 4 5
------------------------------------------------------------------------
55-A ORIGINAL ENTRY
Rear dumps, loaders, scrapers At the 9 21-2-1973
forklift trucks and other point sale
similar varieties first sale
of machinery of which a in the state
mechanically
propelled vehicle
forms an integral part,
tyres (including
pneumatic tyres) and tubes
ordinarily used for the
above (whether or not such
tyres and tubes are also
used for other vehicles)
and articles (excluding
batteries) adapted for use
generally as parts and
accessories of the above.
ENTRY FROM 13-9-1977
Rear dumps, loaders, scrapers,
platform trucks, forklift
trucks and other similar
varieties of machinery of
which a mechanically propelled
vehicle forms an integral part,
tyres (including pneumatic
tyres) and tubes, ordinarily
used for the above (whether
or not such tyres and
tubes are also used for
other vehicles) and articles
(excluding batteries) adapted
for use generally as parts
and accessories of the above.
81. ORIGINAL ENTRY
All machinery worked by (i) elec- At the 5 4-3-1974
tricity, (ii) diesel, (iii) petrol, point of 6 21-2-1978
(iv) furnace oil (v) kerosene, first sale
(vi) coal including charcoal
and in the (vii) any other fuel or
power and State parts and
accessories of such machinery other
than those specifically mentioned
in this Schedule.
ENTRY FROM 13-9-1977
All machinery (other than those
specifically mentioned
in this Schedule) worked
by (i) electricity, (ii) diesel or
petrol, (iii) furnace oil,
(iv) kerosene, (v) coal, including
charcoal or (vi) any other
form of fuel or power, and parts and
accessories of such machinery
and tools used with such
machinery.
------------------------------------------------------------------------
7. Let us first consider whether the principle of ejusdem generis will apply to the facts of this case. Under what circumstances, the principle of ejusdem generis can he applied to a case, has been explained by the Supreme Court in the decision (Amar Chandra Chakraborty v. Collector of Excise, Government of Tripura). The Supreme Court has observed in that case as follows :
"The ejusdem generis rule strives to reconcile the incompatibility between specific and general words. This doctrine applies when (i) the statute contains an enumeration of specific words; (ii) the subjects of the enumeration constitute a class or category; (iii) that class or category is not exhausted by the enumeration; (iv) the general term follows the enumeration and (v) there is no indication of a different legislative intent ..."
8. Bearing this principle in mind, now let us look into serial No. 55-A of the First Schedule. After enumerating various items, the general term which follows the enumeration, reads as follows :
"Other similar varieties of machinery of which a mechanically propelled vehicle forms an integral part ..."
9. It is not in dispute that mechanically propelled vehicle is an integral part of an excavator/shovel. However, the contention is that the excavator/shovel is provided with a crawler assembly fitted with an adjustable dragline for movement. On the other hand, in the cases of enumerated items, they are all fitted with pneumatic tyres for movement. Therefore, it will not fall in the family of enumerated items, is the contention of the learned counsel. We find it difficult to accept this contention. What is important is, not the tyres, but the fact of mechanically propelled vehicle forming an integral part of the machinery. In our view, inasmuch as a mechanically propelled vehicle forms an integral part of an excavator/shovel, it will fall under similar variety of machinery mentioned in serial No. 55-A of the First Schedule. Therefore, we hold that the principle of ejusdem genetis applies to the facts of this case, and on so applying, we further hold that the excavator/shovel will fall under serial No. 55-A.
10. Further, from a perusal of the literature supplied by the learned counsel for the petitioner, it is seen that the functions of loaders are to scoop earth, sand, gravel, etc., and unload them. The same functions are carried out by excavator/shovels, and the only difference here is that in the case of excavator/shovels, the machinery is kept in a stationary position, and in the other case, the machinery carries the excavated material. Even on this basis, there is no difficulty to hold that excavator/shovel will fall under serial No. 55-A of the First Schedule. Accordingly, we are of the view that the Tribunal was right in holding "we are unable to agree with the appellants that the dissimilarity as emphasised by the learned counsel in the case of excavators would take it outside the purview of the entry, since the excavator is provided only with a crawler mechanism and there is no movement with the goods. So far as we could see the functions of loader and the excavator are almost similar. We find that the term 'machinery' occurring in the entry indicates a composite unit of which the mechanically propelled vehicle is an integral part. In view of all these factors, the excavator has to go only within the purview of entry 55-A of the First Schedule".
11. In the result, the tax case fails and it is dismissed. Consequently, the writ petition also fails and is dismissed. There will be no order as to costs in the tax case as well as the writ petition.
12. Petitions dismissed