Madras High Court
Transelektra Domestic Products Pvt. ... vs Commercial Tax Officer, Porur ... on 9 April, 1992
Author: Doraiswamy Raju
Bench: Doraiswamy Raju
JUDGMENT
W.P. No. 11731 of 1989 :
1. The above writ petition has been filed for a writ of mandamus, directing the respondents herein including the State of Tamil Nadu, its officers and agents to forbear from levying or recovering sales tax from the petitioners on the sales of allethrin mosquito mats marketed by the petitioners under the brand name "Good Knight", other than under serial No. 66 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.
2. The petitioners, in the affidavit filed in support of the writ petition, claim that the sales of mosquito insecticide mats fall under item No. 66 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as "the Act" and are taxable at single point, viz., at the point of first sale in the State. The petitioners further claim that they are the manufacturers and dealers in "Good Knight" brand mosquito insecticide mats. The petitioners have come before this Court with a grievance, giving a list of stockists and dealers of the petitioners who have been assessed to multi-point tax on the very goods which have already suffered levy under the single point. It is claimed by the petitioners that when they sold the goods, the single point tax has already been collected from the purchasers or dealers and has been passed over to the State and that inasmuch as the product in question squarely falls under item 66 of the First Schedule to the Act there cannot be any subsequent levy of the tax treating the commodity as one liable for multi-point tax under the Act. The petitioners also contend that the other departments of the Government have treated the product to be an insecticide and consequently the claim of the petitioners that it falls under item 66 of the First Schedule to the Act deserves to be sustained.
3. The respondents have filed a counter-affidavit. It is seen that the entry of item 66 in its original form was introduced by Act 11 of 1967 with effect from July 1, 1967 and in the present form with effect from September 13, 1977. The relevant entries during the relevant point of time are stated to be as hereunder :
S. No. Description of goods Point of levy Rate of tax 66 Pesticides and At the point of first 3.5% insecticides sale in the State This entry was substituted and the present entry was introduced with effect from September 13, 1977. The present entry reads as follows :
66. Fungicides, herbicides, At the point of first 3 1/2% insecticides, pesticides, sale in the State.
rodenticides and combinations thereof.
It is also stated, in traversing the claims of the petitioners, that the communication issued by the Special Commissioner and Commissioner of Commercial Taxes on August 18, 1987, that the mosquito mats are single point goods falling under item 66 of the First Schedule to the Act has subsequently been cancelled and the reference to the subsequent communications treating the mosquito mats as goods taxable at multi-point at the rate of 5 per cent is also furnished by the respondents. It is also contended for the respondents that the product marketed by the petitioners are not 100 per cent of fungicides, herbicides, insecticides, pesticides and the mosquito mat in question has been manufactured, according to the respondents, with ingredients of d-Allethrin 4 per cent and others 96 per cent and consequently the meagre quantity of 4 per cent allethrin could not make the product an insecticide. Consequently, it is contended that the product is a general item liable to tax at multi-point rate. The fact that the retail dealers do not possess any insecticide licence to sell mosquito mats is referred to as an indication that the product is not really an insecticide. That apart, it is stated that the mosquito mats in question are giving a very pleasant smell and used for the domestic purposes to repel the mosquitos and that the product is harmless either to human being or to domestic pets. Reliance is also placed upon the principle of "ejusdem generis" and the decisions in Deputy Commissioner of Commercial Taxes v. Ambika Stores [1963] 14 STC 688 (Mad.) and Deputy Commissioner of Agricultural Income-tax and Sales Tax v. P. Jos Zachariah [1965] 16 STC 799 (Ker) are relied upon in support of the plea for applicability of the said principle. The respondents finally contend that the product in question is multi-point goods and the subsequent circular taking such a view cannot be said to be arbitrary and there cannot be any estoppel against the taxation law. The respondents, therefore, pleaded that the writ petition may be dismissed.
4. Mr. N. Venkataraman, learned counsel appearing for the petitioners in W.P. No. 11731 of 1989 as well as Mr. T. Karuppiah, learned counsel appearing for the petitioner in W.P. No. 13093 of 1989 contended that the product in question falls only under item 66 of the First Schedule to the Act. The West Bengal Taxation Tribunal in Transelektra Domestic Products Limited v. Inspector of Commercial Taxes (Case No. RN-1491 of 1991 dated March 10, 1992 [Reported in [1992] 86 STC 497 (WBTT)]) wherein the first petitioner in W.P. No. 11731 of 1989 itself figured as applicant had an occasion to consider the very issue and the nature of the product. After a careful analysis and consideration, the Tribunal held that the product of the company is undoubtedly an insecticide for the purpose of taxation under the Bengal Finance (Sales Tax) Act, 1941. The Tribunal, as could be seen from the judgment, has not only gone into the composition of the product, but also laid emphasis on the aspect as to how the trade circles also view the product.
5. On going through the decision of the Tribunal, I am in entire agreement with the line of reasoning adopted therein. Even that apart, the entry No. 66 of the First Schedule to the Act while describing the various commodities as falling within it refers to insecticides generally and not with or of any particular percentage of combination or composition. As a matter of fact, the concluding portion of the entry "and combinations thereof" without prescribing any particular percentage is an indicator that what was envisaged therein is that the product may be an insecticide simpliciter or a combination of an insecticide to bring it within the meaning of the entry and it need not necessarily be of any particular percentage of combination of any one or more of the category of goods referred to in the entry. The stand taken to the contra for the Revenue is wholly misconceived. The other aspects regarding the right of the department to revise the classification administratively by the circulars and the efficacy of the same need not be gone into by me in view of the conclusion of mine that the product, for the reasons stated already, falls squarely within the meaning of entry 66 of the First Schedule to the Act. The principle of "ejusdem generis" therefore, has no applications to the case on hand. Consequently I see no merit in the stand taken by the respondents and there shall be a declaration, instead of mandamus as prayed for, that the product of the petitioners, viz., mosquito mats under the brand name "Good Knight" falls under entry 66 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. The writ petition shall stand ordered accordingly. No costs.
W.P. No. 13093 of 1989 :
In the light of the orders pronounced by me in the other writ petition, the petitioner in this writ petition who is only a dealer of the product manufactured by the petitioners in the other writ petition is entitled to the relief of declaration that on being shown that the product dealt with by him has already suffered tax at the single point shall not be once again subjected to any further taxation under the Tamil Nadu General Sales Tax Act, 1959. The writ petition shall stand ordered in the above terms. No costs.
6. Ordered accordingly.